journal review effect of consumer relationship proneness on perceived loyalty program attributes and...

8/9/2019 Journal Review Effect of consumer relationship proneness on perceived loyalty program attributes and resistance to change, Young Kim 2012

1/22

Paper ReviewInternational Journal of Retail & Distribution

Management

Effect of consumer relationship

proneness on perceived loyalty program

attributes and resistance to change

Hye-Young Kim Ju-Young M. Kang Kim K.P.

Johnson

MARKETI! RE"EAR#$ A%'T

#"'MER %E$A(I'R AT RETAI) ID'"TR*

%* +

Gunadi Sindoro

Magister Management

Trisakti University


2/22

Research Background

Consumer Retailer

Relationshi


3/22

Research Background

Relationshi

! Higher level of trust andcommitment

! Allocate higher customer share! Show greater adherence to

marketing requests and policiesas compared to those who arenot


4/22

Research Problem

! Whether customer loyalty actually results fromparticipation in loyalty programs (Wright andSparks, !!!" and others have found #oth weakties #etween loyalty programs and customerloyalty ($edrola and %emmo, &''" and otherpredictors of loyalty (eg merchandise quality,interaction with associates"

! $R) to o#tain their loyalty (*avas andBa#akus, &''!"


5/22

Literature Review

CONSUMER RELATIONSHIP PRONENESS CRP!!$onsumer relationship proneness ($R)" is one traita+ecting the relationship marketing outcomes thatretailers strive to achieve (eg e Wulf et al, &''-

.dekerken/Schroder et al, &''0- )arish andHolloway, &''"

!emoulin and 1idda (&''!", developing theirconceptual framework on the #asis of the di+usionof innovations theory (Rogers, &''0", postulatedthat the likelihood of adoption of a new loyaltyprogram could #e e2plained #y customers3perceptions of the program attri#utes (ieadvantages, comple2ity, and risk"


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Literature Review

PERCEI"E# LO$ALT$ PRO%RAM ATTRI&UTES an' CRP(PERCEIVED COMPLEXITY)

!Relationship/prone consumers may

" )erceive lower levels of an2iety and frustration (loyaltyprogram"

" %ore easily develop commercial friendships" Reciprocate a retailer3s relational e+orts more strongly and

favora#ly than non/relationship prone consumers (egBerry, !!4- Bitner, !!4- Hennig/5hurau et al, &''&-Reynolds and Beatty, !!!"

" 6urther 7asy to grasp how a loyalty scheme works, howpoints are awarded, and how and when they will receivetangi#le #ene8ts #ecause #y de8nition, they are likely todevelop relationships through loyalty programs and thushave their e2periences to draw from (Berry et al, &''&"


7/22

Literature Review

PERCEI"E# LO$ALT$ PRO%RAM ATTRI&UTES an' CRP(PERCEIVED ADVANTAGES)

!9a:;que;/$arrasco and 6o2all (&''


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Literature Review

PERCEI"E# LO$ALT$ PRO%RAM ATTRI&UTES an' CRP(PERCEIVED RISK)

!.ne of the factors impeding loyalty program participationwas found to #e privacy concerns (=o#le and )hillips, &''>-9an oorn et al, &''?" Relationship marketing tactics

generally ask the shoppers to divulge personal informationsuch as their name, address, and often a social securitynum#er )rivacy issues can result from losing anonymitywhen a relationship with a retailer is created $onsumers withlow CRP ma* be unwillin+ to take part in loyalty programs

#ecause they do not like giving up their anonymity andprivacy #y o+ering personal information and havingcompanies monitor which items they #uy (=o#le and )hillips,&''>" @n contrast, relationship/prone consumers may #e lessreluctant to provide personal information or to question theretailer3s use of their personal data (Smith et al, &''0"


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RESISTANCE TO CHAN%E!Resistance to change was conceptuali;ed #ased on two facets($ros#y and 5aylor, !0- )ritchard et al, !!!"

)reference sta#ility- and

& Resistance to counter persuasion

!Pre.erence stabilit*, is concerned with how consistent an'(articularan individual is in his or her alle+iance to a certainlo*alt* (ro+ram $ros#y and 5aylor (!0" demonstrated that twosystems of preference sta#ility e2ist .ne is .unctional an'consists o. /selective (erce(tions0to safeguard preferencesand decrease conCict 5he other consists of a biase' (ost1

'ecision evaluative (rocessto protect original decisions!Resistance to counter (ersuasion deals with how stron+l* anin'ivi'ual resists counter1ar+umentswhich might highlight thepositive aspects of opposing selections (ick and Basu, !!>-Diesler, !?"

Literature Review


10/22

RESISTANCE TO CHAN%E an' CRP!$onsumer relationship proneness may #e related to loyaltyprogram mem#ers3 resistance to change A shopper3s overalltendency to seek relationships has an inCuence on the level ofcommitment to that relationship (Stor#acka et al, !!>" 6or

e2ample, .dekerken/SchroEder et al (&''0" demonstratedthere is a relationship #etween $R) and commitment in theconte2t of #eauty retailers @n addition, when it comes torelationship investment, a higher level of consumerrelationship proneness was found to reinforce the e+ect of

perceived relationship investment on relationship quality (eWulf et al, &''" @n a similar manner, consumer relationshipproneness was found to #e positively associated with intentionto remain in a #usiness relationship (9a:;que;/$arrasco and6o2all, &''


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PERCEI"E# LO$ALT$ PRO%RAM ATTRI&UTES an'RESISTANCE TO CHAN%E

PERCEIVED COMPLEXITY

!Research on loyalty cards suggests that customers3

perceptions a#out loyalty card attri#utes inCuencetheir decisions (emoulin and 1idda, &''!" such that

5he comple2ity of a new loyalty card has anegative e+ect on consumer3s pro#a#ility ofadoption of the card- and

&$omple2ity was also found to have a signi8cante+ect on the adoption likelihood of a new loyaltycard

Literature Review


12/22

PERCEI"E# LO$ALT$ PRO%RAM ATTRI&UTESan' RESISTANCE TO CHAN%E

PERCEIVED ADVANTAGE

!@n 9a;que;/$arrasco and 6o2all3s (&''


13/22

PERCEI"E# LO$ALT$ PRO%RAM ATTRI&UTES an' RESISTANCE TO

CHAN%E

PERCEIVED RISK

!As noted previously, privacy issues are one of the dominant risks to consumers3adoption and use of loyalty cards (emoulin and 1idda, &''!" Some customersmay #e reluctant to divulge information especially when it comes to unique,identifying information ()helps et al, &'''" Although not directly related to

loyalty programs per se, previous researchers have shown that perceivedprivacy and perceived security with regard to the handling of consumers3personal data were antecedents of relationship sta#ility (6lavia:n and FuinalG:u,&''" eenheer et al (&''?" demonstrated that privacy/related concerns were a deciding factor in dividing loyalty card mem#ers fromnonmem#ers and showed that privacy concerns negatively a+ected loyalty cardmem#ership @n addition, emoulin and 1idda (&''!" found that perceived risknegatively a+ected adoption of loyalty card programs

Literature Review


14/22


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"ariable #eclaration

! @ndependent 9aria#le" Relationship )roneness

! %ediatingI @ntervening 9aria#le" )erceived $omple2ity the degree to which the loyalty

program system is perceived as diJcult to un'erstan'and touse

" )erceived Advantage the degree to which the loyaltyprogram provides bene-tscustomers can earn and appreciate

" )erceived Risk the degree of risk associated with (rivac*invasion issuesthat may occur while participating inthe loyalty program

! ependent 9aria#le

" Resistance 5o $hange


16/22


17/22

Sam(le 3 #ata

! ata were collected using an online survey withthe assistance of a marketing research company)articipants were &!> mem#ers of apparelretailers3 loyalty programs

! )articipants were asked to indicate one apparelretailer3s loyalty program that they took part in=e2t, they completed a questionnaire makingreference to that loyalty program 5o reduce

measurement artifacts, dependent varia#les wereassessed prior to their predictors


18/22

Measurement

! The measurement items #orconsumer relationship

proneness$ere adoted

#rom %e &ul# et al. '())*+.! Measurement items #or

perceived comple,ity and

advantage$ere adoted

#rom Taylor and Todd '*,,+

and measures #or ereived

risk $ere adoted #rom

/eenheer et al. '())0+.! Measures for resistance to

changeonstrut originated

#rom Prithard et al. '*,,,+.


19/22

ata Analysis

)*1(21*


20/22

6indings

*.3RP$as #ound to have a significant e##et onereived advantage and resistane to hange.

(.Pereived advantage revealed a signi#iant

ositivee##et on resistane to hange.


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Mana+erial Im(lication

! $ustomer retention Strategy " 7mphasi;e the various advantages I

#ene8ts of the program, #y

! )rice o+s

! Special services

! )ersonali;ation

!$ustomi;ed products! 6requent shopper program

! $ommunity


22/22

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