the battle of the customers - diva-portal.org533442/fulltext01.pdf · 4$ tableof!contents!...

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The Battle of the Customers -‐ Does loyalty exist within the FMCG market?

Author(s): Emmie Thurn, Master of Science in Business And Economics David Gustafsson, Master of Science in Business And Economics

Tutor: Mosad Zineldin

Examiner:

Mosad Zineldin

Subject: Economics, marketing

Level and semester: Master thesis, spring 2012

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Thanks to:

Mosad Zineldin For valuable tutoring and examination

The Opponents For interesting comments and constructive criticism

The FMCG stores customers For your commitment to participating in our study

ICA Maxi, Coop Extra and Willys in Växjö For all the help and willingness to cooperation

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Abstract Title: The Battle of the Customers – Does loyalty

exist within the FMCG market? Authors: Emmie Thurn 880909

David Gustafsson 870926 Purpose: The purpose with this study is to examine

how relationship marketing strategies can enhance companies’ effectiveness, within the FMCG market, in the sense of more satisfied and loyal customers. The 5Qs model will be applied in order to see if there are any critical quality factors that encourage long-‐term relationship.

Methodology: This quantitative study was based upon

positivistic assumptions and carried out by a deductive research approach. The data was collected through two questionnaires, which included 200 customers and 15 representatives from three various FMCG stores.

Conclusion: In this study the authors have found that

RM, as the current theory present it, does not provide any effective strategies to create customer satisfaction and loyalty within the FMCG market. Therefore, the authors raise the question if price is the new customer loyalty program within the FMCG market? Ten quality factors are identified as critical when generating a long-‐term relationship between FMCG stores and customers. To create a successful long-‐term relationship can these quality factors be combined into a PRODSERV offer.

Keywords: Relationship marketing, quality, customer

satisfaction, customer loyalty, 5Qs model, the FMCG market.

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Table of Contents 1. Introduction .................................................................................................................... 6 1.1 Background ........................................................................................................................... 6 1.2 Problem discussion ............................................................................................................. 9 1.3 Research questions .......................................................................................................... 10 1.4 Purpose ................................................................................................................................ 10 1.5 Delimitations ..................................................................................................................... 11 1.6 Theoretical relevance ..................................................................................................... 11 1.7 Empirical relevance ......................................................................................................... 11

2. Methodology ................................................................................................................ 12 2.1 Scientific theory ................................................................................................................ 12 2.2 Research interest .............................................................................................................. 13 2.3 Research approach .......................................................................................................... 15 2.4 Research methodology ................................................................................................... 16 2.5 Data collection ................................................................................................................... 17 2.6 Sample and population ................................................................................................... 19 2.7 Pilot study ........................................................................................................................... 21 2.8 Operationalizing ............................................................................................................... 22 2.8.1 Questionnaire with the FMCG stores customers .......................................................... 22 2.8.2 Questionnaire with representatives from the FMCG stores .................................... 24

2.9 Data analysis ...................................................................................................................... 25 2.10 Scientific credibility ...................................................................................................... 27

3. Theory ............................................................................................................................ 29 3.1 Relationship marketing .................................................................................................. 29 3.1.1 Relationship mediators ........................................................................................................... 30 3.1.2 RM in a FMCG market ............................................................................................................... 32

3.2 Quality .................................................................................................................................. 33 3.2.1 Product quality ............................................................................................................................ 34 3.2.2 Service quality ............................................................................................................................. 35 3.2.3 PRODSERV .................................................................................................................................... 38 3.2.4 Quality within the FMCG market ......................................................................................... 39

3.3 Customer satisfaction ..................................................................................................... 40 3.4 Customer loyalty ............................................................................................................... 41 3.4.1 Customer loyalty programs ................................................................................................... 46

3.5 5Qs model ............................................................................................................................ 48 4. Empirical investigation ............................................................................................ 51 4.1 The FMCG market in Sweden ........................................................................................ 51 4.2 Presentation of the FMCG stores perception of the market ............................... 53 4.2.1 Important quality factors ....................................................................................................... 53 4.2.2 Relationships ............................................................................................................................... 53 4.2.3 Customer satisfaction ............................................................................................................... 54 4.2.4 Loyalty ............................................................................................................................................ 54

4.3 Presentation of the results ............................................................................................ 55 4.3.1 SPSS frequency ............................................................................................................................ 58 4.3.2 SPSS tests ....................................................................................................................................... 61

5. Analysis ......................................................................................................................... 73

6 Conclusion ..................................................................................................................... 82

Further research ............................................................................................................. 84

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Reference list ................................................................................................................... 85

Appendix 1 -‐ Questionnaire with the Customers ................................................. 92 Appendix 2 -‐ Questionnaire with the companies ................................................. 94

Appendix 3 Presentation of the sample .................................................................. 96 Appendix 4 Presentation of the other SPSS tests ............................................... 100 Loyalty tests ............................................................................................................................. 100 Satisfaction tests .................................................................................................................... 103

Appendix 5 -‐ Quality factors ...................................................................................... 108 Appendix 6 -‐ About the companies ......................................................................... 109 Coop ............................................................................................................................................ 109 ICA ............................................................................................................................................... 110 Willys ......................................................................................................................................... 112 City Gross .................................................................................................................................. 113

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1. Introduction

1.1 Background When the industrial revolution took of in the eighteenth century, with increased

technological development and mass production, the customer focus faded into

darkness (Gamble et al., 2011). Even if many scholars agree that marketing

origins from this time (Gamble et al., 2011), the focus of the customer-‐needs did

not come around until the mid-‐twentieth century (Gamble et al., 2011; Uncles et

al., 2003). With the 1980s came a new view on marketing as the companies now

competed on a more global scale with much more flexible business forms

(Gamble et al., 2011). The new environment took marketing to a much broader

concept and put more focus on customer segmentation (Gamble et al., 2011).

Exchange was now highly acknowledged as an important aspect when defining

marketing (Gamble et al., 2011). Grönroos (1989) argue that exchange and

promises are the way businesses build long-‐term customer relationships;

Grönroos (1989) defined marketing in the 1980s, as “marketing is to establish,

develop, and commercialize long-‐term customer relationships, so that the

objectives of the parties involved are met. This is done by a mutual exchange and

keeping of promises” (Grönroos, 1989, pp. 57). The relationship marketing

approach enhanced under the 1990s and also started to view marketing as a

company philosophy (Gamble et al., 2011). Webster (1992) emphasize that

relationship marketing is a competitive tool for companies, and defined

marketing as “marketing is the management function responsible for assuring

that every aspect of the organization focuses on customer relationships by

delivering superior value, recognizing that the organization’s ongoing

relationships with customers are its most important asset” (Webster, 1992, pp.

14).

In the 2000s Internet based world with e-‐commerce and innovation as the new

research fields of marketing, societal responsibility and ethical aspects became

more important features (Gamble et al., 2011). In the same time the experienced

value were seen as the driver for exchange between parties (Kotler et al., 2009).

Kotler et al. (2009) defined marketing in the twenty-‐first century as “Marketing

is a societal process by which individuals and groups obtain what they need and

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want through creating, offering, and freely exchanging products and services of

value with others” (Kotler et al., 2009, pp. 7). Gambler et al. (2011) concluded in

their research that satisfying customer wants and needs, organizational

activities, exchange and organizational objectives has been the most important

aspect when trying to define marketing over the last five decades. Marketing are

not just seen as commercial campaigns anymore, it is a way of doing business

(Zineldin, 2006a).

It is widely accepted in the marketing theory that it is more cost efficient to

retain loyal customers than attract new ones (Henning-‐Thurau et al., 2002;

Zineldin, 2006a). Therefore, many companies have rediscovered the use of

marketing tools, such as, relationship marketing (RM) and customer relationship

management (CRM) in markets with changing technology and fierce competition

(Zineldin, 2006a). RM strategies focus on gaining a more personal relationship

between the customer and the company by emphasizing on customer retention

and satisfaction, thereby gaining a competitive advantage and higher

profitability (Álvarez et al., 2011). This is done by creating business processes in

order to attract new customers and retain current, also minimizing cost for

marketing by using customer segmentation (Grönroos, 1996). Focus on loyal

customer, as they are often more willing to pay premium prices, and even

consider terminating costly short-‐term relationships (Henning-‐Thurau et al.,

2002). The link between RM and CRM are quite strong, but CRM are more

technological and database centered (Zineldin, 2006a). CRM focus on making

the customers feel special by automate internal processes in a company by

building enhanced databases, Zineldin (2006a) remark the online dating market

as a good use for CRM tools. In this paper CRM are seen as a part of RM and used

as a RM tool to enhance long-‐term relationships.

Zineldin (2006a) argues that customer loyalty and maintenance of customer

relationship are in a high degree dependent on the customers’ expectations on

the product/service quality. Uncles et al. (2003) mean that loyalty can lead to

both increased revenue and defend current market shares by keeping existing

current customer satisfied. Hallowell (1996) defines loyalty as “behaviors,

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including relationship continuance, increased scale or scope of relationship, and

recommendation (word of mouth advertising) result from customers’ beliefs that

the quantity of value received from one supplier is greater than that available

from other suppliers” (Hallowell, 1996 pp.28). A company cannot throw money

on a marketing program and hope that loyalty is generated (Zineldin, 2006a).

Palmatier et al. (2006) emphasize that successful implemented RM strategies

lead to enhanced customer loyalty and overall firm performance, by providing

the firm with stronger relational bounds with their customers. The 5Qs model

provides the company with needed improvements from the customers’ point of

view by using five quality dimensions, which measures and affect satisfaction

and customer loyalty (Zineldin, 2006a). Zineldin (2006a) define the five quality

dimensions as: 1. quality of object – the technical quality (what the customer

receives, measures the core product/service), 2. quality of process – the

functional quality (how the core product/service are provided to the customer,

measures the delivery of the core product/service), 3. quality of infrastructure

(measures the resources that are needed to provide the product/service, such as

competence and skills, know-‐how, technology and how this activities are

managed), 4. quality of interaction (measures the quality of information

exchange, financial exchange and social exchange), 5. quality of atmosphere (the

quality of the atmosphere in which the company operate). Zineldin (2006a) have

concluded that the 5Qs model can be used in order to measure customer value

and satisfaction, which affect customer loyalty, in order to find a suiting

marketing strategy.

The RM literature provides a long strain of various theories and methods to

explain long-‐term relationships, although, how to gain and maintain a quality

relationship differs in the RM literature (Henning-‐Thurau et al., 2002). This

study will apply the following conceptualization of how to build long-‐term

relationship, based on the existing literature by Zineldin (2006a) product and

service quality affect the customers expectations and overall satisfaction, where

satisfaction lead to loyal customers and long-‐term relationships. Egan (2000)

and Lacey (2007) argue that there are little empirical observations, especially in

the FMCG (fast moving consumer goods, e.g. food) retail market, done in order to

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support different RM theories. Further mentioning that the RM literature does

not provide the practitioners with a definition (Grönroos, 1996) or how to apply

the concept. There is also a lack of information how relationships are

established, maintained, enhanced or, where necessary, terminated (Egan, 2000;

Egan, 2004; Vesel & Zabkar, 2010).

1.2 Problem discussion RMs strategic value within the FMCG sector is questionable (Egan, 2000), as

there are so many different opinions which variables leads to success or failure

(Egan, 2000; Henning-‐Thurau et al., 2002). Palmatier et al. (2006) has found that

a lot of manager has been disappointed with the outcomes of their RM efforts.

Chaston (2000) argues that the nature of the FMCG market with high volume

sales, large number of customers and low profit margins makes it very expensive

to establish long-‐term relationships. Egan (2000) further state that customer

loyalty programs within the FMCG sector, which purpose is to enhance long-‐term

relationships, are more costly than common advertising, the same result were

found in Vesel & Zabkar (2010) research. Aggressive advertising has been

argued to attract both new customers and defend current customer base (Egan,

2000). There is also the possibility that the customer loyalty program does not

give any affect in the long run, as the competitors can copy it (Egan, 2000). When

the only loyalty is the size of the discount, which the loyalty-‐program offers, the

customer experiences the most satisfaction from the exchange where the

discount is the highest (Egan, 2000; Chien & Mautinho, 2000).

Egan (2000) therefore argues that there is no need for customers to be loyal to

one or a portfolio of suppliers in undifferentiated markets, the customer can take

the best deal regardless who provides it. Palmatier et al. (2006) found that RM

strategies are most efficient in markets with high business to customer

interaction, and not that important in the retail section. Egan (2000) concludes

that the relationship mostly exists in the mind of the retailer and that customer

does not experience a relationship with their local supermarket, “this supports

the concept that a relationship can only be said to truly exist if and when the

customer says there is one and not when the company's marketing department

suggests that it may be beneficial to construct one” (Egan, 2000, pp. 385).

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Buckinx & Van den Poel (2005) argues that even small or temporary defections

from loyal customers can have a great impact on the retailer’s profitability, and

can lead to total defection in the long run. Buckinx & Van den Poel (2005)

therefore mean that it is important to discover defection early on, and identify

those customers, which have a chance to stay loyal with some marketing actions.

Babakus et al. (2004) argue that with increased product and service quality

comes customer satisfaction and loyalty. Further, Matsa (2011) found that over

60 % of the companies sees quality as their number one competitive tool.

Although, which qualities to enhance in order to gain loyal and satisfied

customer can be hard to figure out. Zineldin (2006a) argues that the 5 Qs model

interpreter numerous quality factors in order to see how they affect customer

loyalty and satisfaction and results in a assessment, if the marketing strategy has

been successful or not (Zineldin, 2006a; 2006b).

1.3 Research questions • How effective is RM in the FMCG market, in the sense of creating

customer satisfaction and customer loyalty?

• What quality factors are critical, according to the 5Qs model, when

generating a long-‐term relationship within the FMCG market?

1.4 Purpose The purpose with this study is to examine how relationship marketing strategies

can enhance companies’ effectiveness, within the FMCG market, in the sense of

more satisfied and loyal customers. The 5Qs model will be applied in order to see

if there are any critical quality factors that encourage long-‐term relationship.

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1.5 Delimitations There are a number of perspectives and theories dealing with marketing

strategies and quality and how those factors in turn affect the satisfaction and

loyalty. This may be various theories such as SERVQUAL, the Involvement

Theory and Service Value Chain, however, these theories will not be applied in

this study. Furthermore, the study will not examine the selected FMCG

companies individually, this is due to that the authors wish to gain a

comprehensive understanding of the FMCG market and not investigate separate

stores. The authors have also chosen not to focus on the FMCG companies’ view

of its customers and the market.

1.6 Theoretical relevance The research has a theoretical relevance because it can help to develop existing

theory. The study can create a deeper understanding of how relationship

marketing and the 5Q model affects satisfaction and loyalty within the FMCG

market. From a theoretical perspective, the research also contributes with new

theory since this study is the first to link the 5Q model to the FMCG market.

1.7 Empirical relevance This study has an empirical relevance since the results of this study can provide

information about how the companies within the FMCG industry should act to

create long-‐term relationships to gain satisfied and loyal customers. The results

of the research demonstrates which qualities that are important for the

customer and that PRODSERV can be a solution to create long-‐term

relationships. If companies within the FMCG industry have knowledge about this,

it can lead to that the customers within the industry will be more satisfied and

loyal. Furthermore, the study also give FMCG companies an understanding of

what their customers value and can thus develop more effective relationship

marketing strategies.

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2. Methodology

2.1 Scientific theory Research can be defined as a systematic method of thinking and organizing

knowledge with the aim to generate new information (DePoy & Gitlin, 1999;

Hartman, 1998). Hyldgaard (2008) mean that research is about methodically

trying to explain, describe, understand or interpret the reality. An important

factor that influences the drafting of research is therefore the researchers' basic

philosophical assumptions and how the researchers define knowledge about the

reality (DePoy & Gitlin, 1999; Hartman, 1998). It can be assumed that

researchers can apply two various and competing approaches to investigate the

reality and how knowledge of it can be obtained. These approaches are

hermeneutic and positivism (Thurén, 2007; Hartman, 1998; DePoy & Gitlin,

1999; Rosengren & Arvidson, 2002).

Hermeneutic is a scientific approach based on human sciences, where

understanding and interpretation of the human and its expression is vital for

creating knowledge (Hyldgaard, 2008; Andersson, 1979). When hermeneutic is

applied, it can be assumed that the researcher wants answers to how the

phenomenon is constructed and what it means (Jakobsson, 2011). Hermeneutic

is grounded on the assumption that each individual creates its own subjective

reality and hence is the one experiencing knowledge (DePoy & Gitlin, 1999;

Rosengren & Arvidson, 2002). DePoy & Gitlin (1999) argues that each

individual’s philosophies and values can be seen as a lens, which the individual

uses as a tool for understanding the reality and create knowledge (DePoy &

Gitlin, 1999). This means, according to hermeneutics, that it is not possible to

separate the individual from the reality, since knowledge is based on how

individuals perceive and understand their world (DePoy & Gitlin, 1999;

Rosengren & Arvidson, 2002; Andersson, 1979).

In contrast to hermeneutics, positivism is based on natural science and has the

aim to explain a phenomenon (DePoy & Gitlin, 1999; Rosengren & Arvidson,

2002; Andersson, 1979; Hyldgaard, 2008; Hartman, 1998). Andersson (1979)

argues that research conducted from a positivist perspective focuses on trying to

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create a statement of how things are constructed instead of focusing on

understanding how they are constructed. Positivists advocate an approach

where the individual experiences of the world and the actual reality are two

different objects, which means that knowledge is regarded as something that is

independent of the individual (DePoy & Gitlin, 1999; Hyldgaard, 2008). This

means that knowledge and understanding of the phenomenon can be acquired

outside of ourselves (DePoy & Gitlin, 1999). Hartman (1998) suggest that

knowledge is acquired by confirming or contests various assumptions and

theories. Furthermore, Jakobsson (2011) claims, “nothing exists unless it can be

verified” (Jakobsson, 2011 p. 107). By executing observations and sensory data,

different assertion can be examined, which can lead to that true and objective

knowledge can be acquired (DePoy & Gitlin, 1999; Hartman, 1998).

This study will be based on positivistic assumptions. As the purpose of this study

is to examine a phenomenon and to explain the reality, positivistic views can be

seen as appropriate to apply. Data acquisition will be done through quantitative

methods where objective measures are analyzed and dependent and

independent variables will be identified. This approach of data collection is well

suited for positivistic statements view of the creation of knowledge.

2.2 Research interest Scientific studies are classified according to how much existing knowledge there

is in the research area (Olsson & Sörensen, 2011). The size of existing knowledge

in the research area is crucial for the choice of which type of study that will be

conducted. Based on the knowledge that is assumed to exist within an area of

research, the study's research question and purpose is formulated (Olsson &

Sörensen, 2011; Rosengren & Arvidson, 2002). Olsson & Sörensen (2011)

presents three types of research interest that may form the basis of a scientific

study:

-‐ Explorative approach: A study that has an exploratory purpose is applied when

there is relatively little knowledge in the research area (Rosengren & Arvidson,

2002). By using an exploratory approach, sequences of events and relationships

between different phenomena can be explored and described. The goal of an

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exploratory study is to determine causation and gather as much knowledge as

possible within a research area. Therefore, many different kinds of techniques to

gather information are used to collect as much knowledge as possible (Olsson &

Sörensen, 2011; Rosengren & Arvidson, 2002).

-‐ Descriptive approach: A descriptive study aims to describe several

characteristics of a population (Olsson & Sörensen, 2011). Such descriptive

studies are often used when there is a basic understanding and a certain amount

of knowledge in the research area (Olsson & Sörensen, 2011; Rosengren &

Arvidson, 2002). Since some knowledge exists in the research area, limitations to

some aspects of the phenomenon that will be described are made. This means

that the phenomenon will be described thoroughly and in detail (Olsson &

Sörensen, 2011).

-‐ Explanative approach: In explanative studies, various causations are examined

and explained. In the research are, there is a large amount of knowledge which

means that the objective of the study usually is to get a deeper understanding of

the phenomenon. Therefore, what is causing the phenomenon is often

investigated in explanative studies (Olsson & Sörensen, 2011; Rosengren &

Arvidson, 2002).

This study will be written in an explanative approach. The study aims to examine

how relationship-‐marketing strategies can enhance companies’ effectiveness and

the quality factors that encourage long-‐term relationship in the FMCG retail

market. This means that the study's research interests can be considered as

explanative, since the study has the purpose the examine a phenomenon. There

are also a lot of research and knowledge conducted within the research area,

which means that the study will focus on creating a deeper understanding of the

subject.

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2.3 Research approach A scientific study is based on the existence of a problem and questions that aims

to be answered (Olsson & Sörensen, 2011). The methods used to get an answer

to the problem depends on the perspective the researcher uses. It can be

assumed that they are three different perspectives on the relationship between

theory and empirical data and the inference of a scientific study; deduction,

induction and abduction (Olsson & Sörensen, 2011; Thurén, 2007; Andersen,

1994; DePoy & Gitlin, 1999).

A deductive approach means that studies is based on accepted, general

principles, which are applied and used with the aim to explain a specific

phenomenon (DePoy & Gitlin, 1999; Olsson & Sörensen, 2011; Jakobsson, 2011).

Deduction means thus that a scientific study falsifies or verifies what already has

been accepted as truth (DePoy & Gitlin, 1999; Olsson & Sörensen, 2011).

Deduction can also sometimes be explained as a method when the researcher

move away from the big picture and focuses on the details. This means that the

study is based on an accepted theory, which are tested in the study (Jakobsson,

2011).

A research study can also be based on an inductive perspective and approach.

This means that instead of focusing on existing and general principles, the study

is grounded on discoveries from the real world. This means that general

information is obtained from individual events and observations (DePoy & Gitlin,

1999; Olsson & Sörensen, 2011). Unlike a deductive approach, an inductive study

goes from the details to create a whole. An inductive approach can therefore be

considered as theory generating since the study is usually based on empirical

data with the aim to create a theory (Jakobsson, 2011).

An abductive approach is a combination of inductive and deductive principles

(Jakobsson, 2011; Olsson & Sörensen, 2011; Andersen, 1994). This means that by

applying the inductive approach the researcher can create a true depiction of a

problem area, and then apply deductive principles that can increase knowledge

through previous theoretical assertions (Olsson & Sörensen, 2011).

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This study will be conducted based on a deductive approach. The study will use

already generated and accepted theory as a basis to examine whether it is

acceptable or not. Since the study will be grounded on the whole which will be

tested on individual cases, a deductive approach is seen as the most suitable.

2.4 Research methodology In research, there are two different types of research methods that can be

applied, quantitative and qualitative methods. What is decisive for the choice of

method is what the researcher wants to know and study’s objective (Jakobsson,

2011; Olsson & Sörensen, 2011; Bell 2006; Hartman 1998).

Quantitative research methods are a generic term for different data gathering

methods based on the aim that numerical data would be obtained and analyzed

(Jakobsson, 2011; Andersen, 1994). Andersen (1994) believes that quantitative

research methods are useful when the purpose of the study is to find out how

many or how much there is. Therefore, the method is typically used to identify

differences between various variables and to explain different relationships

(Jakobsson, 2011). In a quantitative study, the researcher is objective and has no

relationship with the survey items, which may affect the study results. The

research method is also characterized by structure and the relationship between

theory and empirical data based on confirmation (Olsson & Sörensen, 2011). The

research method also includes many survey items and individuals with a small

number of variables, which may lead to that the result of the study, can be

generalized and valid (Olsson & Sörensen, 2011; Andersen, 1994). Quantitative

data are usually collected through measurements, experiments and surveys

(Jakobsson, 2011; Hartman, 1998; Andersen, 1994).

Qualitative survey methods differ from quantitative studies and are instead used

when the researcher wants to analyze and create an understanding of a

phenomenon’s different traits and characteristics (Andersen 1994; Jakobsson,

2011; Hartman, 1998). Instead of collecting numerical data, researchers are

studying different forms of texts and uses data from interviews or observations

(Jakobsson, 2011). In a qualitative study, the researcher is subjective and creates

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a deep relationship with the study object. Instead of structured methods that are

used in quantitative surveys, qualitative research is characterized by flexibility.

The research method focuses on a small number of study objects, where the

result goes in depth in specific environments (Olsson & Sörensen, 2011;

Andersen, 1994).

In this study, a quantitative research methodology will be used. Since the

purpose of this study will examine if there are differences between various

variables and to investigate the relationship between RM and companies

effectiveness, the quantitative research methodology is considered appropriate.

A quantitative research method is also applied because the authors of this study

will have an objective role in the investigation. The study will be based on

confirmation and include a numerous survey units and individuals with a small

number of variables, implies that a quantitative method is useful.

2.5 Data collection Data collection for a scientific study can be done in several ways. What

determines which form of data collection methodology that will be applied is the

study's purpose and what resources the authors have available (Andersen 1994;

Bell, 2006; DePoy & Gitlin, 1999). Also the study's research method and research

approach is critical for selecting form of data collection (Olsson & Sörensen,

2011; DePoy & Gitlin, 1999).

Data collection can be done by the researcher asks the survey object questions.

The manner of asking questions may be of different nature and vary in structure

and content. Questions are asked, usually by the use of interviews or

questionnaires (DePoy & Gitlin, 1999; Bell, 2006). Interviews are carried out

through verbal communication and can be divided into three categories:

structured, semi-‐structured and unstructured (Bell, 2006; Jakobsson, 2011).

Structured interviews are characterized by control and a predetermined specific

question schedule (DePoy & Gitlin, 1999; Bell, 2006; Jakobsson, 2011). The

structured interview is designed so that all the interviewee is given the same

questions and a certain number of response categories to answer, that later the

researcher can easily summarize and analyze (Bell, 2006; Jakobsson, 2011).

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When the semi-‐structured interviews is applied the interview is more open, but

the researcher still has selected a number of topics to be discussed (Jakobsson,

2011). The interview objects still gets the same questions but has, as opposed to

a structured interview, the ability to independently formulate answers to the

questions (Bell, 2006; Jakobsson, 2011). A structured interview is open and the

questions are asked only to stimulate the respondents to talk (Jakobsson, 2011).

The respondents are able to associate spontaneously, which can generate

interesting data that can give the researchers a new perspective on the problem

area (Bell, 2006).

The researcher can also choose to submit questions to the respondent by using a

questionnaire (DePoy & Gitlin, 1999; Bell, 2006; Jakobsson, 2011). Usually a

questionnaire is administered by asking the questions to the respondents

through face-‐to-‐face, mail or telephone. The questionnaire can be designed both

on structured and unstructured manner. In order to get as much information as

possible from the questionnaire, it is important that the researcher understands

what form the questionnaire should have (DePoy & Gitlin, 1999; Jakobsson,

2011). It is important that the respondents accept the questionnaire and that the

design does not create any problems in the analysis and interpretation of the

response results (Bell, 2006).

The researcher can also, by analyzing and studying the subject, collect the

necessary data. This means that the researcher uses existing data and examines

published documents and materials (DePoy & Gitlin, 1999; Andersen, 1994; Bell,

2006). This provides an opportunity to gather the necessary information needed

to complete the study, since this information is not always available to the

researcher (DePoy & Gitlin, 1999). When studies apply secondary data, it is

important for the researcher to take into account that the material can be angled.

Therefore, the researcher must use secondary data with caution and be aware

that the data was developed for another purpose (Andersen, 1994). A major

advantage of analyzing existing data is that the researcher can save much time

and money (Bell, 2006).

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In this study, questionnaires will be used. Questionnaires were chosen as a tool

to collect data because of its ability to conform to the respondents' needs, does

not involve interviewing effect and that the method saves time and money.

Questionnaires with customers in the FMCG sector were performed in order to

get a picture of how customers are experiencing quality, what they perceive as

satisfactory and if they consider themselves as loyal. The questionnaires were

performed during one week’s time and outside entrance of the FMCG stores City

Gross, Willys, ICA Maxi and Coop Extra in Växjö. A questionnaire was also

performed in Växjö city to get an objective picture from the customers. This was

done to get an interesting result from different perspectives.

A questionnaire were also made with the representatives from companies in the

FMCG sector, in order to get a result that can be compared and analyzed in an

uncomplicated manner. A questionnaire was carried out in three FMCG

companies in Växjö; Willys, ICA Maxi and Coop Extra. City Gross was also asked

to participate in the study but chose to decline. However, the authors chose to

examine the City Gross’s customers since the store is one of the biggest players

in the market and because the study’s main focus was to investigate the market

and not the stores individually.

2.6 Sample and population When a research study is going to be carried out, it is important to take into

account the survey objects and individuals that will be included in the study

(Olsson & Sörensen, 2011; Jakobsson, 2011; Hartman, 1998; DePoy & Gitlin,

1999; Bell 2006). Researchers should therefore define the population that will be

studied at an early stage of the research process (Olsson & Sörensen, 2011). The

population can be defined as a group of individuals who have certain specific

qualities and traits that are interesting to investigate which may help to achieve

the purpose of the study (Jakobsson, 2011; Hartman, 1998). When the entire

population is studied, a comprehensive survey is applied (Hartman, 1998).

However, it is not always possible to examine an entire population because of its

size, which means that a sample must be done (Bell, 2006; Olsson & Sörensen,

2011; Hartman, 1998). The purpose of making a sample is that the researcher

wants to obtain comprehensive and covered information, which can represent

20

and generalize the whole population (Rosengren & Arvidson, 2002).

In science, generally two different forms of sample strategies can be applied,

probability sampling and non-‐probability sampling (Jakobsson, 2011; Hartman,

1998). Probability sampling means that units who participate in the study and

represent the population are selected on a random basis (Jakobsson, 2011). This

means that all units within the population have an equal probability of being

selected for the study (Jakobsson, 2011; Hartman, 1998; Bell, 2006). Probability

sampling can be performed through stratified or systematic sampling

(Jakobsson, 2011). Non-‐Probability sampling is different from probability

samples because the probability of units to participate in the survey is not as

equal study (Jakobsson, 2011; Hartman, 1998; Bell, 2006). Here, certain units

from the population have a greater chance to participate in the study than others

(Hartman, 1998; Bell, 2006). Frequently used sampling strategies in non-‐

probability sampling is convenience sampling or snowball sampling (Jakobsson,

2011).

In this study, two different samplings were used. For the questionnaire, which

examined FMCG stores customers and their values; a probability sampling of 250

individuals both men and women, who were all over 18 years and lived in Växjö,

were used. The authors used a systematic sample. One in three individuals who

came out and had purchased in one of the selected FMCG stores were asked to

participate in the study. If the individual declined to participate in the study,

were less than 18 years or not residents of Växjö, the following individual was

asked. 250 individuals were asked to participate in the survey, but only 200

accepted which gives a responding rate at 80% and thus a shortfall of 20%.

Probability sampling was applied since the respondents were selected on a

random basis and due to the authors wanted to draw reliable conclusions for the

population. By using a randomized sampling technique the authors could also

take the human factor in the selection. The reason that only individuals over 18

years were allowed to participate in the study was that the authors believe that

individuals under 18 years do not purchase the food products themselves and

are not of legal age. The total population of individuals over 18 years in Växjö is

21

66.413 persons (www.scb.se). As the authors have chosen to focus on the four

major actors’ customers, who hold 70% of the market share (Ica, Annual Report,

2011; www.ski.se), the population in the study was 46,450 individuals. To

calculate an appropriate sample size, the authors chose to have 5% margin of

error and 95% confidence interval. The population was 46,450 units and the

authors wanted to have a response rate of 80%. The result showed that the right

sample size was at least 245 units; the study therefore selected a sample of 250

individuals. This means that with 95% accuracy can the authors comment on a

topic (www.raosoft.com; Bryman & Bell, 2005).

For the questionnaire, which examined FMCG companies and their perspective

on loyalty and satisfaction, a non-‐probability sample of 4 FMCG stores were used.

A non-‐probability sample was used since the authors wanted to examine the four

largest FMCG stores in Växjö. Växjö has 42 FMCG stores (www.allabolag.se),

which represents the population of this questionnaire. The stores were

examined and their number of customers and economic turnover were

controlled. The investigation showed that Willys, City Gross, Ica Maxi and Coop

Extra were the stores with the highest turnover and most customers, and

because of this were they selected to participate in the study. For detailed

information about the companies, see appendix 4. In each store that participated

in the study, attended five different individuals with different positions, in order

to get different perspectives on the customers and the store's approach to

loyalty.

2.7 Pilot study In order to ensure that the questions in a questionnaire are useful and properly

understood by the respondents, a pilot study can be conducted (Bryman & Bell,

2005). This means that the questionnaire is answered by a smaller number of

units and then controlled if the respondents have correctly assessed the

questionnaire. In this study 15 various were selected to participate in the pilot

study. The respondents reviewed both questionnaires to see if the questions

were understandable and usable. The pilot study showed that all respondents

understood the questionnaire and had no difficulty in answering any question.

The respondents felt that all questions were simply described, clear, and

22

provided them with interesting thoughts. Furthermore, the respondents

explained that the question structure was natural and good. The authors chose

therefore not to change anything in the questionnaire, as it was perceived

correctly.

2.8 Operationalizing Operationalizing implies how the theoretical information is converted to

empirical data (Potter, 1996; Holme & Solvang, 1997). Various problems may

arise when this process is performed, usually, these difficulties is of a

communicative character. The operationalization is important to implement in

order to get a connection between the theoretical framework and the empirical

data (Holme & Solvang, 1997). Below will be a presentation of the questions

used in the questionnaires and its relationship to the theoretical framework.

2.8.1 Questionnaire with the FMCG stores customers

The information presented below is based on appendix 1.

About the customer The first, second, third and fourth question in the questionnaire examines the

customer's identity. The purpose with these questions is to get an understanding

of which individuals that answers and get ability to exclude people that are less

than 18 years and not inhabitants in Växjö.

The store’s best qualities (see appendix 5)

The fifth question in the questionnaire investigates the customers’ evaluation of

a specific FMCG store and examines which five qualities the customer thinks are

the specific FMCG store best. To see which quality factors the authors have used

and see its theoretical connection, see appendix 5. This question is based on the

theories from Zineldin et al., (2011); Zineldin, (2011; 2006a; 2006b).

Important qualities when establishing a relationship (see appendix 5)

The sixth question in the questionnaire investigates the customers’ perception of

which five quality factors that is important when establishing a relationship with

a FMCG store. To see which quality factors the authors have used and see its

23

theoretical connection, see appendix 5. This question is based on the theories

from Zineldin et al., (2011); Zineldin, (2011; 2006a; 2006b).

Customer satisfaction

The seventh question in the questionnaire examines the customers’ level of

satisfaction of a specific FMCG store. This question is based on the theories from

Parasuraman et al., (1985; 1988), Chang et al., (2009), Giese & Cote, (2000);

Anderson et al., (1994) and Oliver, (1981).

Customer loyalty

The eighth question in the questionnaire investigates the customers’ level of

loyalty to a specific FMCG store. This question is based on the theories from

Jensen and Hansen, (2006); Uncles et al., (2003); Chang et al., (2009); Anderson

et al., (1994); Bowen & Chen, (2001) and Hallowell, (1996).

Grocery shopping (%)

The ninth question in the questionnaire implies that the customers should

explain the proportion of percent the individual believes shops in each store. The

purpose with this question is to see how the customer perceives the market.

The tenth question in the questionnaire investigates the customers shopping

habits. This question is interesting to implement since authors can get an

understanding of how the market works and to see if customers make repeated

purchases.

Membership card/bonus card

The seventh question in the questionnaire investigates the customers’ usage of

membership card/bonus card. The purpose with this question is to examine the

customers’ attitude to customer loyalty programs. This question is based on the

theories from Uncles et al., (2003); Rowley, (2007) and Whyte, (2004).

24

Benefits to establish a relationship

The eighth question in the questionnaire examines the customers’ perspective

on relationships with a FMCG store. The question is based on the theories from

Grönroos (1996); Lehtinen, (2011); Chaston, (2000) and Palmatier et al., (2006).

2.8.2 Questionnaire with representatives from the FMCG stores

The information presented below is based on appendix 2.

About the company

The first question aims to find out the respondents position in the company. By

having different positions from the various FMCG stores represented in the

questionnaire, the authors can get a broader perspective on the company's

perception of customers and their loyalty.

The store’s best qualities (see appendix 5)

The second question in the questionnaire investigates the stores perception of

its best qualities. The quality factors that the company shall value is taken from

many different theories, see appendix 5.

Important qualities when establishing a relationship (see appendix 5)

The third question in the questionnaire examines what quality factors the

company consider important when establishing a relationship. The quality

factors that the company can evaluate is based on various theories, see appendix

5.

Customer satisfaction

The fourth question in the questionnaire study the companies’ evaluation of

their customers’ satisfaction. This question is based on the theories from

Parasuraman et al., (1985; 1988), Chang et al., (2009), Giese & Cote, (2000);

Anderson et al., (1994) and Oliver, (1981).

25

Customer loyalty

The fifth question in the questionnaire examines the companies’ perspective on

their customers’ loyalty. This question is based on the theories from Jensen and

Hansen, (2006); Uncles et al., (2003); Chang et al., (2009); Anderson et al.,

(1994); Bowen & Chen, (2001) and Hallowell, (1996).

Grocery shopping (%)

The sixth question in the questionnaire aims to investigate the FMCG companies’

perception of various market shares. This question is important, since the

authors want to see how the companies perceive the market.

Loyalty program

The seventh question in questionnaire examine if the FMCG stores have any

loyalty programs and how they work. By asking this, the authors can get an

understanding of how the customer works with loyalty. This question is based

on theories from Uncles et al., (2003); Rowley, (2007) and Whyte, (2004).

Benefits to establish a relationship

The eighth question in the questionnaire implies to study the FMCG companies

perception of customer relationships and if there are ant benefits. The question

is based on the theories from Grönroos (1996), Lehtinen, (2011); Chaston,

(2000) and Palmatier et al., (2006).

2.9 Data analysis When analyzing quantitative data, some form of statistical software is usually

used (Bryman & Bell, 2005). The calculations and formulas underlying the

study's empirical data is not included, since the computer program SPSS and the

website Survey Gizmo are applied. In order to perform tests and studies in SPSS,

the various answers that have emerged from the questionnaires has been coded

into variables. There are several different variables and in this study has the

various answers been coded into ordinal, nominal and dichotomous variables.

Ordinal variables mean variables whose categories can be ranked, nominal

variables are also divided into categories but cannot be ranked and dichotomous

variables can hold data that has only two categories (Bryman & Bell, 2005). Any

26

variable used in this study have been dependent on the survey question and the

answer. However, to perform some tests and see various relationships, question

4 was transcoded in SPSS. Instead of having a 10-‐point scale, the responses were

coded into dichotomous variables where 1-‐5 on the scale meant yes and 6-‐10

meant no. The purpose with this was to see if there was a clear correlation

between different variables.

The study performed various forms of data analysis, univariate and bivariate

analysis. Univariate analysis was performed through various forms of frequency

tables, where the authors’ purpose was to see the number of individuals

belonging to each of the categories. The most applied analysis in the study was

bivariate analysis, which means that an analysis between two variables is

performed. This means that the authors one can find if there is a relationship

between variables and how their relationship looks like.

Depending on which variables that were tested, different bivariate tests were

performed. When dichotomous variables and nominal variables were tested, a

contingency table and chi square test was executed. A contingency table is

similar to a frequency table, but in the contingency table is the relationship

between the variables presented. Chi square test is applied to these kinds of

tables, which shows how safe the authors can be if there really is a relationship

between variables. Depending on the confidence intervals used in the test, the

authors can indicate whether there is a relationship between the variables or

not. When a 99% confidence interval is used, the results of the chi-‐square test

need to be below 0.01 to indicate a relationship. When a 95% confidence interval

is used the test is less certainty, which means that the results only need to be

below 0.05 to demonstrate a correlation. These kinds of tests are done with all

nominal variables. When a correlation is explored between ordinal variables or

dichotomous variables, the Spearman's rho test is applied. The calculated value

varies between 0 and 1 and is either positive or negative. Finally, a phi test was

performed. This is a test that is used when the relationship between two

dichotomous variables to be examined. Just as in Spearman's rho, the result is

between 0 and 1, where 1 means a perfect relationship.

27

2.10 Scientific credibility When the researcher has collected the necessary data for the study, it is

important that the information is critically examined and its credibility is

investigated (Bell, 2006). There are two key instruments and quality

measurements that can be applied to test the empirical data’s trustworthiness,

reliability and validity (DePoy & Gitlin, 1999; Bell, 2006).

Reliability investigates if the researcher can rely on the measurement

instruments that have been used in the collection of data (DePoy & Gitlin, 1999).

In order for a study to be classified as reliable, the same results must be obtained

if the data collection would be repeated with use of the same variables, situations

and respondents. If there is no difference between the results from the various

occasions of data collection, the material and measurement instruments can be

defined as credible (DePoy & Gitlin, 1999; Bell, 2006; Jakobsson, 2011).

If a study is to achieve credibility, the data collected and the measuring

instruments used can also meet the quality measurement, validity (DePoy &

Gitlin, 1999). Validity examines whether the study really measures the

phenomenon that the study aims to measure (Jakobsson, 2011; DePoy & Gitlin,

1999; Bell, 2006). Validity ensures therefore if the researcher has succeeded in

identifying a problem and developed the right instrument for it (Bell, 2006). High

validity is also an important prerequisite for the results to be generalized (DePoy

& Gitlin, 1999).

An alternative way to ensure the empirical credibility of the data is to examine

its objectivity. Föllesdal et al. (2001) argue that for a study to be classified as

objective, the researcher must have been neutral in the data collection and have

not affected the study with subjective opinions and attitudes. Föllesdal et al.

(2001) further explains that a study can be defined as objective if repeated

observations of the same phenomenon from the same observer provide a similar

result as earlier observations. Objectivity thus measures if the conclusions of the

study are credible or not. However, it is a lively discussion around the topic of

objectivity since some authors claim that objectivity can be harmful to science

28

since it creates an undue reliance on it and its results (Föllesdal et al., 2001).

In this study were the quality measurements, reliability and validity applied. The

authors have chosen to apply two quality measurements to increase the study's

quality and credibility. The reliability of the study can be demonstrated as high

since the measurement instruments that have been used in the collection of data

can be seen as reliable. An important factor behind this claim is that the sample

in this study may be considered appropriate and reliable. By controlling the

selection of the appropriate size of the sample, the reliability can be increased. If

the operationalization and the sample that is presented in this study were

applied to a similar study, the result would be similar, which can the study

considered as high reliability.

The validity of the study can be considered to be relatively high because the

authors have measured the phenomenon that the study aimed to measure. All

the empirical investigation has been based on gathered theory and the purpose

of the study. This means that the authors have in the design and processing of

the questionnaires, compile of the data and the SPSS's tests had the relevant

theory and the study's purpose in mind. Further, the concepts in the study are

well defined and a variety of variables have been used to get a clear answer to

the questions that indicates a high validity.

29

3. Theory

3.1 Relationship marketing

Lehtinen (2011) raise questions around the gap between marketing research

and marketing practice. Further discussing if the marketing research need one

global paradigm or multiple paradigms. As the marketing theory frequently

states that it is more cost efficient to retain loyal customers than attract new

(Henning-‐Thurau, 2002), one can argue that relationship marketing (RM) is a

good way to gain a competitive advantage (Álvarez et al., 2011). Webster (1992)

defines marketing as a management function which is responsible for assuring

that all divisions in the organization focus on customer relationship and

understands that customer relationships are the company's most important

feature. This definition of marketing goes very well in line with Grönroos (1996)

perspective on RM “relationship marketing is to identify and establish, maintain,

and enhance relationships with customers and other stakeholders, at a profit, so

that the objective of all parties involved are met” and “that this is done by a

mutual exchange and fulfillment of promises” (Grönroos, 1996, pp. 7). Grönroos

(1996) mean that the objectives for RM are to identify and establish, maintain,

and enhance relationships. The Goal is to gain a profit and the tools provided are

mutual exchange and fulfillment of promises. However, it can be hard to

implement a RM mindset throughout a whole organization, as studies have

shown that a lot of the managerial practice is still caught in a transitional

mentality (Lehtinen, 2011; Chaston, 2000). Palmatier et al. (2006) also argues

that some managers have not been satisfied with the result of their RM efforts.

Although, Lehtinen (2011) states that the RM approach can be implemented in

everything from the strategic apex to the operational level, in all organizations.

Palmatier et al. (2006) argues that RM researches assume that RM efforts

engender long-‐term relationships, which increases sales growth, share and

profit. They further states that the effectives of the RM strategy can vary,

depending on the exchange context. A wide range of RM researchers mean that

RM efforts affect one or more relational outcomes; trust, commitment, customer

loyalty, relationship satisfaction and relationship quality (Palmatier et al., 2006;

30

Zineldin, 2006; Álvarez et al., 2011; Chien & Mautinho, 2000; Henning-‐Thurau et

al., 2002; Morgan & Hunt, 1994). Although, there not clear which single variable

or combination of relational variables that affects relational performance the

most (Palmatier et al., 2006; Henning-‐Thurau, 2002). Palmatier et al. (2006)

found in their research that RM and long term-‐relationship affect company

performance. Palmatier et al. (2006) further discovered that RM strategies

enhance long-‐term relationship, but that specific RM strategy only enhances that

part of the relationship. In their research expertise and communication were

found as most effective relationship builders as it gives the customers the most

benefits and value from the relationship.

3.1.1 Relationship mediators Commitment and trust are a popular aspect within the relationship research

(Palmatier et al., 2006; Morgan & Hunt, 1994; Parasuraman et al., 1985).

According to Palmatier et al., (2006), is commitment and trust synonymous with

credibility. Commitment is seen as an effort to maintain a valued relationship

and the level of trust show the partners’ confidence in the other partner´s

reliability and integrity (Palmatier et al., 2006; Morgan & Hunt, 1994). Then,

there is the person’s mindset of the relationship, relationship satisfaction, which

is a reflection of the overall exchange between the partners (Palmatier et al.,

2006;Álvarezet al., 2011). These three elements, commitment, trust and

satisfaction, are seen as the overall global mediators of relationship quality

(Palmatier et al., 2006). Lacey (2007) has another view to it, meaning that it is

economic, social and resource bonds that bring the firm and customers together,

where financial bonds are seen as the most important. There is a connection

between Lacey’s (2007) resource bond and Palmatier et al. (2007) expertise, as

both mean that the customer cannot receive that valuable resource anywhere

else. Lacey (2007) emphasize that the more a company strengthen economic,

social and resource drivers, the more successful will the company become in

building customer relationships.

What drives a customer to engage in a relationship varies; it could be benefits in

form of a discounts, to save time, convenience or companionship (Morgan &

Hunt, 1994; Palmatier et al., 2006; Buckinx & Van den Poel, 2005). On the other

31

hand companies invest money, time, effort and resources (referred to as

relationship investments) to enhance relationship (Palmatier et al., 2006) in

order to reap a higher profitability and more market shares, both by defending

existing and gain some new customers (Henning-‐Thurau et al., 2002). By doing

this relationship investment, the company can offer their customers a higher

value and thereby making the relationship more important to the customers

(Palmatier et al., 2006). Lacey (2007) has found that a firms economic value to

the customers has a large impact on the customers commitment rate towards

that company, although, the result between increased switching cost and

commitment had mixed support. As the relationship becomes more important

for the customer they are more willing to also invest their own time to maintain

it (Palmatier et al., 2006). This can be very important in the long run as one part

often receive a larger cake of value early and the other have to wait in order for

the other to replicate it (Morgan & Hunt, 1994).

To make something more of the relationship it is important to have a clear and

qualitative information exchange between the parties (Palmatier et al., 2006;

Uncles et al., 2003). Communication between the partners enable shared goals,

resolve disputes and create new opportunities (Palmatier et al., 2006; Morgan &

Hunt, 1994). Zineldin (2006a) argues that a high product and service quality lead

to loyal and satisfied customers. Although, Palmatier et al. (2006) state that it

can be difficult to evaluate the level of customer loyalty. As only a low degree of

loyalty can lead to reports of a high continuity expectations. From the customer’s

point of view, this can be just due to lack of time to evaluate alternatives and

perception of high switching cost; the company builds barriers rather than

relationships (Palmatier et al., 2006). There is also a problem as a customer can

have a strong relationship to one selling person, but not to the selling firm as a

whole. Providing a problem when evaluating the RM strategies effectiveness as it

can provide two total different results, depending on whom in the organization

that delivers it (Palmatier et al., 2006). Lacey (2007) found that customer

recognition and shared values increase customer commitment. Lacey (2007) did

not investigate the result between one specific salesperson and the whole firm

though.

32

3.1.2 RM in a FMCG market Food and grocery constituted 53% of the total private consumption 2008

(Prasad & Aryasri 2008b). The western format of stores is spreading over the

world with concepts such as convenient stores, supermarkets and specialty

stores (Prasad & Aryasri 2008b). Anderson et al. (2007) argues that customer

value is build through customer relationship, which in the end increases the

enterprise value. Anderson et al. (2007) even mean that a customer centric view

is necessary in order to stay competitive, pushing towards a shift in the

organizational thinking to a more customer centric focus within the retailing

market (Anderson et al., 2007). Prasad & Aryasri (2008a; 2008b) states that the

food industry has traditionally been characterized by transactional marketing,

but due to a multitude of changes in marketing environment, demography,

cultural attitudes, customer awareness and technology embraced relationship

marketing. Anderson et al. (2007) and Prasad & Aryasri (2008a) mean that the

retailing industry faces a dynamic and competitive market; therefore, the

importance of customer relationship increases as a tool to gain competitive

advantage. This is done by implementing the RM systems and processes to

manage customer data and information (Anderson et al., 2007). Anderson et al.

(2007) and Prasad & Aryasri (2008b) argue that RM tools provide companies

with the possibility to react to shifting customer need and wants. When the

company gains more knowledge about the customer, studies have shown that

the overall customer satisfaction increases to (Anderson et al., 2007).

Prasad & Aryasri (2008a) concluded in their research that in order to retain and

gain loyal customers, the company must actively work on building a quality

relationship. Sun & Lin (2010) states that customer loyalty is one critical factor

when competing for market shares. One way to do this is by implementing

loyalty programs to award loyal behavior (Prasad & Aryasri. 2008a) Anderson et

al. (2007) concluded in their research that marketing effectiveness was the most

desired goal when implementing RM tools and thereby improving customer

loyalty. Prasad & Aryasri (2008a) found that retail managers should build loyalty

by focusing on trust and commitment, after that increase the communication

frequency and show a lot of concern and empathy. Although, Prasad & Aryasri

33

(2008a) states that commitment were found as the most independently

important factor. Sun & Lin (2010) also found in their research that you must

first gain the customers trust before you are able to make them loyal, not that

commitment was the most important factor but just trust. Sun & Lin (2010)

further found that the stores should focus on providing a high service quality

through competence, benevolence and problem solving to gain the customers

trust.

3.2 Quality

The concept of quality has become an important element in many of today's

industries (Sandholm, 2005; Desai, 2011; Matsa, 2011; Jain & Gupta, 2004;

Reeves & Bednar, 1994). Since the 1980’s the focus on quality has increased

drastically and there are many contributing factors that has made this

development possible. Some reasons are that customers demand better quality,

increased competition in the markets, stakeholders demand increased profits,

changes in legislation, etc. (Sandholm, 2005; Parasuraman et al., 1985). To

deliver the right quality to the customers has therefore become an important

goal for many companies and a significant competing factor (Desai, 2011; Matsa,

2011; Jain & Gupta, 2004; Parasuraman et al., 1985). Babakus et al., (2004) says

that if a company improves the quality of its products or services, the customer

loyalty and satisfaction may increase, the costs will decrease which in turn will

lead to that the company gets an improved financial and competitive position.

Matsa (2011) argues that in a recent study, 66% of the questioned companies

said that the quality of their product or service is their key competitive factor,

while only 11% responded that they competed on price. Furthermore, Grandzol

& Gershon (1997) present in their study that half of a company's money destined

for development and training is spent on quality issues, which indicates the

quality concept’s importance.

However, the concept of quality can mean many different things and have

various definitions depending on the context (Desai, 2011; Matsa, 2011; Jain &

Gupta, 2004; Reeves & Bednar, 1994). Crosby (1979) means that quality often

can be mistaken for being goodness, luxury, shininess, or weight. Early research

34

of the quality concept focused mainly of the quality of products and tangible

goods (Desai, 2011). But, in the 1980’s when the economic importance of the

manufacturing sector declined and the service sector grew, the concept of quality

was developed and applied to different types of services (Desai, 2011; Jain &

Gupta, 2004; Parasuraman et al., 1985). The concept of service quality was

therefore developed, since the use of a product-‐based definition of quality in the

service sector was unsuitable (Parasuraman et al., 1985; Jain & Gupta, 2004).

3.2.1 Product quality

Product quality has long been considered as an important tool for creating an

efficient and profitable business. (Desai, 2011; Matsa, 2011; Jain & Gupta, 2004;

Reeves & Bednar, 1994) However, there is difference of opinion about how

product quality is created (van Kemenade et al., 2008). Many authors have been

involved in the research of product quality. This have lead to that are a various

perspectives and views on how product quality is defined (van Kemenade et al.,

2008; Reeves & Bednar, 1994). According to Garvin (1984) and Reeves & Bednar

(1994) five different approaches and definitions on product quality can be

identified: 1. the transcendental approach; 2. the product-‐oriented approach; 3.

the customer-‐ oriented approach; 4. the manufacturing-‐oriented approach; and 5.

the value-‐for-‐money approach. Usually, only one of these definitions of product

quality is used (Garvin, 1984).

The transcendental approach equates product quality with innate excellence

(Garvin, 1984; Desai, 2011; van Kemenade et al., 2008). Garvin (1984) argues

that this perspective perceive product quality as something that can be

recognized but not defined. Further, Garvin (1984) explains that a high quality

product based on the transcendental approach is "both absolute and universally

recognizable, a mark of uncompromising standards and high achievement"

(Garvin, 1984 pp. 25). Desai (2011) mean that the transcendental approach

implies that product quality comes from experience and repeated exposure. The

product-‐oriented quality means that product quality is a measureable variable

where the product attributes are the focus (Garvin, 1984; Desai, 2011; Zeithaml,

1988). Lehtinen & Lehtinen (1991) argue that product quality is measured based

35

on the quality of the physical product’s elements such as materials, appearance

and durability. The manufacturing-‐oriented approach expands the picture and

investigates the product quality under the production process and after the

product has been delivered (Garvin, 1984; Desai, 2011). Zeithaml, (1988)

explains the approach as how well the product is adapted to the manufacturing

specifications. The customer-‐ oriented approach on product quality means that

quality is subjective and determined by the customer (Garvin, 1984; Desai,

2011). Garvin (1984) and Desai (2011) explains that this approach suggests that

the products that best conform to an individual’s preferences will create the

highest quality. In the value-‐for-‐money approach, product quality is based on

value and price (Garvin, 1984; Desai, 2011). This approach mean that product

quality is affected by the amount of money the individual is willing to pay for a

specific product (Desai, 2011). Garvin (1984) further explain that if an individual

perceive that the product delivers good value for the price, it can be assumed

that the product has high quality. Curry (1985) demonstrated in a study that

individuals is affected by differences in value and found that companies that

offered high quality products at low prices created value for the individuals,

which in turn led to that the companies became market leaders.

3.2.2 Service quality

In the service sector the concept of quality is also considered to be an important

success factor (Venetis & Ghauri, 2004). The concept is debated and many

authors have presented the importance of creating service quality (Jain & Gupta,

2004; Desai, 2011; Parasuraman et al., 1985). If a company offers service quality

it can increase the market share, return on investment and customer satisfaction

(Jain & Gupta, 2004; Parasuraman et al., 1985; Babakus et al., 2004). Venetis &

Ghauri (2004) mean that service quality can help a business to get loyal and

attract new customers by offering a service quality that differentiates the

company. In order to offer a high service quality and be able to differentiate,

Desai (2011) mean that a company must understand the customers wants and

needs, so that the company can develop and adapt their resources to customer

preferences.

36

The concept of service quality is different from the concept of product quality. A

service is intangible, heterogeneous, perishable and inseparable from production

and consumption, which means that a service will not be as easy to measure and

evaluate as a product (Jain & Gupta, 2004; Parasuraman et al., 1985; Grönroos,

1984). When an individual is purchasing a product it can evaluate it by its color,

style, hardness, label, feel, package but when purchasing a service these

attributes do not exist (Parasuraman et al., 1985). This means that companies

find it more difficult to form an opinion about customer preferences and needs,

which means that it can become complex to offer the "right" service quality (Jain

& Gupta, 2004; Parasuraman et al., 1985).

There are a number of different definitions of service quality. Parasuraman et al.

(1988) defined service quality as “a global judgment, or attitude, relating to the

superiority of the service” (Parasuraman et al., 1988 p. 16). Lehtinen & Lehtinen

(1991) and Parasuraman et al. (1985) argue that service quality is created by

individuals' subjective perceptions and how they perceive the service. Also

Grönroos (1984) argue that an individual’s perception have a major impact on

service quality and simply believes that service quality is what the customer

considers to be service quality. Grönroos (1984) further state that service quality

can be defined as verification on that the company has met the customer's

service expectations.

In order to examine and investigate what factors that affect service quality,

Parasuraman et al. (1985; 1988) have identified ten different determinants:

1. Reliability: Implies if the customer can depend and trust on the firm. The

ability to deliver the expected service. For example, accurate billing and

performs the service during the agreed time (Parasuraman et al., 1985).

2. Responsiveness: Includes the employees' willingness to offer an effective

and good service. For example, give fast answers (Parasuraman et al.,

1985).

37

3. Competence: This means that the person who executes the service has the

right knowledge and skills. For example, research capability of the

organization (Parasuraman et al., 1985).

4. Access: The ability to contact and accessibility of the service provider. For

example waiting time and open hours (Parasuraman et al., 1985).

5. Courtesy: The employees’ treatment of the customers. Involves politeness,

respect and thoughtfulness. For example, that the employees is behaving

and taking into account the customer's privacy (Parasuraman et al.,

1985).

6. Communication: The service provider needs to communicate to the

customer so that the individual understands the service. For example,

explaining the service itself and the cost (Parasuraman et al., 1985).

7. Credibility: The service provider’s trustworthiness and honesty. For

example, reputation and the employees’ personal characteristics

(Parasuraman et al., 1985).

8. Security: The nonappearance of risk, danger and doubt. For example, the

company’s financial security and confidentiality (Parasuraman et al.,

1985).

9. Understanding: Involves the service providers understanding of the

customers needs. For example, offer the right service to the right

customer by investigating their needs. (Parasuraman et al., 1985).

10. Tangibles: Means that the company can demonstrate that physical

confirmation of the service. For example, facilities, tools, appearance of

employees (Parasuraman et al., 1985).

38

3.2.3 PRODSERV Zineldin (1995; 2005) have a different perception of product and service quality.

Zineldin (1995; 2005) and Zineldin & Bredenlöw (2001) mean that the

customers do not just buy a physical product or a pure service, but a service is

always connected to and included into a product. Zineldin & Bredenlöw (2001)

explain that since almost all products have a service, one should not distinguish

between product and service since it can be unhelpful. Zineldin (1995; 2005)

has developed the concept of PRODSERV, a product/service package, which

means that the core product and service combined creates the total quality. By

offering a high PRODSERV quality, companies can build loyal and attract new

customers (Zineldin, 2005).

Grönroos (1984) also believes that quality cannot be measured only on tangible

or intangible attributes, instead Grönroos (1984) argue that the product and

service together constitute the total product. Grönroos (1984) claims that two

dimensions, as seen from the customer’s perspective, affect total quality.

Grönroos (1984) has therefore developed the two-‐dimensional model where

technical and functional quality is the determinants of the total quality. The

technical quality is what the customer receives from the service provider, the

psychical product. For example, the bed the customer gets in a hotel room or the

meal the customer gets into a restaurant. Functional quality can be explained as

how the customer receives the technical quality, the facilitating service. For

example, how the waiter at a restaurant responds to the client (Kang & James,

2004; Grönroos, 1984). Grönroos (1984) and Kang and James (2004) argue that

together, these two components create the customer's total perception about

service quality.

39

3.2.4 Quality within the FMCG market The Fast Moving Consumer Goods (FMCG) market is constantly changing and

new marketing strategies is established all the time (Thamaraiselvan & Raja,

2008). For businesses established in a FMCG market, it is therefore important to

understand the market and to be competitive. By offering products and services

with high quality, companies can potentially create a competitive advantage and

capture market share (Thamaraiselvan & Raja, 2008; Matsa, 2011).

For a business that is active within the FMCG sector, it is not the physical product

that is the main offer. Instead, the firm’s main “product” is the shopping

experience, which includes both the physical products and the staff’s service

(Thamaraiselvan & Raja, 2008; Matsa, 2011). The shopping experience can be

seen as Zineldin’s (1995; 2005) concept of PRODSERV. Just as product and

service quality, there are many factors that affect the customer's quality

perception of the shopping experience, involving the storehouse's location, the

speed of the checkout, cleanliness, the politeness of the personnel, access to

other support services such as parking and packaging and how wide the range is

(Matsa, 2011). If a company in the market wants to be perceived as high quality,

it is also of value to ensure that all products are in stock (Thamaraiselvan & Raja,

2008; Matsa, 2011; Anderson et al., 2006). Studies have shown that what makes

a customer most dissatisfied with a company in a FMCG market is if the wanted

product is not available (Matsa, 2011). Matas (2011) says that it costs the FMCG

market billion’s of dollars if they cannot offer the customer the product they

desire. By not having a full assortment and products in stock, the stores are also

taking a risk of losing the individual as a customer since the he or she goes to a

rival company instead that can offer what the he or she wishes (Thamaraiselvan

& Raja, 2008; Matsa, 2011; Anderson et al., 2006). Research has also shown that

companies that have goods in stock are also cleaner, have faster checkouts and

have more polite staff (Matsa, 2011).

40

3.3 Customer satisfaction Customer satisfaction has become an important element for many of today’s

businesses. Studies have shown that by providing high-‐quality products and

services, customer gets satisfied and loyal and influence profitability (Anderson

et al., 1994). Parasuraman et al. (1985; 1988), Oliver (1981) and Chang et al.,

(2009) believe that customer satisfaction is a function of perceived service and

product quality, which may create a repeating purchase behavior. Anderson et al.

(1994) further describes the benefits with high customer satisfaction and

implies that decreased price elasticity, increased customer loyalty, decreased

future transactions costs, reduced charges imposed on attracting new customers

and an improved reputation of the company, is a result of high customer

satisfaction.

Finding one definition and to clarify what customer satisfaction really means is a

difficult task (Giese & Cote, 2000; Anderson et al., 1994; Oliver, 1981; Chang et

al., 2009). Chang et al., (2009) believes that customer satisfaction is generally

viewed as a psychological reaction of the customer and an evaluation of

emotions. The psychological process and the creation of customer satisfaction is

affected by the customer’s previously knowledge and experience and how the

customer believes the results provided live up to what was expected (Chang et

al., 2009). Barnes et al., (2004) further explain that the overall positive or

negative emotions the customer gets about the net value from the services and

products that are delivered, define customer satisfaction.

Customer satisfaction can further be conceptualized and distinguished in two

extensive ways: as transaction specific or cumulative customer satisfaction

(Anderson et al., 1994; Chang et al., 2009; Giese & Cote, 2000; Boulding et al.,

1993; Shankar et al., 2003). Transaction specific customer satisfaction implies

that satisfaction is transaction based and grounded on the customers’ feelings

towards the performance of a product and/or service (Shankar et al., 2003).

Anderson et al. (1994) state that this perspective se customer satisfaction “as a

post-‐choice evaluative judgment of a specific purchase occasion” (Anderson et

al., 1994 p. 54). Oliver (1981) support the transaction specific customer

41

satisfaction perspective and therefore define customer satisfaction as “a

summary psychological state resulting when the emotion surrounding

disconfirmed expectations is coupled with the consumer's prior feelings about

the consumption experience" (Oliver, 1981 p. 27).

Instead of focusing on the customer’s evaluation of a specific service meeting or

product use in a specific encounter, cumulative customer satisfaction involves

the customer’s overall experience and evaluation of the service or product over

time (Anderson et al., 1994; Chang et al., 2009; Giese & Cote, 2000). This means

that customer satisfaction is more likely affected by factors that are present in

the repeated transactions (Shankar et al., 2003; Anderson et al., 1994).

Anderson et al. (1994) further explains that cumulative customer satisfaction

can provide important information about companies past, current and future

achievements.

3.4 Customer loyalty Since the global competition has increased, entering market has become easier

and the rivalry for customers has intensified -‐ customer loyalty can be seen as an

important basis for developing a sustainable competitive advantage (Jensen &

Hansen, 2006; Uncles et al., 2003; Chang et al., 2009; Bowen & Chen, 2001;

Hallowell, 1996). Studies have shown that companies with loyal customers have

larger market shares, which can be associated with higher rates of return on

investments and profitability (Jensen & Hansen, 2006; Uncles et al., 2003; Chang

et al., 2009; Anderson et al., 1994; Bowen & Chen, 2001; Hallowell, 1996). Bowen

and Chen (2001) claims that if a company have the ability to retain 5% more

customers, the profits can increase with 25 to 125%. Furthermore, Hallowell

(1996) suggests that customer loyalty increases the company's profitability

through increased revenue, decreased costs of attracting new customers, lower

price sensitivity and reduced service costs. The importance of customer loyalty

has thus meant that companies have begun to develop specific customer loyalty

programs, which is a way and tool for companies to connect customers to the

company with the hope of increasing customer loyalty (Jensen & Hansen, 2006;

Uncles et al., 2003). The increased interest on customer loyalty has also meant

that much research has been executed on the subject (Chang et al., 2009;

42

Anderson et al., 1994; Bowen & Chen, 2001).

Customer loyalty is central to the company when it comes to retaining existing

customers. The concept is widely debated and Uncles et al. (2003), Jensen and

Hansen (2006), Bowen & Chen, 2001 and Dick & Basu (1994) claims that no

general and unified definition of customer loyalty can be distinguished. Hallowell

(1996) defines loyalty as “behaviors, including relationship continuance,

increased scale or scope of relationship, and recommendation (word of mouth

advertising) result from customers’ beliefs that the quantity of value received

from one supplier is greater than that available from other suppliers” (Hallowell,

1996 p.28) Uncles et al. (2003) however, define customer loyalty as: “something

that customers may exhibit to brands, services, stores, product categories and

activities.” (Uncles et al., 2003 p. 295) Since there is no general definition on the

concept, three different perspectives on customer loyalty can be identified

(Uncles et al., 2003; Dick & Basu, 1994; Bowen & Chen, 2001; Jensen & Hansen,

2006; Chang et al., 2009):

1. Loyalty is an attitude

2. Loyalty is indicated in terms of revealing behavior

3. Loyalty is affected by an individual’s characteristics and the environment

Loyalty as an attitude implies that true customer loyalty can only occur if there is

a strong attitudinal commitment (Uncles et al., 2003; Dick & Basu, 1994; Bowen

& Chen, 2001; Chang et al., 2009). Attitudinal commitment can be investigated by

asking people how they feel about a brand’s specific product or service

compared to competing brands, their commitment level to it and if they will

recommend it (Uncles et al., 2003; Bowen & Chen, 2001; Hallowell, 1996; Chang

et al., 2009). According to Jensen and Hansen (2006) true loyalty can only exist if

the consumer embraces a positive attitude towards the brand and suggest that

favorable attitudes influence repeat purchasing. Jensen and Hansen (2006)

therefore propose that customer loyalty is a result from psychological processes.

Uncles et al. (2003) however, argue that there is also opposed to this approach.

The critics mean that this perspective is less valid and useful when investigating

low-‐risk purchases, impulse buying or frequently purchased brands, since

43

people may not have strong attitudes towards these brands and products. It is

also claimed that this perspective has little systematic empirical research,

therefore it cannot be verified or disproved (Uncles et al., 2003; Bowen & Chen,

2001; Hallowell, 1996; Chang et al., 2009).

Customer loyalty can also be indicated in terms of revealing and previous

purchasing behavior (Uncles et al., 2003; Dick & Basu, 1994; Bowen & Chen,

2001; Hallowell, 1996; Jensen & Hansen, 2006; Chang et al., 2009). Uncles et al.

(2003) and Bowen & Chen (2001) claims that this is a controversial perspective

on loyalty, but states that this perspective is the best supported by empirical

data. This perspective implies that customer loyalty is based on past purchase

behavior and an individual’s motivation or commitment to a brand is secondary

(Chang et al., 2009; Uncles et al., 2003; Bowen & Chen, 2001; Hallowell, 1996).

The researchers who promotes this perspective claims that individuals who

repeat purchasing a brand, buys the same brand because they do not have

motivation for searching for an alternative or because of lack of time (Uncles et

al., 2003; Dick & Basu, 1994; Bowen & Chen, 2001; Hallowell, 1996; Chang et al.,

2009). Supporters of this perspective believe therefore that strong attitudes or

commitments do not affect customers (Uncles et al., 2003).

Despite the strong support from empirical data, the behavioral perspective faces

a lot of criticism. Jensen & Hansen (2006) argues that it is impossible to detect

previous purchasing behavior, which may mean that companies cannot gain any

understanding of how to build customer loyalty. Jensen & Hansen (2006) further

claim that the purchase decision that the customer is facing rarely is done in a

completely arbitrary manner, since repeated purchase is not just a random

response but instead the outcome of certain procedures. Furthermore, Dick &

Basu (1994) agree with Jensen & Hansen (2006) and mean that true customer

loyalty to a brand is based on the individuals’ attitudes. The authors’ claim that

an individual can make repeated purchases from a specific brand without being

loyal. Dick & Basu (1994) further suggests that the individual can be affected by

situational conditions such as brands positioned on a specific place or stocked by

the retailer and therefore purchase a product “unknowingly”. If the individual

44

does not have an attitude or feeling for the brand he or she is purchasing

repeatedly, Dick & Basu (1994) calls it spurious loyalty, which can be defined as

non-‐attitudinal influences on an individual’s behavior, for example social

influences or if the individual perceives a small different between competing

brands.

According to Uncles et al. (2003), some researchers regard the concept of

spurious loyalty as synonymous with the perspective on customer loyalty where

customer loyalty is affected by an individual’s characteristics and the

environment. This perspective is a combination between having attitudes

towards a brand and previous purchasing behavior, which implies that people’s

characteristics and the environment they are in, may affect customer loyalty

(Uncles et al., 2003; Bowen & Chen, 2001; Dick & Basu, 1994; Chang et al., 2009).

Researchers’ who promotes this perspective suggests that attitudes towards a

brand are an important factor in customer loyalty – but there are also other

factors that may affect an individual’s loyalty (Uncles et al., 2003; Bowen & Chen,

2001). Current circumstances, individuals’ characteristics, and/or the purchase

situation the individual is in, is also determining factors for which brand that are

wanted. It can therefore be said that this three-‐factor model is founded on

antecedents, contingency factors and consequences (Uncles et al., 2003). Those

researchers who oppose this perspective and argue that it creates a spurious

loyalty mean that if, for example the specific situational factors are removed, the

individual's purchasing behavior may change (Uncles et al., 2003; Chang et al.,

2009; Bowen & Chen, 2001) However, Uncles et al. (2003) argues that this

assumption on customer loyalty cannot be regarded as spurious since there is

not enough sufficient evidence.

For a company, it can be difficult to decide which perspective on customer

loyalty is the right to apply. Depending on which perspective the company

adopts, the outcome and the strategy can be different (Uncles et al., 2003; Bowen

& Chen, 2001). Uncles et al. (2003) and Rowley (2007) claim that when the

company perceives customer loyalty as depending on attitudes, the company’s

strategy may be to enhancing attitudes about the company and strengthening the

45

commitment of customers to the brand. But, if the company instead focuses on

customers’ previous purchasing behavior the strategy may be to maintain the

company’s market share and accomplish growth via increased market

penetration (Uncles et al., 2003; Bowen & Chen, 2001; Rowley, 2007). However,

if the company focuses on the third perspective where the individual's

characteristics and specific situational factors play a role, the strategy may be to

extending opening hours, having 24-‐hour call centers or providing online access

(Uncles et al., 2003). What perspective the company chooses may therefore have

a major impact on how the company formulates its marketing strategy since the

perception of the company’s customers, the customers’ characteristics and their

purchasing behavior may be an important factor in the formulation (Uncles et al.,

2003; Dick & Basu, 1994; Bowen & Chen, 2001; Jensen & Hansen, 2006; Chang et

al., 2009)

An important prerequisite to create customer loyalty is that the customer is

satisfied (Bowen & Chen, 2001; Hallowell, 1996; Chang et al., 2009; Zeithaml,

1988). Customer satisfaction and customer loyalty has a strong relationship and

the company's ability to retain and create re-‐purchasing customers is strongly

related to the customer satisfaction intensity (Chang et al., 2009; Zeithaml,

1988). Hallowell (1996) explains that customer satisfaction influences customer

loyalty, which may lead to that companies develop profits. Further, Chang et al.

(2009) suggests that unsatisfied customer switch easily to a rival company and

the chance for redemption is reduced. Although customer satisfaction is an

essential factor in creating customer loyalty, it does not automatically lead to

that loyalty arise (Chang et al., 2009; Bloemer & Kasper, 1995). Studies have

shown that although the customer is satisfied, the creation of customer loyalty

differs among products, industries and situations, which also affect customer

loyalty (Chang et al., 2009; Bloemer & Kasper, 1995; Hallowell, 1996).

46

3.4.1 Customer loyalty programs A strong trend in today's society is that companies spend millions of dollars in

various forms of RM activities and customer loyalty. An important part and

expression of this trend is the use of customer loyalty programs (Uncles et al.,

2003; Rowley, 2007; Whyte, 2004). Uncles et al., (2003) implies that there are

two main purposes of customer loyalty programs from the company's point of

view. One purpose for the company is to create a strong and long-‐term

relationship with the customer. Uncles et al., (2003) mean that a strong

relationship implies that company can retain their customer base and prevent

their customers to searching for other alternatives. The other purpose with

customer loyalty programs is to get the customer to increase their consumption

to other products and services that the company offers, or get the customer to

consume more in line with existing patterns with the aim to increase the total

sales (Uncles et al., 2003). Uncles et al., 2003 explains that this can be

accomplished by rewarding loyal customers through different promotions and

bonus points, which can be turned into various discount checks. Rowley (2007)

however, claims that it is not the customer loyalty programs and the different

reward mechanisms themselves that create loyalty; instead they can enhance

and highlight a company's various offers.

An effective customer loyalty program that will impact on customers and create

a long-‐term commitment can be hard to develop. According to Uncles et al.,

(2003) it can be an advantage for businesses in the creation of an effective

loyalty program if they are established in markets where repetitive purchases

and direct competition between brands occur. It is also important for the

marketing manager to, for example investigate who the company's customers

are, which perspective the firm has on customer loyalty, if the loyalty program

will grow market share and sales revenues, if the program appeal customers and

how the overall profitability of the program will be calculated (Uncles et al.,

2003).

47

Although, more and more companies, primarily in trade and services industries,

uses and implements various forms of customer loyalty programs it is discussed

if this marketing activity really is effective (Rowley, 2007; Uncles et al., 2003).

Rowley (2007) mean that implementing a successful customer loyalty program

is a complex task. Companies that implement a customer loyalty program have

the objective that it will be profitable and create customer loyalty. However, it

may be difficult for the various companies to calculate what the cost for the

loyalty program may be (Rowley, 2007). This is mainly due to loyalty programs

are rarely fully costed. Uncles et al., (2003) also mentions that difficulties

interpreting the information about the customer loyalty programs sales effects

may arise. Companies often have too much information about a particular type

of sales, while they have no other information. Information can also be

contradictory and get away from data that is reliable (Uncles et al., 2003).

Furthermore, Rowley (2007) and Whyte (2004) discuss what type of customer

loyalty various customer loyalty programs create and its effectiveness. Rowley

(2007) argue that a lot of customer loyalty programs are ineffective and a lot of

individuals who are included in these loyalty programs relatively infrequently

utilizes various customer loyalty activities. Whyte (2004) also claims that

customer loyalty programs only create temporary loyalty, which could create

difficulties for customers’ development of a long-‐term commitment. However,

Uncles et al., (2003) argues that if a customer loyalty programs is sufficiently

appealing for people, they might switch brand and implement the customer

loyalty program. The hard part is therefore not to attract new customers, but to

make sure to maintain them and make the program effective where customers

participate and utilize the various offerings (Uncles et al., 2003). Whyte (2004)

believes that customer loyalty programs tend to create a calculating form of

commitment, which only affects individuals’ behavior. This may mean that

customer loyalty programs do not create any kind of deeper loyalty based on the

feelings of the company (Whyte, 2004). However, this assumption may only be

valid if a company supports the perspective that the customer loyalty is created

through attitudes since the other perspectives on customer loyalty focuses on an

individual’s behavior. Despite various problems and criticism on customer

48

loyalty programs, Uncles et al., (2003) argue that this is the marketing activity

will be around for a long time to come. Therefore, the authors claim that this

topic is important to investigate and continue to discuss.

3.5 5Qs model Grönroos (2006) two-‐dimensional (technical and functional) view on quality is

well known in the quality theory (Zineldin et al., 2011; Zineldin, 2011; 2006a;

2006b). Technical quality is the quality of the core product itself, and if the

product/service specifications fulfill the customers need and wants (Zineldin,

2011; Zineldin et al., 2011). The functional quality is the quality factors

surrounding the core product, how the core product is delivered by the company

(Zineldin, 2011; Zineldin et al., 2011). Zineldin (2011) argues that the technical

and functional qualities are important when measuring customer satisfaction,

although, he sees more to it than that. Further, arguing that the atmosphere

where the firm operate in, affect the customers perception of satisfaction. The

interaction and information exchange between customers and company and the

infrastructure, the basic resources that are needed to deliver the

product/service. The SERVQUL model can interpret a lot of variables in a

multidimensional approach, but the 5Qs model assures relevance, validity and

reliability as it in the same time are very change oriented (Zineldin et al., 2011;

Zineldin, 2011; 2006a; 2006b). The 5Qs model can be seen as a more

comprehensive model, as other models are missing essential and

multidimensional attributes (Zineldin, 2006a; 2006b; Byrd, 2009). In order to

measure, especially service qualities, the management has to translate their

quality objectives into measurable indicators to see how each indicator influence

the end result (Zineldin, 2006b). Zineldin (2011) uses in one study the 5Qs

model to examine student´s perception of satisfaction in a higher education

institute to see which quality factors a seen as the most critical. Zineldin (2011)

mean that the result can be used to re-‐engine and redesign quality-‐management

processes to be more effective (Zineldin et al., 2011; Zineldin, 2006a; 2006b).

49

Zineldin (2006a, pp. 432) defines the five-‐quality dimension as follow:

. Q1. Quality of object: the technical quality (what customer receives). It

measures the core PRODSERV itself.

. Q2. Quality of processes: the functional quality (how the PRODSERV provider

provides the core PRODSERV (the technical). It can be used to pinpoint

problems in service delivery and to suggest specific solutions.

. Q3. Quality of infrastructure: measures the basic resources which are needed

to perform the PRODSERV services: the quality of the internal

competence and skills, experience, know-‐how, technology, internal

relationships, motivation, attitudes, internal resources and activities, and

how these activities are managed, co-‐operated and coordinated.

. Q4. Quality of interaction: Q4 measures the quality of information exchange,

financial exchange and social exchange, etc.

. Q5. Quality of atmosphere: the relationship and interaction process between

the customer-‐company are influenced by the quality of the atmosphere in

a specific environment where they operate. The atmosphere indicators

should be considered very critical and important because of the belief

that lack of frankly and friendly atmosphere explains poor quality and

less loyalty.

The five quality dimensions summarize to a total quality (TQ) that in hand

influence the perception of satisfaction and loyalty, see figure 1 below (Zineldin,

2006a).

50

When the model is empirical tested with suitable quality factors, depending on

the nature of the study, the result will provide a vision of what the customer

value as the most important qualities (Zineldin, 2006b; Zineldin, 2011; Zineldin

et al., 2011). Also, providing the management with an understanding how quality

problems occurs and how they can be improved (Zineldin, 2006a). By just doing

one 5Qs model testing the result will be very short sighted, as a long-‐term

solution needs tests over time and more detailed testing (Zineldin, 2011;

Zineldin et al., 2011).

Piskar & Faganel (2009) argue that the 5Qs model can be used in order to

measure customer satisfaction and customer loyalty. Further, meaning that the

connection between marketing strategy, quality and loyalty might lead to

increased competitive advantage, also supported by De Jager et al. (2010); Tu

(2009). Piskar & Faganel (2009) conclude that satisfied customers do not

necessary need to be loyal customers, as they can both repeat orders and buy

from competitors. De Jager et al. (2010) and Tu (2009) argue that the 5Qs model

emphasize that quality are used as the key aspect to survive and gain a

competitive advantage by establishing long-‐term relationships.

Figure 1 5Qs model Zineldin, 2006a, pp. 433

51

4. Empirical investigation

4.1 The FMCG market in Sweden The FMCG market is one of the largest in Sweden. The total sales of food and

beverages were in 2010 amounted to 221 billion SEK (www.scb.se; www.li.se; Kf

Göta, Annual Report, 2011; Ica, Annual Report, 2011). In 2011 had the total food

and beverages consumption increased and was amounted to 274 billion SEK.

This represents a growth of 1,3% for 2011. This compares with 2010 when the

market growth also was weak and ended at 1,7%. A major factor to the poor

growth is the economic situation prevailing in the world. However, FMCG stores

are relatively insensitive to economic changes and are therefore expected to

develop weak in 2012 (Kf Göta, Annual Report, 2011; Ica, Annual Report, 2011).

The market is constantly increasing and major contributing factors to this are

that the volume of sales increases and the price of goods rise (www.scb.se;

www.li.se). Although the industry is increasing, research shows that a smaller

part of the Swede's income spent on food and beverages. In 1970 the average

Swede consumed 22.5% of their income on food while in 2011 consumption was

only 12.4% (www.li.se). The choices that customers make in a FMCG store are

largely determined by their economy and their expectations of how the world

economy will develop. In bad times, they prioritize food and accommodation as

long as possible (Ica, Annual Report, 2011).

For the Swedish customers, the price is an important factor when he or she

decides to buy a food product. Although the Swedish customer is price conscious,

the customers prioritize also added value products, where products and services

that can save time have high value (Kf Göta, Annual Report, 2011; Ica, Annual

Report, 2011; www.li.se). Since time can be seen as a scarce commodity in

today's world, products and services that save time, makes the life simpler for

the customers. Not having to select and receive tips and advice is something that

more and more people are willing to pay for. An example of this can be finished

shopping bags, buying ready-‐mixed salad or dessert fruit, peeled and diced (Ica,

Annual Report, 2011). The Swedish customer has also become more aware of

how the climate change affects our daily lives and quality of life and health. This

52

means that more customers are willing to change their purchasing behavior to

reduce environmental impact and improve their health. More and more

customers have therefore begun to demand products that are climate-‐smart and

healthy. At the same time has all the available information about food and health

become too much for some individuals. Thus, it has therefore become important

for some individuals to make their purchases from someone they trust (Kf Göta,

Annual Report, 2011; Ica, Annual Report, 2011; www.li.se).

Sweden has a mature FMCG industry that is growing at a relatively slow pace.

The market has many actors and the major actors are Coop, ICA, Willys and City

Gross, where ICA is considered to be the largest (www.greppa.se; www.li.se). For

detailed information about the companies, see appendix 4. Together have these

players 70% of the market. In addition to these retail chains, there are other

players such as Lidl, Netto and niche actors such as food specialists, service

stations and home delivery companies (Ica, Annual Report, 2011; www.ski.se).

Also in Växjö, the empirical investigation shows, that Coop, ICA, Willys and City

Gross are the main actors within the industry, where the FMCG stores

themselves consider ICA as the largest actor. In the FMCG industry is the

competition intense, which can be determined by the pressed food prices. In

2011, however, the competition increased because Netto increased its rate of

establishment, all the players focused on renewal and the increased demand for

finished food shopping bags (Ica, Annual Report, 2011; Kf Göta, Annual Report,

2011; www.li.se).

In 2011, Svenskt Kvalitetsindex (SKI) performed a survey, which measured

customer satisfaction and quality improvement in the FMCH industry. SKI is a

system designed to measure and analyze how Swedish citizens examines the

different actors in different industries. SKI’s survey in 2011 interviewed 6,000

sampled individuals, which evaluated their perception of FMCG stores quality

and their satisfaction on a scale of 1 to 100. The relevant result is presented in

table 1. City Gross had the highest SKI with 74,5 and Willys the lowest with 64,8

(www.ski.se).

53

Table 1 – Shows the result of the SKI survey done in 2011 (www.ski.se).

4.2 Presentation of the FMCG stores perception of the market

4.2.1 Important quality factors To get a picture of Växjö's FMCG market, four selected FMCG stores were

investigated. However, City Gross declined to participate in the study, which

means that only 3 of the sample wanted is included in the study. Representatives

from various positions in the stores helped to create a picture of the market’s

structure and its actors in Växjö. (For detailed information about the companies,

see appendix 4). The empirical investigation showed that the quality factor that

most companies were considered as their best was their product range. The next

best quality factor was their product quality. For the FMCG companies, it is

therefore assumed that they believe that they offer the best Q1. The stores also

felt that they had competence, were good at giving the customers’

responsiveness (willingness to offer good service) and access (the ability to

contact personnel).

4.2.2 Relationships Building relationships is something that is considered to be positive in the FMCG

industry. All the respondents believe that there are advantages to establishing

relationships with their customers. These advantages could be for example that

the stores get regular customers and create loyalty. For a relationship to occur,

74,5 73,4 68,8

64,8

0

10

20

30

40

50

60

70

80

90

100

City Gross ICA Maxi Coop Extra Willys

SKI

SKI

54

between a customer and a company, the FMCG stores consider that the most

important quality factor and building block that needs to be included is

convenience. This means that for a relationship to emerge, the customers must

find it convenient to shop in the store. The FMCG stores also believe that if a

relationship should arise, they should be responsive, and thus have the desire to

offer good service. The price, competence and have goods in stock are also

important quality factors to offer to create a relationship, according to the FMCG

stores.

4.2.3 Customer satisfaction Being satisfied is something that all the investigated FMCG stores believe that

their customers are. On a scale of 1 to 10, with 10 being very satisfied and 1 was

dissatisfied, 26.7% of respondents answered that their customers were 10 on

the scale, which means that they believe that their customers are very satisfied

and that nothing needs to be improved. None of the stores said that their

customers were below 7 on the scale. Most respondents, 33.3% believe that

customers are an 8 on the satisfaction scale. The empirical investigation showed

that the mean value of the FMCG stores perception of customer satisfaction was

8,5.

4.2.4 Loyalty Loyalty is a contested concept and has many different definitions. Within the

FMCG industry, loyalty is strongly linked to how often the customer shop in

different stores. 86% of the respondents mentioned that recurring purchases in

the same store is the definition of loyalty. The FMCG industry is also advocating

that their customers are loyal. On a scale of 1 to 10, where 10 are very loyal and

1 is not loyal, 20% of respondents considered that the customers were 10 on the

scale and thus very loyal. Most respondents in the industry, 33.3% thought that

the customers were loyal, and outlined a 7 on the loyalty scale. None of the

respondents believed that customers were less than 4 on the scale. The empirical

investigation showed that the mean value of customer loyalty was 7,5. In order

to get loyal customers, various stores use different customer loyalty programs. In

Växjö, this is fairly widespread and 53.3% of respondents answers that they

actively use some sort of loyalty program. This may be any type of customer club

or specific offer.

55

4.3 Presentation of the results 2 is a summary, presenting an average ranking of which quality factors the

respondents’ experience, as a total, that the different FMCG stores are best in.

The highest value a quality factor could get was 5 and the lowest value was 0. For

a quality factor to obtain 5 in value, all respondents need to evaluate the quality

factor as the store's best quality. Tablet 2 shows that the respondents perceive

Q1 (quality of object) as the best quality group, with a total average ranking of

3,37. The physical products are perceived as the best quality factor with an

average ranking of 3,66. The quality factor the respondents perceive as the

second most important is price, with an average ranking of 3,54. The three

following factors that the respondents consider to be the stores' best qualities is

range of products which have an average ranking of 3,36, products are up to date

which have an average ranking of 3,25 and products are in stock which have an

average ranking of 3,21. See tablet 2 below.

Tablet 3 is a summary of all the respondents’ average ranking of which quality

factors they perceive as significant when establishing a relationship with a FMCG

store. 5 are the highest value a quality factor can have, while 0 is the lowest. The

tablet shows that the most important quality factor when establishing a

relationship is courtesy, which have an average ranking of 3,53. The second most

important quality factor is the stores’ understanding of the customers needs and

wants, which has an average ranking of 3,42. Further, the table shows that price

with an average rank of 3,41, flexibility with an average rank of 3,12, and

responsiveness with an average rank of 3,11 also important quality factors when

establishing a relationship between customers and a FMCG store. The results

show that Q4 (quality of interaction) is the quality group that is the most

important, which have a total average rank of 3,160. See tablet 3 below.

56

Most important

Average rank Count StdDev

Q1, Quality of object

1. Physical products

1 3,66 119 1,39

2. In stock

5 3,21 43 1,42 3. Products are up to date

4 3,25 32 1,27

4. Range of products

3 3,36 108 1,35 Summary 13,48/4= 3,370 302 5,43

Q2, Quality of process

5. Price

2 3,54 122 1,46

6. Waiting time

2,09 34 0,95 7. Convenience

2,97 62 1,37

8. Product arrangement

2,44 27 1,29 Summary 11,04/4= 2,760 245 5,07

Q3, Quality of infrastructure

9. Experience

3,00 11 0,85

10. Competence, right knowledge and skills 2,74 73 1,25 11. Credibility

2,86 21 1,12

12. Inspire me, test new products

2,56 16 1,22 Summary 11,16/4= 2,790 121 4,44

Q4, Quality of interaction

13. Responsiveness, willingness to offer good service 2,85 26 1,26 14. Access, the ability to contact personnel 2,52 21 1,26 15. Courtesy, treatment of customers

2,93 90 1,40

16. Flexibility

2,09 22 0,90 Summary 10,39/4= 2,598 159 4,82

Q5, Quality of atmosphere

17. Understanding of the customers need and wants 2,49 39 1,36 18. Lightning, in the store

2,00 13 1,18

19. Parking

2,64 69 1,45 20. Accessibility, space in store

2,60 53 1,34

Summary 9,73/4= 2,433 174 5,33

Tablet 2 The stores best quality factors, presented in an average result

57

Most important

Average Rank Count StdDev

Q1, Quality of object


3,02 117 1,38

2. In stock

2,78 32 1,17 3. Products are up to date

2,94 18 1,18


2,73 98 1,34 Summary 11,47/4= 2,868 265 5,07

Q2, Quality of process

5. Price

3 3,41 123 1,51

6. Waiting time

2,35 17 0,84 7. Convenience

2,55 31 1,24


2,46 13 1,22 Summary 10,77/4= 2,693 184 4,81

Q3, Quality of infrastructure

9. Experience

2,71 38 1,32

10. Competence, right knowledge and skills 3,01 103 1,36 11. Credibility

2,18 22 1,23

12. Inspire me, test new products

2,73 15 1,06 Summary 10,63/4= 2,658 178 4,97

Q4, Quality of interaction

13. Responsiveness, willingness to offer good service 5 3,11 82 1,35 14. Access, the ability to contact personnel 2,88 33 1,27 15. Courtesy, treatment of customers

1 3,53 110 1,44

16. Flexibility

4 3,12 17 1,32 Summary 12,64/4= 3,160 242 5,38

Q5, Quality of atmosphere

17. Understanding of the customers need and wants 2 3,42 77 1,48 18. Lightning, in the store

1,33 3 0,47

19. Parking

2,17 23 1,13 20. Accessibility, space in store

2,14 29 1,33

Summary 9,06/4= 2,265 132 4,41

Tablet 3 The respondents desired quality factors behind establishing a long-‐term relationship

58

4.3.1 SPSS frequency

Why membership card

Frequency Percent Valid Percent Cumulative

Percent

Don´t need/want it 26 13,0 13,0 13,0

Don´t know 19 9,5 9,5 22,5

Save money 92 46,0 46,0 68,5

Need it for scanning 2 1,0 1,0 69,5

Possible to use it as a

bank/credit card 13 6,5 6,5 76,0

Habit 8 4,0 4,0 80,0

To receive magazine,

recipes and offers 5 2,5 2,5 82,5

Other family member has

the card/cards 7 3,5 3,5 86,0

Too much trouble 21 10,5 10,5 96,5

Don´t want to be tied to one

store 3 1,5 1,5 98,0

The offers individualize after

purchases 4 2,0 2,0 100,0

Total 200 100,0 100,0 Tablet 4 shows that the most respondent has membership cards in order to save

money, either by gaining loyalty point or in order to access discounts. Followed

by 13% that does not need or want membership cards and 10,5% think that it is

too much trouble to have them.

Tablet 4 Frequency of why the respondent has membership cards

59

Tablet 5 shows that 43.5% want to save money as goal when establishing

relationships with a store. Followed by receive better treatment 21% and do not

know at 18,5 as the three largest represented answers.

Reason to establish relationships

Frequency Percent Valid Percent Cumulative

Percent

No 18 9,0 9,0 9,0

Yes 7 3,5 3,5 12,5

Save money 87 43,5 43,5 56,0

Receives better treatment 42 21,0 21,0 77,0

Receives magazines,

recipes and offers 2 1,0 1,0 78,0

Possible to use it as a

bank/credit card 2 1,0 1,0 79,0

Scanning 3 1,5 1,5 80,5

Don´t know 37 18,5 18,5 99,0

The offers individualize after

purchases 2 1,0 1,0 100,0

Total 200 100,0 100,0

Tablet 5 Frequency of what the respondents want to gain by establishing a long-‐term relationship

60

Chart 1 Satisfaction

Chart 1 shows the respondents value of their satisfaction on a scale from 1-‐10. 23,5% gave an 8 on the scale. The respondents average satisfaction rate was 7,3.

Chart 2 Loyalty

Chart 2 shows the respondents value of their loyalty on a scale of 1-‐10. 14,5% said that they were not loyal. The respondents average loyalty rate was 5,7.

61

4.3.2 SPSS tests

Correlations

SPSS test 1 shows no correlation between distance and loyalty as the grey

marked number measures -‐0,04 in the Spearman´s rho test. Although, there is

small tendency that respondents’ that lives farther away from the store is less

loyal.

Correlations

Distance LoyaltyYes/NO Spearman's rho Distance Correlation Coefficient 1,000 -,061

Sig. (2-tailed) . ,390

N 200 200

LoyaltyYes/NO Correlation Coefficient -,061 1,000

Sig. (2-tailed) ,390 .

N 200 200

SPSS test 2 shows no correlation between distance and loyalty as the grey marked

number measures -0,061 in the Spearman´s rho test.

Distance Loyalty

Spearman´s rho

Distance Correlation Coefficient 1,000 -,040 Sig. (2-tailed) . ,577 N 200 200

Loyalty Correlation Coefficient -,040 1,000 Sig. (2-tailed) ,577 . N 200 200

SPSS test 1 Distance * Loyalty (1-‐10 scale)

SPSS test 2 Distance * Loyalty (Yes or No)

62

Satisfaction * Distance Crosstabulation

Count

Distance

Total 0-1 km 2-3 km 4-5 km 6-7 km 8- km

Satisfaction Not satisfied 0 1 1 1 0 3

2 1 0 0 0 0 1

3 0 2 0 3 5 10

4 0 1 1 3 3 8

5 1 2 2 1 5 11

6 5 4 3 4 6 22

7 8 10 11 6 6 41

8 4 14 8 11 10 47

9 7 7 8 8 6 36

Very satisfied 4 4 1 2 10 21

Total 30 45 35 39 51 200

Chi-Square Tests

Value df

Asymp. Sig. (2-

sided)

Pearson Chi-Square 39,279a 36 ,325

Likelihood Ratio 42,315 36 ,217

Linear-by-Linear

Association

1,325 1 ,250

N of Valid Cases 200 a. 33 cells (66,0%) have expected count less than 5. The minimum

expected count is ,15.

SPSS test 3 shows no correlation between distance and satisfaction, at the 99%

level, as the grey marked number is lager than 0,01.

SPSS test 3 Distance * Satisfaction (1-‐10 scale)

63

Correlations

Distance

SatisfactionYes/

No

Spearman's rho Distance Correlation Coefficient 1,000 -,172*


N 200 200

SatisfactionYes/No Correlation Coefficient -,172* 1,000


N 200 200

*. Correlation is significant at the 0.05 level (2-tailed). SPSS test 4 shows a low negative correlation, at the 95% level, between distance

and satisfaction, as the grey marked number measures -‐0,172 on the Spearman´s

rho test.

Correlations

Visiting

frequency Loyalty

Spearman's rho Visiting frequency Correlation Coefficient 1,000 ,292**


N 200 200

Loyalty Correlation Coefficient ,292** 1,000


N 200 200

**. Correlation is significant at the 0.01 level (2-tailed). SPSS test 5 shows a small correlation between visiting frequency and loyalty, at

the 99% level, as the grey marked number measures 0,292 in the Spearman´s

rho test.

SPSS test 4 Distance * Satisfaction (Yes or No)

SPSS test 5 Visiting frequence * Loyalty (1-‐10 scale)

64

Correlations

Visiting

frequency LoyaltyYes/NO



N 200 200

LoyaltyYes/NO Correlation Coefficient ,293** 1,000


N 200 200

**. Correlation is significant at the 0.01 level (2-tailed).

SPSS test 6 shows a small correlation between visiting frequency, at the 99%

level, as the grey marked number measures 0,293 in the Spearman´s rho test.

Correlations

Visiting

frequency Satisfaction



N 200 200

Satisfaction Correlation Coefficient ,249** 1,000


N 200 200


SPSS test 7 shows a small correlation, at the 99% level, as the grey marked

number measures 0,249 in the Spearman´s rho test.

SPSS test 6 Visiting frequency * Satisfaction (Yes or No)

SPSS test 7 Visiting frequency * Satisfaction (1-‐10 scale)

65

Correlations

Visiting

frequency

SatisfactionYes/

No

Spearman's rho Visiting frequency Correlation Coefficient 1,000 ,069


N 200 200

SatisfactionYes/No Correlation Coefficient ,069 1,000


N 200 200

SPSS test 8 shows no correlation between visiting frequency and satisfaction, as

the grey marked number measures 0,069 in the Spearman´s rho test.

Loyalty * Membership Card Crosstabulation

Count

Membership Card

Total No OneCard More than one

Loyalty Not loyal 12 13 4 29

2 6 5 2 13

3 9 6 2 17

4 9 6 2 17

5 2 5 7 14

6 10 1 3 14

7 5 8 11 24

8 6 8 9 23

9 5 15 5 25

Very loyal 5 15 4 24

Total 69 82 49 200

Chi-Square Tests

Value df

Asymp. Sig. (2-

sided)



Linear-by-Linear

Association

7,155 1 ,007

N of Valid Cases 200

SPSS test 8 Visiting frequency * Satisfaction (Yes or No)

SPSS test 9 Membership Card * Loyalty (1-‐10 scale)

66

Chi-Square Tests

Value df

Asymp. Sig. (2-

sided)



Linear-by-Linear

Association

7,155 1 ,007


expected count is 3,19.

SPSS test 9 shows correlation, at the 99%level, between membership card and loyalty as the grey marked number is below 0,01.

Correlations

One Card Loyalty

Spearman's rho One Card Correlation Coefficient 1,000 ,124


N 200 200

Loyalty Correlation Coefficient ,124 1,000


N 200 200

SPSS test 10 shows no correlation between one membership card and loyalty, as

the grey marked number measures 0,124 in the Spearman´s rho test.

LoyaltyYes/NO * Membership Card Crosstabulation

Count

Membership Card


LoyaltyYes/NO No 38 35 17 90

Yes 31 47 32 110

Total 69 82 49 200

SPSS test 10 One Membership Card * Loyalty (1-‐10 scale)

SPSS test 11 Membership Card * Loyalty (Yes or NO)

67

Chi-Square Tests

Value df

Asymp. Sig. (2-

sided)



Linear-by-Linear

Association

4,991 1 ,025

N of Valid Cases 200 a. 0 cells (,0%) have expected count less than 5. The minimum

expected count is 22,05. SPSS test 11 shows no correlation between membership card and loyalty, as the

grey marked numbere is higher than 0,01.

LoyaltyYes/NO * One Membership Card Crosstabulation

Count

One Card

Total Other OneCard

LoyaltyYes/NO No 55 35 90

Yes 63 47 110

Total 118 82 200

Symmetric Measures

Value Approx. Sig.

Nominal by Nominal Phi ,039 ,583

Cramer's V ,039 ,583


SPSS test 12 shows no correlation between one membership card and loyalty, as

the grey marked number measures 0,039 in the Phi test.

SPSS test 12 One Membership Card * Satisfaction (Yes or No)

68

Satisfaction * Membership Card Crosstabulation

Count

Membership Card


Satisfaction Not satisfied 2 0 1 3

2 0 1 0 1

3 5 4 1 10

4 1 5 2 8

5 3 5 3 11

6 11 8 3 22

7 14 14 13 41

8 20 13 14 47

9 7 18 11 36

Very satisfied 6 14 1 21

Total 69 82 49 200

Chi-Square Tests

Value df

Asymp. Sig. (2-

sided)



Linear-by-Linear

Association

,784 1 ,376


expected count is ,25.

SPSS test 13 shows no correlation between membership card and satisfaction, as

the grey marked number is higher than 0,01.

SPSS test 13 Membership Card * Satisfaction (1-‐10 scale)

69

Correlations

One Card Satisfaction

Spearman's rho One Card Correlation Coefficient 1,000 ,104


N 200 200

Satisfaction Correlation Coefficient ,104 1,000


N 200 200

SPSS test 14 shows no correlation between one membership card and

satisfaction, as the grey marked number measures 0,104 in the Spearman´s rho

test.

SatisfactionYes/No * Membership Card Crosstabulation

Count

Membership Card


SatisfactionYes/No No 11 15 7 33

Yes 58 67 42 167

Total 69 82 49 200

Chi-Square Tests

Value df

Asymp. Sig. (2-

sided)

Pearson Chi-Square ,381a 2 ,826

Likelihood Ratio ,383 2 ,826

Linear-by-Linear

Association

,031 1 ,861


expected count is 8,09.

SPSS test 15 shows no correlation between membership card and satisfaction, as

the grey marked number is higher than 0,01.

SPSS test 14 One Membership Card * Satisfaction (1-‐10 scale)

SPSS test 15 Membership Card * Satisfaction (Yes or No)

70

SatisfactionYes/No * One Card Crosstabulation

Count

One Card

Total Other OneCard

SatisfactionYes/No No 18 15 33

Yes 100 67 167

Total 118 82 200

Symmetric Measures

Value Approx. Sig.

Nominal by Nominal Phi -,040 ,569



SPSS test 15 shows no correlation between one membership card and

satisfaction, as the grey marked number measures -‐0,04 in the Phi test. Although,

there is a small tendency that respondents with one membership card is lass

satisfied.

Correlations

Satisfaction Loyalty

Spearman's rho Satisfaction Correlation Coefficient 1,000 ,587**


N 200 200

Loyalty Correlation Coefficient ,587** 1,000


N 200 200


SPSS test 16 shows a moderate correlation, at the 99% level, between

satisfaction and loyalty as the grey marked number measures 0,587 in the

Spearman´s rho test.

SPSS test 15 One Membership Card * Satisfaction (Yes or No)

SPSS test 16 Satisfaction * Loyalty (1-‐10 scale)

71

Correlations

Satisfaction LoyaltyYes/NO

Spearman's rho Satisfaction Correlation Coefficient 1,000 ,472**


N 200 200



N 200 200





Correlations

Loyalty

SatisfactionYes/

No

Spearman's rho Loyalty Correlation Coefficient 1,000 ,419**


N 200 200

SatisfactionYes/No Correlation Coefficient ,419** 1,000


N 200 200





SPSS test 17 Satisfaction (1-‐10 scale) * Loyalty (Yes or No)

SPSS test 18 Satisfaction (Yes or No) * Loyalty (1-‐10 scale)

72

SatisfactionYes/No * LoyaltyYes/NO Crosstabulation

Count

LoyaltyYes/NO

Total No Yes


Yes 62 105 167

Total 90 110 200

Symmetric Measures

Value Approx. Sig.



N of Valid Cases 200 SPSS test 19 shows a moderate correlation, at the 99% level, between



Summary of the other SPSS tests, see appendix 4 for full presentation.

Vaiable 1 Variable type Variable 2 Test Result Correlation

Loyalty 1-‐10 Scale Gender Spearman´s Rho 0,02 No Loyalty Yes or No Gender Phi 0,38 No Loyalty 1-‐10 Scale Age Spearman´s Rho 0,398 Low Loyalty Yes or No Age Spearman´s Rho 0,324 Low Loyalty 1-‐10 Scale Education Chi-‐Square 0,111 No Loyalty Yes or No Education Chi-‐Square 0,062 No Satisfacion 1-‐10 Scale Gender Spearman´s Rho 0,075 No Satisfacion Yes or No Gender Phi 0,072 No Satisfacion 1-‐10 Scale Age Chi-‐Square 0,083 No Satisfacion Yes or No Age Spearman´s Rho 0,04 No Satisfacion 1-‐10 Scale Education Chi-‐Square 0,107 No Satisfacion Yes or No Education Chi-‐Square 0,302 No

SPSS test 19 Satisfaction * Loyalty (Yes or No)

73

5. Analysis How effective is RM in the FMCG market, in the sense of creating customer

satisfaction and customer loyalty?

Álvarez et al. (2011) state that RM is an efficient marketing strategy to gain

competitive advantage, by enhancing long-‐term relationships. By reviewing the

existing RM theories, all the authors claim that RM is used as a management tool

in order to create long-‐term customer relationships. Anderson et al. (2007)

conclude in their research that improving overall marketing effectiveness

through customer loyalty was the main reason for companies to implement RM

tools. Further, Prasad & Aryasri (2008a; 2008b) state that the FMCG industry has

been characterized by transactional marketing but has now embraced RM. The

empirical investigation showed that the Swedish FMCG customers are price

conscious and appreciate various time saving aspects. Further, Morgan & Hunt

(1994) found that customers engage in relationship to save money and time but

also due to convenience and companionship. The investigated FMCG stores

thought that their customers perceive convenience as an important aspect when

establishing a relationship, but it was not shared with the customers. In tests

between distance (a convenient factor) and satisfaction and loyalty the authors

did find a very small correlation. However, the small correlation that was found

was negative which means that the further away the customer lives from the

store, the less satisfied and loyal is the customer. No or very weak correlation

were also found between the other demographic variables and satisfaction and

loyalty.

The empirical investigation found that 43,5% of the customers’ only reasons to

establish a relationship was to save money. Egan (2000) and Chien & Mautinho

(2000) mean that customers can perceive a high rate of satisfaction by chasing

different FMCG companies discount offers. Dick & Basu (1994) and Jensen &

Hansen (2006) argue that this is not true loyalty since the customers will only do

repeated purchases, as long as the store is the cheapest. Customer loyalty can

also be described in terms of previous purchasing behavior. Although, Uncles et

al. (2003) and Bowen & Chen (2001) mean that this is the most controversial

perspective on customer loyalty, but is the most supported by empirical data.

74

Jensen & Hansen (2006) mean that true loyalty is when the customer embraces a

positive attitude towards the brand and do repeated purchases. However, the

critics mean that this is not applicable when it comes to low-‐risk purchases, as

people do not have strong attitudes towards this type of products. Although, the

empirical investigation showed that 21% of the respondents mean that the goal

for establishing a relationship with a FMCG store is to receive better treatment

(which is a tool for companies to create better attitudes) and Jain & Gupta (2004)

mean that a higher degree of service quality can improve this notion and

increase the customer satisfaction rate.

Palmatier et al. (2006) state that it can be difficult to evaluate customer loyalty

since even a low degree of loyalty can lead to a high visiting frequency. From the

customers point of view this can be due to lack of interest and time. Jensen &

Hansen (2006) argue that previous purchasing behavior can indicate loyalty, but

does not give an understanding why loyalty exists. The theory means that it can

be better to build barriers rather than relationships in this type of situation,

which also the empirical investigation indicates in the FMCG market. By this the

authors mean that it can be more effective to increase the customer switching

cost since the customers are not particularly loyal.

The empirical investigation showed that the customers average loyalty rate was

5,7 (on a scale from 1-‐10), while the stores rank their customer as 7,5. The study

also found that the average satisfaction rate was 7,3, which correspond relatively

well with SKI’s larger survey with 6,000 respondents where the satisfaction rate

was between 64,8 -‐ 74,5 (on a scale from 1-‐100). By investigating the FMCG

stores perception of their customers’ satisfaction rate, the authors found that

stores believe that the customers are more satisfied than they really are with an

average ranking of 8,5. Since the FMCG stores perceive their customers as more

loyal and satisfied than they really are, they may not be able to get the wanted

results from their RM strategy. If the FMCG stores value their customers’ loyalty

and satisfaction level more than it really is, the theories mean that they do not

obtain the full advantage of their RM strategy, hence lowering the effectiveness

of the RM strategy.

75

The theory also claims that it can be hard to evaluate RM strategies effectiveness

when it comes to social interaction, since two selling persons can generate two

total different reactions from one customer. Meanwhile the empirical finding

showed that customers value courtesy, a form of service quality, as the most

important aspect when establishing relationships and gave the FMCG stores a

rating of 2,93. Anderson et al. (2007) has found that when the companies’

knowledge about customers increases, the customers’ satisfaction increases as

well. Prasad & Aryasri (2008a) and Sun & Lin (2010) explain that if the

companies do not know their customers and the customers’ perception of the

company, then they do not have the acquirements to develop effective RM

strategies. The RM strategy will therefore not lead to the desired result and

goals. Venetis & Ghauri (2004) argue that high service quality can help a

company to gain loyal customers and attract new ones, if, according to Desai

(2011) the company understands the customers needs and wants. The empirical

findings present that the customers perceives that the companies understanding

for the customers needs and wants, is an average of 2,49 on a scale of 1-‐5. Since

the companies only have a moderate understanding for the customers needs and

wants, the theory indicates that this can be a reason for the customers low

loyalty ranking. Further, as the customers do not value themselves as

particularly loyal, Palmatier et al. (2006) means that they are not willing to

invest their own time and effort in order to maintain it.

Babakus et al., (2004) mean that in order to satisfy customers, it is important to

offer good total quality. The empirical investigation found that the respondents

are quite satisfied, therefore, Anderson et al. (1994) implies that companies’ can

benefit from decreased price elasticity, increased customer loyalty, decreased

transaction costs and improved reputation of the company. But, the empirical

investigation showed trends that low prices causes low quality expectations and

can therefore generate a high satisfaction rate, even though the total quality rank

is low. Therefore, the FMCG will not reap the benefits that Anderson et al. (1994)

mentions as the customers will follow the lowest offered price. Chang et al.

(2009) and Zeithaml (1988) argue that there is a strong relationship between

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customer satisfaction and customer loyalty where the ability to retain and create

repurchases is strongly connected to the customer satisfaction rate. Although, in

this research the authors only find a moderate correlation between satisfaction

and loyalty when the respondents answered on a scale from 1-‐10, but a much

lower correlation when the answers were divided into yes or no categories. The

theory suggests that if the customers are not satisfied enough they are more

susceptible to switch FMCG store. Further, both Chang et al. (2009) and Bloemer

& Kasper (1995) has found that customer satisfaction does not automatically

lead to customer loyalty.

The research also found evidence that satisfaction does not automatically lead to

loyalty, as there was a moderate correlation between customer satisfaction and

loyalty, but not a high a loyalty rate

A very commonly held notion in the RM school is that it is more cost efficient to

retain current customers than attract new ones. Although, this is questionable in

this research since the customers have shown tendencies to be quite self-‐

centered as they mostly chase the discount – no matter who provides it. This

disproves Uncles et al. (2003) assumption about RM activities, since the authors

mean that effective RM activities prevent customer seeking other alternatives

and create long-‐term relationship. Customer satisfaction theories (Anderson et

al., 1994; Chang et al., 2009; Giese & Cote, 2000) discuss a cumulative customer

satisfaction, which implies that satisfaction is an overall experience and

evaluation of services and products over time. Thereby, visiting frequency can be

an explaining factor to satisfaction rate. However, the correlation was quite weak

between visiting frequency and satisfaction, which might be due to the notion

that the customers was not particularly loyal and that the question was

formulated as how often the customer visits their main grocery store.

Palmatier et al. (2006) discovered that RM strategies only enhance specific parts

of a relationship, meaning that it individually enhance or affect the classic

relationship mediators such as commitment, trust, satisfaction and loyalty. By

this Palmatier et al. (2006) mean that it can be hard to assess the total

77

effectiveness of the RM strategy. Palmatier et al. (2006) further argue that

companies invest in building relationship in order to reap higher profitability

and market shares. This correlates with what the FMCG companies want to

achieve with RM strategies, since the companies want to create satisfied and

loyal customers but also higher profitability. By loyal customers the FMCG

stores mean that the customers frequently do their purchases in one store. A

quite interesting fact found in the research was that the customers did not found

themselves as particularly loyal but their visit frequency rate to their main FMCG

store was quite high since 81,5% of the customers visited their main FMCG store

3-‐5 times per month or often. Chang et al. (2009) inter alia, mean that a high

visiting frequency is a result of customer satisfaction and a common definition of

customer loyalty.

Customer loyalty program is a RM activity that can be used to create effective

long-‐term relationships. By offering membership cards or specific membership

offers, the FMCG stores want to create loyal customers. Membership card was

found as an explaining variable to where the respondents were ranked on the

loyalty scale. Although, there was no correlation found between the respondents

with just one membership card and loyalty, which the customer loyalty program

theory means should exist. Whyte (2004) argues that membership cards is just a

temporary form of loyalty. In this research, the main attitudes towards

membership card were to save money, do not need or want it and are too much

trouble. This means that the customers are relatively negative towards

membership cards. However, 41% of the respondents have a membership card

in one store and 24,5% has a membership card in several stores. Rowley (2007)

means that this strategy is quite ineffective as the customers only infrequently

utilize the customer loyalty activities. Whyte (2004) argues that loyalty

programs may only affect individuals purchasing behavior and does not create

any deeper feelings toward the company.

Customer loyalty program can increase the company’s profitability, by increasing

the customers’ consumption in the existing pattern by offering other products

and services. Uncles et al. (2003) state that this is done through rewarding loyal

78

customer with promotions and bonus points. This aspect was often mentioned in

the empirical investigation as a way for the customers to save money. The theory

means that customer satisfaction can be created through special offers to save

money, however, the empirical investigation shows that there is no correlation

between membership cards and the satisfaction rate. This can be seen as

questionable, since the results of the study showed that there is a correlation

between membership card and loyalty but only a moderate correlation between

loyalty and satisfaction.

What quality factors are critical, according to the 5Qs model, when


The quality theories state that product and service qualities are critical

competition factors, as the customers demand better total quality. To deliver the

right quality to the customers has therefore become more important since it may

affect both loyalty and satisfaction. Babakus et al. (2004) therefore mean that the

companies’ quality level may increase the companies’ turnover. However, to

deliver the right quality can be a difficult task, as it can mean many different

things depending on the context.

When investigating the customers’ perception of the FMCG stores five best

qualities out of twenty, the empirical investigation showed that the respondents’

value typical product quality factors based on the 5Qs model. Figure 2 below

illustrates the respondents perception of the FMCG stores qualities, based on the

5Q model. The empirical investigation presented that the four of the highest

ranked qualities are within Q1, which is the quality of object. The 5Qs model

defines Q1 as the technical quality, what the customer receives. Physical products

were ranked as the FMCG stores best quality factor. Range of products was seen

as the third best quality, which the companies assessed as third best quality. This

might imply that product range can be seen as a critical quality factor within the

FMCG industry. Desai (2011) argues that the assessment of the product quality is

influenced by the price of the product. This might explain why the research

found that price was rated as the FMCG stores second best quality. The FMCG

stores also valued Q1 as their best quality group.

79

Van Kemende et al. (2008) sates that there are a lot of different opinions about

how product quality is created and valued. The empirical investigation shows

tendencies that when the customers estimate the various quality factors, they

are prone to evaluate more physical and personal perceived aspects such as

physical products, products in-‐stock, products are up to date, range of products,

price, convenience and courtesy. This might be the reason for the total high

average rank in Q1 and Q2. Although, responsiveness gets a relatively high rank

which contradicts this findings.

Desai (2011) means that a company must be able to adapt their resources to the

customers’ preferences. According to Jain & Gupta (2004), Parasuraman et al.

(1985) and Grönroos (1984) is the difference product and service quality. This

might be the reason why the customers evaluate various quality factors

differently when it comes to assessing important quality factors when

Figure 2 -‐5Qs model Results for the customers’ average ranking of store qualities, satisfaction and loyalty

* Calculation: 7,3/2 = 3,65 In order to better compare TQ against satisfaction ** Calculation: 5.7/2= 2,85 In order to better compare TQ against loyalty.

Q1 Tot. average

rank 3,370

Q3 Tot. average

rank 2,790

Q2 Tot. average

rank 2,760

Q4 Tot. average

rank 2,598

Q5 Tot. average

rank 2,433

F(Q1-‐Q5) Total quality Tot. Average

rank 2,790

Long-‐term relationship

Average loyalty rating: 2,85**

Average satisfaction rating: 3,65*

Five top ranked qualities: 1) Physical products 3,66 2) Price 3,54 3) Range of products 3,36 4) Up to date 3,25 5) In stock 3,21 6)

80

establishing a long-‐term relationship. In contrary to figure 2, figure 3 below

shows that Q4, quality of interaction, is seen as the most important quality group

when establishing a long-‐term relationship between customers and FMCG stores.

The focus has shifted from product quality to service quality since the customers

do not value or rank any of the individual quality factors in Q1 as the five most

important. Instead, courtesy receives the highest rank followed by the customers’

needs and wants, however this quality factor is grouped in Q5, quality of

atmosphere. Jain & Gupta (2004) mean that it is more complex to offer the right

service quality, as it is more difficult to understand the customers service

preferences and needs. The service quality theory means on the other hand that

when an individual are purchasing a product it is easier to grasp the customers

needs and wants than the customers service preferences, since it can evaluate

physical aspects such as color, style, hardness, label feel and package.

Q1 Tot. average

rank 2,868

Q3 Tot.

average rank 2,658

Q2 Tot.

average rank 2,693

Q4 Tot.

average rank 3,160

Q5 Tot.

average rank 2,265

F(Q1-‐Q5) Total quality

Tot. Average rank 2,729

Average loyalty rating: 2,85**

Average satisfaction rating: 3,65*

Long-‐term relationship

Figure 3 -‐ 5Qs model Result for the customers’ average rate for important relationship qualities

* Calculation: 7,3/2 = 3,65 In order to better compare TQ against satisfaction ** Calculation: 5.7/2= 2,85 In order to better compare TQ against loyalty.

Five top ranked qualities: 1) Courtesy 3,53 2) Needs and wants 3,42 3) Price 3,41 4) Flexibility 3,12 5) Responsiveness 3,11 7)

81

Thamaraiselvan & Raja (2008) state that the FMCG market is constantly

changing, which is supported by the empirical investigation. The stores within

the FMCG market thereby have to offer high product and service quality in order

to be competitive. Within the FMCG market, Thamaraiselvan & Raja (2008) and

Matsa (2011) argue that it is not the physical product that is the main offer

instead it is the shopping experience. Zineldin (1995; 2005) defined this

phenomenon PRODSERV, which means that a product is in most cases combined

with services. This is something that the empirical research has shown aligns

very well within the FMCG market. This is due to that the customers’ both value

the physical aspects when they value the stores best qualities, but also demand

service qualities when they evaluate what they want from a long-‐term

relationship with a FMCG store. Instead of focusing on offering either a high

product or service quality, Zineldin (2005) means that a company can build loyal

and attract new customers by offering a high PRODSERV quality.

In order to create long-‐term relationship, the empirical investigation shows

tendencies that the respondents perceive themselves as quite satisfied but not

particular loyal. This might be due to the fairly low rank of total quality in figure

2, although it seems as a high rank in a couple of individual quality factors

provides satisfaction but a minor degree of loyalty. This might be due to that

loyalty is more affected by the total quality than individual quality factors. The

empirical investigation has also showed that there is a moderate correlation

between satisfaction and loyalty, which support the fact that this might be true.

The theory states that long-‐term relationships are based both on satisfaction and

loyalty. Furthermore, theory also argues that both satisfaction and loyalty are

influenced by service and product quality (PRODSERV), which proves that

satisfaction and loyalty is influenced by quality. But, is there are really a

connection between satisfaction and loyalty?

82

6 Conclusion How effective is RM in the FMCG market, in the sense of creating customer

satisfaction and customer loyalty?

In this study the authors have found that RM, as the current theory present it,

does not provide any effective strategies to create customer satisfaction and

loyalty within the FMCG market. The relatively high satisfaction rate is not

achieved through RM activities, but instead a result of how low prices decreases

the customers’ expectations on the stores total quality. The authors base this

argument on the findings of a relatively high satisfaction rate even though the

total quality was low. The research also found evidence that satisfaction does not

automatically lead to loyalty, as there was a moderate correlation between

customer satisfaction and loyalty, but not a high a loyalty rate. Other authors

have also found this result earlier.

RM does not create loyalty, which also indicates that RM is not effective within

the FMCG market. The research has found that price is a ruling factor that makes

the customer chase discounts, no matter who provides it. The authors believe

that loyalty cannot be created in the FMCG market since the price is such an

important factor for the customers. The result indicates a tendency for the

companies to overestimate the customer satisfaction and loyalty rate, which

might decrease the RM strategies effectiveness. Typical customer loyalty factors

such as visiting frequency and membership card did not imply a tendency

towards loyalty. Since the study shows that low price equals loyalty within the

FMCG market and the customers’ reason to have membership card is to save

money, the gist implies that when one customer possess only one membership

card, they should be loyal. However, this is not the case as the customer is loyal

to the price, even tough they posses a membership card or not.

This study has found that the companies within the FMCG market need to

implement new more effective RM strategies in order to assure the possibility to

reap the benefits from satisfied and loyal customers. Therefore, the authors raise

the question if price is the new customer loyalty program within the FMCG

market?

83

What quality factors are critical, according to the 5Qs model, when


This research, as other authors, has found that quality is an important factor to

investigate within the FMCG market since it affects both satisfaction and loyalty.

However, the authors did only find a moderate correlation between satisfaction

and loyalty. The study has showed that a high satisfaction rate can be achieved

through high ranked individual quality factors, but this does not automatically

lead to loyalty. To achieve high loyalty, the authors imply that the FMCG stores

need to focus on offering a high total quality.

Within the FMCG market it can be difficult to deliver the right quality, as the

companies need to adapt after the customers preferences. It does not make it

easier to deliver the right quality, since there is also a difference between

product and service qualities. The research has found that when the customers

evaluate the FMCG store best qualities, they tend to evaluate typical physical

quality factors. There is a clear focus shift between what the customers evaluate

within the store and what they want to receive from a long-‐term relationship.

The 5Qs model shows that the customers want to obtain service qualities when

generating a long-‐term relationship, instead of physical qualities.

In order to be able to offer the customers a high total quality, the authors state

that the FMCG stores need to implement a PRODSERV perspective since physical

products is often combined with a service. Since the customers assess physical

quality factors when evaluating the stores best qualities and demand service

qualities when establishing a long-‐term relationship, this research has found that

the following quality factors, presented in figure 4 below, are critical in order to

generate a long-‐term relationship.

1. Courtesy, Q4 2. Needs and wants, Q5 3. Price, Q2 4. Flexibility, Q4 5. Responsiveness, Q4

1. Physical products, Q1 2. Price, Q2 3. Range of products, Q1 4. Up to date, Q1 5. In stock, Q1

Service quality factors Product quality factors

= PRODSERV

Figure 4 Product quality factors + service quality factors = PRODSERV

+

84

Further research The authors has found some other aspects that can be interesting to look deeper

into, in order to get a wider understanding behind RM within the FMCG market.

The research has only viewed aspects that affect the whole market, therefore, it

could be an empirical and theoretical addition to see if the result would be

different if the FMCG stores where analyzed individually. Palmatier et al. (2006)

argues that RM strategies only enhance specific RM mediators, the authors

wonder if the same thing can be applied onto quality factors. Can specific quality

factors enhance specific RM mediators?

Price was found as the most, individual, influential factor for loyalty within the

FMCG market. The authors therefor raise the question is price is the new loyalty

program within the FMCG market? This notion need some more research in

order to see how influential price is in this market.

85

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http://www.coop.se/MedMera-‐kortet/Medlemsaterbaring/ Accessed 2012-‐05-‐12

http://www.greppa.nu/download/18.38399aa01201e3858508000219/Marknaden.+ppt.pdf Accessed 2012-‐05-‐17

https://www.ica.se/Mina-‐sidor/Mina-‐formaner-‐med-‐ICA-‐Kort/ Accessed 2012-‐05-‐17 http://www.li.se/branschfakta Accessed 2012-‐05-‐17 http://www.raosoft.com/samplesize.html Accessed 2012-‐05-‐12

http://www.scb.se/Pages/TableAndChart____159277.aspx Accessed 2012-‐05-‐13 http://www.scb.se/Pages/PressRelease____321194.aspx Accessed 2012-‐05-‐17

SKI investigation from 2011 (www.ski.se): http://feed.ne.cision.com/wpyfs/00/00/00/00/00/17/55/BC/wkr0001.pdf Accessed 2012-‐05-‐17

http://www.willys.se/Om-‐Willys/Valkommen-‐till-‐Willys/ Accessed 2012-‐05-‐12

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Appendix 1 -‐ Questionnaire with the Customers 1. Gender: Male Female

2. Age: 18 -‐ 25 26 -‐ 35 36 -‐ 45 46 -‐ 55 56 -‐ 65 66 -‐

3. Education:

High school

College

University

Distance to 0 -‐ 1 km 2 -‐ 3 km 4 -‐ 5 km 6 -‐ 7 km 8 -‐ km

store:

1. Which five qualities are this store´s best qualities? (Rate from 1 – 5) Quality of object, Q1

Quality of process, Q2


5. Price 2. In stock

6. Waiting time

3. Products are up to date

7. Convenience 4. Range of products


Quality of infrastructure, Q3 Quality of interaction, Q4

9.Experience

13. Responsiveness, willingness to offer good service 10. Competence, right knowledge and skills 14. Access, the ability to contact personnel

11. Credibility

15. Courtesy, treatment of customers 12. Inspire me, test new products 16.Flexibility

Quality of atmosphere, Q5

17. Understanding of the customers need and wants 18.Lightning

19. Parking 20. Accessibility, space in store

2. Which five qualities are the most important when establishing a relationship to a grocery

store? (Rate from 1-‐5) Quality of object, Q1




6. Waiting time





9.Experience


11. Credibility

15. Courtesy, treatment of customers 12. Inspire me, test new products 16.Flexibility


17. Understanding of the customers need and wants

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18.Lightning 19. Parking 20. Accessibility, space in store

3. Does this store satisfy you as a customer?

Not satisfied

Very satisfied

1 2 3 4 5 6 7 8 9 10

4. Would you consider yourself as a loyal customer, to this store?

Not loyal Very loyal

1 2 3 4 5 6 7 8 9 10

5. How much of your grocery shopping (money in %) do you do in the different grocery stores?

ICA_________________ Willys_______________ Coop Forum________________

City Gross____________ Other_______________

6. How often do you visit your main grocery store?

0 -‐ 2 / month

3 -‐ 5 / month

6 -‐8 / month

9 -‐ / month

7a. Do you have some kind of grocery -‐ membership card/bonus card?

Yes, in more than one store Yes, in one store No

7b. Why?

8. Are there any benefits to establish a relationship with one grocery store?

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Appendix 2 -‐ Questionnaire with the companies Position in the company:

1. Which five qualities are this store´s, best qualities? (Rate from 1 -‐ 5)

Quality of object, Q1

Quality of process, Q2 1. Physical products

5. Price

2. In stock

6. Waiting time 3. Products are up to date

7. Convenience



Quality of infrastructure, Q3 Quality of interaction, Q4 9. Experience

13. Responsiveness, willingness to offer good service

10. Competence, right knowledge and skills 14. Access, the ability to contact personnel 11. Credibility

15. Courtesy, treatment of customers

12. Inspire me, test new products 16. Flexibility

Quality of atmosphere, Q5 17. Understanding of the customers need and wants

18. Lightning 19. Parking 20. Accessibility, space in store

2. Which five qualities are the most important when establishing a customer relationship?

(Rate from 1-‐5) Quality of object, Q1




6. Waiting time





9. Experience


11. Credibility

15. Courtesy, treatment of customers 12. Inspire me, test new products 16. Flexibility


17. Understanding of the customers need and wants 18. Lightning

19. Parking 20. Accessibility, space in store

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3. How satisfied do you think your customers are?

Not satisfied

Very satisfied

1 2 3 4 5 6 7 8 9 10 4a. How loyal do you perceive that your customers are?

Not loyal Very loyal

1 2 3 4 5 6 7 8 9 10

4b. Whats your perception of loyalty?

5. How much of Växjös inhabitants, do you think (in %), shop in the different grocery stores?

ICA_________________ Willys_______________ Coop Forum________________

City Gross____________ Other_______________

6. Do you have some kind of loyalty program? If yes, how does they work?

7. Are there any benefits to establish a relationship with the customers?

96

Appendix 3 Presentation of the sample

Chart 3 shows that of the 200 respondents, 87 of them were male and 113

were female.

Chart 3 Gender

Chart 4 Age

Chart 4 shows that individuals between 18-‐25 years are the largest

represented age group. The average age of the respondents is 37,5 years of

age.

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Chart 5 Education

Chart 5 shows that 90 of the respondent, study or has studied on university,

which is the largest group represented. There is no accurate translation for

gymnasiet and högstadiet. The English word for it is high school, but then

would both responses been included in the same alternative. 77

respondents have gone to gymnasiet and 33 to högstadiet.

Chart 6 Distance

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Chart 6 shows the respondents distance to the selected grocery store (Ica,

Willys, Coop and City gross). The distance is measured in km and estimated

by the respondent.

Tablet 4 The respondents perception of the market

Tablet 3 shows the customers perception of the market. 40,29% of the

customers perceive that most customer do their grocery shopping at ICA

Chart 7 Main grocery store

Chart 7 shows how often the customers visit their main FMCG store. Visiting

the store 3-‐5 times per month is the most common which 43,5% answers.

99

‘

Chart 8 Membership card

Chart 8 explains if the customers have some kind of membership card in a

FMCG store. 41% of the respondents said that they had a membership card in

one store.

100

Appendix 4 Presentation of the other SPSS tests

Loyalty tests

Correlations

Gender Loyalty

Spearman's rho Gender Correlation Coefficient 1,000 ,020


N 200 200

Loyalty Correlation Coefficient ,020 1,000


N 200 200

SPSS test 20 show no correlation between gender and loyalty, as the grey

marked number measures 0,02 in the Spearman´s rho test.

LoyaltyYes/NO * Gender Crosstabulation

Count

Gender

Total Male Female

LoyaltyYes/NO No 41 49 90

Yes 46 64 110

Total 87 113 200

Symmetric Measures

Value Approx. Sig.



N of Valid Cases 200 SPSS test 21 shows no correlation between gender and loyalty, as the grey

marked number measures 0,038 in the Phi test.

SPSS test 20 Gender * Loyalty (1-‐10 scale)

SPSS test 21 Gender * Loyalty (Yes or No)

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Correlations

Loyalty Age

Spearman's rho Loyalty Correlation Coefficient 1,000 ,398**


N 200 200

Age Correlation Coefficient ,398** 1,000


N 200 200

**. Correlation is significant at the 0.01 level (2-tailed). SPSS test 22 shows a low correlation, at the 99% scale, between age and loyalty

as the grey marked number measures 0,398 in the Spearman´s rho test.

Correlations

Age LoyaltyYes/NO

Spearman's rho Age Correlation Coefficient 1,000 ,324**


N 200 200



N 200 200

**. Correlation is significant at the 0.01 level (2-tailed). SPSS test 23 shows a low correlation, at the 99% scale, between age and loyalty

as the grey marked number measures 0,324 in the Spearman´s rho test.

SPSS test 22 Age * Loyalty (1-‐10 scale)

SPSS test 23 Age * Loyalty (Yes or No)

102

Loyalty * Education Crosstabulation

Count

Education

Total Högstadiet Gymnasiet Universitet

Loyalty Not loyal 2 13 14 29

2 0 4 9 13

3 1 6 10 17

4 4 7 6 17

5 2 5 7 14

6 2 6 6 14

7 4 12 8 24

8 5 11 7 23

9 3 9 13 25

Very loyal 10 4 10 24

Total 33 77 90 200

Chi-Square Tests

Value df

Asymp. Sig. (2-

sided)



Linear-by-Linear

Association

6,090 1 ,014


expected count is 2,15. SPSS test 24 shown no correlation between education and loyalty, as the grey

marked number is higher than 0,01.

SPSS test 24 Education * Loyalty (1-‐10 scale)

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LoyaltyYes/NO * Education Crosstabulation

Count

Education


LoyaltyYes/NO No 9 35 46 90

Yes 24 42 44 110

Total 33 77 90 200

Chi-Square Tests

Value df

Asymp. Sig. (2-

sided)



Linear-by-Linear

Association

4,851 1 ,028


expected count is 14,85. SPSS test 25 shown no correlation between education and loyalty, as the grey


Satisfaction tests

Correlations

Gender Satisfaction

Spearman's rho Gender Correlation Coefficient 1,000 ,075


N 200 200

Satisfaction Correlation Coefficient ,075 1,000


N 200 200

SPSS test 26 shown no correlation between gender and satisfaction, as the grey

marked number measures 0,075 in the Spearman´s rho test.

SPSS test 25 Education * Loyalty (Yes or No)

SPSS test 26 Gender * Satisfaction (1-‐10 scale)

104

SatisfactionYes/No * Gender Crosstabulation

Count

Gender

Total Male Female


Yes 70 97 167

Total 87 113 200

Symmetric Measures

Value Approx. Sig.




SPSS test 27 shows no correlation between gender and satisfaction, as the grey

marked number measures 0,072 in the Phi test.

Satisfaction * Age Crosstabulation

Count

Age

Total 18-25 26-35 36-45 46-55 56-65 66+

Satisfaction Not satisfied 1 1 1 0 0 0 3

2 1 0 0 0 0 0 1

3 2 1 1 4 1 1 10

4 1 0 2 3 1 1 8

5 5 2 1 2 0 1 11

6 7 6 3 3 2 1 22

7 13 9 12 2 4 1 41

8 8 7 6 12 6 8 47

9 6 7 9 8 4 2 36

Very satisfied 3 1 3 4 1 9 21

Total 47 34 38 38 19 24 200

SPSS test 27 Gender * Satisfaction (Yes or No)

SPSS test 28 Age * Satisfaction (1-‐10 scale)

105

Chi-Square Tests

Value df

Asymp. Sig. (2-

sided)



Linear-by-Linear

Association

6,737 1 ,009


expected count is ,10. SPSS test 28 shows no correlation between age and satisfaction, as the grey


Correlations

Age

SatisfactionYes/

No

Spearman's rho Age Correlation Coefficient 1,000 ,040


N 200 200

SatisfactionYes/No Correlation Coefficient ,040 1,000


N 200 200

SPSS test 29 shown no correlation between age and satisfaction, as the grey marked number measures 0,04 in the Spearman´s rho test.

SPSS test 29 Age * Satisfaction (Yes or No)

106

Satisfaction * Education Crosstabulation

Count

Education


Satisfaction Not satisfied 0 1 2 3

2 0 0 1 1

3 2 6 2 10

4 1 3 4 8

5 0 6 5 11

6 3 7 12 22

7 4 15 22 41

8 11 23 13 47

9 4 12 20 36

Very satisfied 8 4 9 21

Total 33 77 90 200

Chi-Square Tests

Value df

Asymp. Sig. (2-

sided)



Linear-by-Linear

Association

1,186 1 ,276


expected count is ,17. SPSS test 30 shows no correlation between education and satisfaction, as the

grey marked number is higher than 0,107.

SPSS test 30 Education * Satisfaction (1-‐10 scale)

107

SatisfactionYes/No * Education Crosstabulation

Count

Education


SatisfactionYes/No No 3 16 14 33

Yes 30 61 76 167

Total 33 77 90 200

Chi-Square Tests

Value df

Asymp. Sig. (2-

sided)



Linear-by-Linear

Association

,172 1 ,678


expected count is 5,45. SPSS test 31 shows no correlation between education and satisfaction, as the

grey marked number is higher than 0,01.

SPSS test 31 Education * Satisfaction (Yes or No)

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Appendix 5 -‐ Quality factors This appendix explains from which theory the various quality factors, used in the questionnaire, comes from. Q1-‐ Quality of object 1. Product quality-‐ Lehtinen & Lehtinen (1991), Grönroos (1984), Anderson et al. (1994) and Parasuraman et al. (1985) 2. In stock – Thamaraiselvan & Raja (2008) 3. Products are up to date – Parasuraman et al., (1985; 1988) 4. Range of products -‐ Matsa (2011) Q2 –Quality of process 5. Price -‐ Garvin (1984) and Desai (2011) 6. Waiting time -‐ Matsa (2011) 7. Convenience -‐ Crosby (1979) 8. Product arrangement -‐ Matsa (2011) Q3 – Quality of infrastructure 9. Experience -‐ Desai (2011) 10. Competence-‐ Parasuraman et al., (1985; 1988) 11. Credibility-‐ Parasuraman et al., (1985; 1988) 12. Inspire me, test new products –Parasuraman et al., (1985; 1988) Q4 – Quality of interaction 13. Responsiveness, willingness to offer good service –Parasuraman et al., (1985; 1988) 14. Access, the ability to contact personnel – Parasuraman et al., (1985; 1988) 15. Courtesy –Parasuraman et al., (1985; 1988) 16. Flexibility –Matsa(2011) Q5 – Quality of atmosphere 17. Understanding of the customers need and wants –Parasuraman et al., (1985; 1988) 18. Lightning -‐ Matsa, (2011) 19. Parking -‐ Matsa (2011) 20. Accessibility, space in store -‐ Matsa (2011)

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Appendix 6 -‐ About the companies

Coop Konsumentföreningen Göta owns the Coop stores, which is an economic

association of consumers in Kronoberg, Jönköping and Kalmar counties with

some adjacent areas. The association's goal is to ensure the provision of goods

and services in an efficient manner and create economic benefits for its

members. The stores are owned and operated by either the association or

through various Coop companies, which means that the stores is owned by the

association but the daily operation is done by other companies. An important

part of Coop is its work on sustainable development. This means that Coop wants

to create an organization that is sustainable socially, economically and

environmentally. Since Coop have requirements on suppliers, advocacy and

support customers, can the company also impact on the individual customer so

that the consumer creates sustainable consumption. Coop has been through this

has developed the largest range of organic and eco-‐labeled food products, which

now includes nearly 2800 products (Kf Göta, Annual Report, 2011;

www.coop.se).

Economic numbers Coop is a profitable association. The organization had 2011 a net sale of 1 514.2

MSEK and an economic result of 4, 290 MSEK. This was slightly lower than 2010,

but due to Coop have been forced to change their logistics and adjusted their

prices to the market to gain market share, has the cost increased, which created

a worse result (Kf Göta, Annual Report, 2011; www.coop.se).

Strategy and customer loyalty program Customers in the Coop stores have an important role, since its members and

customers are also its owners. In the current situation, the association has over

three million members. Coop as membership strategy and customer loyalty

program that gives money back to the customer and create a "återbäring".

"Återbäring" means that the customer who is a member of the association

receives a monthly cash payment to his/hers account. In 2011, Kf Göta paid out

26.1 million SEK in "återbäring" to its members. The sum of the paid “återbäring”

is based on how much the member is shopping for in the Coop store and can

110

grow up to 5%. The goal of the company's customer loyalty program and

“återbäring”-‐system is to create loyal customers and to strengthen the

association's position on the market (Kf Göta, Annual Report, 2011;

www.coop.se).

To make it easier for Coop's customers and members, the stores have installed

computerized membership-‐points in each store. This is to be able to

communicate and highlight all the benefits that come with a membership at

Coop. In the computerized membership-‐points the member can see how much

“återbäring” you have earned, get electronic coupons/offers, recipes and create

shopping lists (Kf Göta, Annual Report, 2011; www.coop.se).

In order to create loyal customers has Coop also focused on younger individuals.

In cooperation with local football associations has the consumers' association for

many years organized various kinds of summer activities for boys and girls

between seven and thirteen years. This has been very popular among the

country's young people, thereby giving the organization a positive goodwill (Kf

Göta, Annual Report, 2011; www.coop.se).

ICA ICA is a strong player in the FMCG industry with the vision to make the daily life

easier for customers. Mostly free ICA retailers in Sweden run the business. ICA

management is responsible for purchasing products, logistics, and marketing

and ICA management also offers support for the various merchants. ICA has

various store profiles, where ICA Maxi is the largest one, which is a combination

of independent retailers and integral chain drive. For ICA, it is important to

consciously work on sustainability and a strong community involvement. ICA

works for example with non-‐profit charitable organizations around the country

and donates leftover food from the layers. Furthermore, ICA believes that its

customers and other parties should feel safe to deal with ICA. Ica also means that

it is important to listen to its customers and the community to quickly adapt

their offers to the outside world changes and needs. To continue to develop and

maintain the market position, ICA has decided to continue develop services in

line with Cura pharmacy (ICA pharmacies available in selected stores), groceries

111

and ICA Student (special service for students). These are devices that ICA has

designed to create value for the customers and enhance loyalty (Ica, Annual

Report, 2011).

ICA has also created its own independent bank. ICA Bank has been active for

almost 10 years and has contracts with most ICA stores in Sweden. This means

that these ICA stores manage the services that the ICA Bank offers. The purpose

of creating a bank is to offer banking services to ICA’s customers, and by doing

this develop a loyalty relationship between ICA and its customers. Low fees and

clear, transparent conditions is the central concept of the ICA Bank (Ica, Annual

Report, 2011).

Economic numbers An important element in ICA is to create strong finances. By holding capital, the

company can invest in the future and stand strong in difficult times. Net sales for

ICA in 2011 were amounted to 62. 500 MSEK. Compared with 2010, was this an

increase of 3,1 % which is mostly due to increased sales and development of the

Cura pharmacies. The company's financial performance declined from 2,750

MSEK in 2010 to 2,617 million MSEK in 2011. This was due to higher costs (Ica,

Annual Report, 2011).

Strategy and customer loyalty program The ICA's strategy includes meeting the customers demand. ICA mean that they

maintain their competitiveness and meet customer demands by facing major

trends in health, accountability and simplicity with products at a great price. By

lowering their prices, ICA has increased its sales and adjusted itself to its

customers' requirements. ICA is committed to offer coveted prices, but is at the

same time developing the product ranging so that both basic and premium

products are available. The purpose of this is that ICA wants different

requirements to be met. Another important unit in the ICA strategy is that they

should listen to their customers. The company must pay attention to the

customer needs so that the range can be adjusted accordingly. Furthermore, no

customer is the same. Therefore, ICA adapts its offers to individual customers

112

because ICA believes that this creates loyalty and good relations (Ica, Annual

Report, 2011; www.ica.se).

ICA has also developed a customer loyalty program. The customer loyalty

program is designed to provide customers with different benefits to create

loyalty. Customers will receive a loyalty card that deducted at checkout. The

customer will receive 1% cash back on everything he or she purchase at ICA and

for every 2,500 SEK the customers shop, a bonus check is sent home. Loyal

customers at ICA also get the newspaper Buffé every month and personal

discounts on products that the customer usually purchases (Ica, Annual Report,

2011; www.ica.se)

Willys Willys is a FMCG store with the aim to offer a wide range of products with a high

proportion of fresh products for the price conscious individual. The FMCG store

is, since 2000, owned by the listed company Axfood, which means that Willys got

the ability to drive down prices further. 170 Willys stores are there throughout

Sweden, which are located in shopping malls, town centers and just outside the

city. Willys is a leader in the low price segment and the store says that they offer

Sweden's cheapest bag of groceries (Axfood, Annual Report, 2011;

www.willys.se).

Besides the aim to offer Sweden's cheapest bag of groceries, it is also important

for the store to create a pleasant shopping experience for the customers, respond

to the customer in a positive way and offer additional services. Also

environmental, social engagement and organic products are important for

Willys. Willys highest prioritized customer group is larger households and

families. This is because they are more likely to be price conscious. Willys thus

wants to meet the customer needs for basic commodities, but also give the

customers the opportunity to choose value-‐added products (Axfood, Annual

Report, 2011; www.willys.se).

Economic numbers As mentioned earlier, has the FMCG industry, like all other industries, been

affected by the economic crisis going on worldwide. But although the market has

113

been subdued, Willys had a stable development and was a profitable company in

2011. Willys had a turnover of 18.904 million in 2011, however, compared to

other FMCG stores, they had a negative revenue growth of -‐1.6%. The company

was nevertheless profitable and had a profit of 775 million (Axfood, Annual

Report, 2011; www.willys.se).

Strategy and customer loyalty program Willys strategy is to continue to increase sales and establish more stores. This is

to maintain market share and have the ability to face the competition. Important

for Willys is make sure that the customers understands that they offer Sweden's

cheapest bag of groceries. To do this, and to consolidate its price position, Willys

are going to create several marketing campaigns. The company has also chosen

to focus on increasing the share of private labels in the store (Axfood, Annual

Report, 2011; www.willys.se). The company's strategy also includes creating

better quality on their goods. Willys has opted for quality assurance on all fresh

meat and fruit and vegetables. Willys hope that this will lead to that customers

get a better idea of the store's products.

Willys has in the current situation no established customer loyalty program,

which allows customers to become members of a customer club, receive a loyalty

card or membership offers. The store chooses to focus on having low prices to all

customers, and instead ensure that everyone can shop cheaply. As a loyalty -‐

creating tool the company use price rather than membership (Axfood, Annual

Report, 2011).

City Gross City Gross is a FMCG store, which is owned by the listed company Bergendahls.

City Gross offer customers to shop cut Swedish meat, have manual fishing

departments and in-‐store bakeries. The company says that they have the

country's most extensive range of food and is suitable both for individuals and

businesses (Bergendahls, Annual Report, 2011; www.citygross.se). According to

a quality survey done by SKI in November 2011 (www.ski.se), customers are

most satisfied with City Gross as a single store.

114

City Gross concept is gaining ground and more and more stores are established.

Last year, the expansion led to that 5 new stores were established, which means

that there are a total of 33 City Gross stores in Sweden today. City Gross long-‐

term goal is to ensure that they are the second largest FMCG store in the Swedish

market, but the clients should find them the best store (Bergendahls, Annual

Report, 2011).

Economic numbers City Gross had 2011 sales of 9.5 MSEK and increased its turnover by 3.7% from

2010. The company turned in a good result, which was 374 TSEK.

Strategy and customer loyalty program The company's strategy for 2012 is to create a more effective marketing strategy.

The marketing strategy will focus on developing the self-‐scanning system. City

Gross will also create a more efficient organization and create fewer charges

imposed through skills transfer, new ways of working and clearer interface

between employees and departments. The company includes in its strategy that

they will further develop its cooperation with the pharmacy "Hjärtat". At the

moment City Gross have six pharmacies in connection with the City Gross store.

To create loyal customers, City Gross chose to develop a customer club with a

benefit card. Benefit card means that members receive exclusive offers, recipes

and tips. The card means that customers do not need to collect points without

rebates that customers may be deducted directly.

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Linnaeus University – a firm focus on quality and competence On 1 January 2010 Växjö University and the University of Kalmar merged to form Linnaeus University. This new university is the product of a will to improve the quality, enhance the appeal and boost the development potential of teaching and research, at the same time as it plays a prominent role in working closely together with local society. Linnaeus University offers an attractive knowledge environment characterised by high quality and a competitive portfolio of skills. Linnaeus University is a modern, international university with the emphasis on the desire for knowledge, creative thinking and practical innovations. For us, the focus is on proximity to our students, but also on the world around us and the future ahead. Linnæus University SE-391 82 Kalmar/SE-351 95 Växjö Telephone +46 772-‐28 80 00