What Affect Consumer Loyalty in Supermarket Industry?

Abstract

With the development of supermarket industry, the scale of the supermarket business is showing an upward trend (Lo, Lau & Lin, 2001). This upward trend is mainly manifested in two aspects: one supermarket chain’s sharp rise in overall size; the other hand, a single shop area of the supermarket is also expanding.

Through the chain supermarket to develop the benefits of scale is the great secret of winning. As puerile supermarket is to highlight the scale, and to achieve economies of scale in supermarkets is an important way to actively chain operations. Since the franchise chain started by some companies with large supermarket chains, the supermarket has expanded rapidly.

The study was basically a survey that used both qualitative and quantitative approaches. And the research method approaches the questionnaire, the customers who just finished their shopping are for the survey target.

In the modern market, creating customer loyalty is the one of the successful ways to acquire the maximal profit of the company, so that the customer loyalty has been the most important element for the marketing.

Aston Lane Tesco is one of the Tesco branches in Birmingham, This study is through a case study (research in Aston Lane Tesco) to gain improved understanding of the customer loyalty essentiality and it will enhance or endangering the business market and market performance.

Keywords

 Customer loyalty; Customer satisfaction; Service quality; Supermarket industry; Tesco

Table of Contents

Abstract 2

Chapter 1 Introduction 5

1.1 Research background 5

1.2 Research significance 7

1.3 Aim and objections 7

Chapter 2 Literature Review 9

2.1 Concept of loyalty 9

2.2 Meaning of customer loyalty 9

2.2.1 Behavior theory 9

2.2.2 Emotion theory 10

2.2.3 General theory 10

2.2.4 Review of customer loyalty 11

2.3 Classification of customer loyalty 13

2.4 Influencing factors of customer loyalty 15

2.5 Case study of NPS method to improve customer loyalty 16

2.6 The relationship between service quality and customer loyalty 18

2.6.1 Direct relationship 19

2.6.2 Indirect relationship 19

2.7 The relationship between customer satisfaction and customer loyalty 19

2.7.1 Positive correlation 20

2.7.2 Non-positive correlation 20

2.7.3 Non-linear relationship 21

2.8 UK supermarket environment 21

2.8.1 Wm Morrison 21

2.8.2 ASDA 22

2.8.3 Sainsbury 22

2.8.4 Tesco 23

Chapter 3 Research design 24

3.1 Data collection 24

3.1.1 Primary research 24

3.1.2 Secondary research 24

3.2 Questionnaire design 25

Chapter 4 Results and analysis 26

4.1 Results of the questionnaire 26

4.1.1 Respondents’ information 26

4.1.2 Respondents’ selection of the supermarket 28

4.1.3 Respondents choose Tesco 28

4.1.4 Frequency shop in Tesco 29

4.1.5 Percentage of the shop to choose 30

4.1.6 Respondents’ loyalty and satisfaction 30

4.1.7 Satisfy product and service 31

4.1.8 Popularize Tesco 32

4.1.9 Tesco shopping environment 32

4.1.10 The way travel to Tesco 33

4.1.11 Respondents’ loyalty 33

4.1.12 The factor of customer chose Tesco 34

4.2 Analysis 37

4.2.1 Analysis of customer satisfaction 37

4.2.2 Price factor 38

4.2.3 Marketing environment 39

4.2.4 Competitive factors 39

4.2.5 Recency frequency value 39

4.2.6 Excitement Factors 41

4.2.7 Performance factors 41

4.2.8 Price 43

4.2.9 Quality 44

4.2.10 Loyalty 44

4.2.11 Emotion of the customer 45

4.2.12 Customer behavior 46

Chapter 5 Conclusion and Recommendation 47

5.1 Main conclusions 47

5.2 Recommendation 47

5.2.1 To improve customer satisfaction 48

5.2.2 To enhance the image of the supermarket 51

5.2.3 To build customer switching costs 52

5.2.4 To strengthen the relationship with stakeholders 52

References 54

Appendix 59