2 Basic concepts (p. 7-8)
Having briefly discussed the goals of the present research in the preceding chapter, this chapter will first provide the notional basis of the research project by introducing the concepts of customer loyalty and logistics. While a wealth of literature exists in both areas, only the most important issues for carrying out this study will be discussed. The chapter will conclude by identifying research deficits in logistics and customer loyalty, from which a set of research questions will be derived to guide this study.
2.1 Customer loyalty
Obtaining a thorough understanding of customer loyalty is a prerequisite for the execution of the research at hand. For that, the development of customer loyalty research within the framework of relationship marketing will be presented first, before different customer loyalty concepts will be introduced. From these concepts, a definition of customer loyalty for use in this study will be derived, before both consequences and antecedents of customer loyalty will be portrayed.
2.1.1 Developments in customer loyalty research
Since the beginning of the 1990s, customer loyalty has gained importance both in relationship marketing research and in business. In business, this can be attributed to changing market- and competition-environments (Pritchard, Havitz, and Howard 1999, p. 333). Due to a shift from a sellers’ to a buyers’ market and because of an increasing degree of globalization, most industries find themselves confronted with new challenges. In a first phase, firms tried to face these challenges by focusing on their internal processes and organizational structures, trying to achieve cost reductions by concentrating on internal improvements. A second phase of external focus followed, where firms directed attention to their customers, trying to retain existing ones and to win over new ones (churning). Since"acquiring new customers is much more expensive than keeping them" (Stone, Woodcock, and Wilson 1996, p. 676),"loyal customers […] are the bedrock of any business" (Caruana 2000, p. 811). According to Fornell (1992, p. 7) and Fournier and Yao (1997, p. 451), market shares have to be secured by retaining customers in markets facing low growth-rates and high competition. To Aaker (1996, p. 106),"a loyal customer base represents a barrier to entry, a basis for a price premium, time to respond to competitor innovations, and a bulwark against deleterious price competition." Baldinger and Rubinson (1997, p. 41) show that"loyalty is critical to brand volume, is highly correlated to market share, and can be used as the basis of predicting future market share, consequently, understanding loyalty appears critical to any meaningful analysis of marketing strategy."
In marketing research, two trends mark the development of customer loyalty. While individual transactions initially were in the center of marketing research, the focus shifted towards analyzing relationships. Grönroos (1994, p. 347) states that the‘traditional’ marketing concept of the marketing mix with its‘4 Ps’1, developed in the middle of the last century, had been the established approach until the 1990s. This approach, however, focuses solely on transactions, a deficit tackled by the relationship marketing approach. At the core of it is the study of relationships between buyers and sellers of goods or services, in contrast to merely examining transactions (Andersen 2001, p. 167). An often cited and comprehensive definition of relationship marketing is provided by Morgan and Hunt (1994, p. 22):"Relationship marketing refers to all marketing activities directed toward establishing, developing, and maintaining successful relational exchanges." Therefore, the relationship marketing approach provides a suitable environment in which customer loyalty research can be nested. |
