ArticlePDF Available

Abstract

Purpose – Previous research has explored the impact of customer participation in organizational‐sponsored loyalty programs on customer loyalty; however, the findings are mixed. Other research, outside the loyalty program literature, reveals that customers who socially interact with other customers, via participation in brand communities, often exhibit an intense loyalty to the sponsoring brands. Proposes to investigate the following questions: “Can loyalty programs be differentiated based on whether or not members perceive a sense of community?”; and “Does a perception of a sense of community impact member loyalty to sponsoring organizations?” Design/methodology/approach – Q‐technique factor analysis is utilized analyzing statements from loyalty program participants. Principal component factor and cluster analyses confirm a two‐tiered classification schema distinguishing loyalty programs based on perceptions of communal benefits. Differences between the two factors are explored. A survey developed from the Q‐sort analysis was then administered to 153 loyalty program participants, providing evidence that consumers are more loyal to communal programs. Findings – Loyalty programs can be distinguished based on the sense of community which members perceive. Furthermore, consumers are more loyal to communal programs than to programs that simply use financial incentives. Communal programs elicit stronger emotional connections and participants are significantly less predisposed to competitor switching. Originality/value – This study integrates the theory of sense of community into the marketing literature, also offering researchers a nine‐item, unidimensional scale to measure the construct within the context of loyalty programs. Confusion in the literature regarding the efficacy of loyalty programs is diminished by showing a positive relationship between loyalty and a member's perceptions of community.
Journal of Services Marketing
Loyalty programs and a sense of community
Mark S. Rosenbaum Amy L. Ostrom Ronald Kuntze
Article information:
To cite this document:
Mark S. Rosenbaum Amy L. Ostrom Ronald Kuntze, (2005),"Loyalty programs and a sense of community", Journal of Services
Marketing, Vol. 19 Iss 4 pp. 222 - 233
Permanent link to this document:
http://dx.doi.org/10.1108/08876040510605253
Downloaded on: 05 December 2015, At: 19:17 (PT)
References: this document contains references to 46 other documents.
To copy this document: permissions@emeraldinsight.com
The fulltext of this document has been downloaded 6654 times since 2006*
Users who downloaded this article also downloaded:
Mark D. Uncles, Grahame R. Dowling, Kathy Hammond, (2003),"Customer loyalty and customer loyalty programs", Journal of
Consumer Marketing, Vol. 20 Iss 4 pp. 294-316 http://dx.doi.org/10.1108/07363760310483676
Blanca García Gómez, Ana Gutiérrez Arranz, Jesús Gutiérrez Cillán, (2006),"The role of loyalty programs in behavioral and
affective loyalty", Journal of Consumer Marketing, Vol. 23 Iss 7 pp. 387-396 http://dx.doi.org/10.1108/07363760610712920
Bernd Stauss, Maxie Schmidt, Andreas Schoeler, (2005),"Customer frustration in loyalty programs", International Journal of
Service Industry Management, Vol. 16 Iss 3 pp. 229-252 http://dx.doi.org/10.1108/09564230510601387
Access to this document was granted through an Emerald subscription provided by emerald-srm:203711 []
For Authors
If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service
information about how to choose which publication to write for and submission guidelines are available for all. Please visit
www.emeraldinsight.com/authors for more information.
About Emerald www.emeraldinsight.com
Emerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of
more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online
products and additional customer resources and services.
Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics
(COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation.
*Related content and download information correct at time of download.
Downloaded by Southern New Hampshire University At 19:17 05 December 2015 (PT)
Loyalty programs and a sense of community
Mark S. Rosenbaum
Department of Marketing, University of Hawaii at Manoa, Honolulu, Hawaii, USA
Amy L. Ostrom
Department of Marketing, W.P. Carey School of Business, Arizona State University, Tempe, Arizona, USA, and
Ronald Kuntze
John H. Sykes College of Business, University of Tampa, Tampa, Florida, USA
Abstract
Purpose Previous research has explored the impact of customer participation in organizational-sponsored loyalty programs on customer loyalty;
however, the findings are mixed. Other research, outside the loyalty program literature, reveals that customers who socially interact with other
customers, via participation in brand communities, often exhibit an intense loyalty to the sponsoring brands. Proposes to investigate the following
questions: “Can loyalty programs be differentiated based on whether or not members perceive a sense of community?”; and “Does a perception of a
sense of community impact member loyalty to sponsoring organizations?”
Design/methodology/approach Q-technique factor analysis is utilized analyzing statements from loyalty program participants. Principal
component factor and cluster analyses confirm a two-tiered classification schema distinguishing loyalty programs based on perceptions of communal
benefits. Differences between the two factors are explored. A survey developed from the Q-sort analysis was then administered to 153 loyalty program
participants, providing evidence that consumers are more loyal to communal programs.
Findings Loyalty programs can be distinguished based on the sense of community which members perceive. Furthermore, consumers are more loyal
to communal programs than to programs that simply use financial incentives. Communal programs elicit stronger emotional connections and
participants are significantly less predisposed to competitor switching.
Originality/value This study integrates the theory of sense of community into the marketing literature, also offering researchers a nine-item,
unidimensional scale to measure the construct within the context of loyalty programs. Confusion in the literature regarding the efficacy of loyalty
programs is diminished by showing a positive relationship between loyalty and a member’s perceptions of community.
Keywords Loyalty schemes, Brand management, Communities, Brand loyalty, Customer satisfaction
Paper type Research paper
An executive summary for managers and executive
readers can be found at the end of this article.
Introduction: loyalty programs
Since the early 1990s, organizations have been encouraging
customer participation in a proliferation of loyalty programs
in which consumers are offered incentives in exchange for
repeat business (Roehm et al.,2002).Alsoknownas
“frequency programs” (Kivetz and Simonson, 2002), loyalty
programs are designed as a tool for organizations to develop
and enhance customer loyalty. By enrolling in organizational-
sponsored loyalty programs, customers receive benefits such
as monetary discounts, the ability to join customer clubs,
organizational newsletters, or prizes. Based on the assumption
that loyalty programs result in increased customer loyalty
(Dowling and Uncles, 1997; Palmer et al., 2000),
organizations have encouraged customers to enroll in
sponsored programs. As a result, 70 percent of today’s
consumers participate in an organization-sponsored loyalty
program (Merriman, 2001). However, even though
organizations have placed a great deal of importance on
improving customer loyalty via loyalty program membership,
defection rates among satisfied customers, who are presumed
to be a firm’s most loyal customers, remain as high as 90
percent (Oliver, 1999).
Loyalty programs 5 customer loyalty?
Does loyalty program membership actually enhance customer
loyalty? Answering this question is complicated by the
confusion regarding the efficacy of loyalty program
membership. Some researchers have found a positive
relationship between loyalty program membership and
customer loyalty (Bolton et al., 2000). Others, however,
have found that the relationship is mixed (Smith et al., 2003;
Yi and Jeon, 2003; Kivetz and Simonson, 2002), or non-
existent (Liebermann, 1999; Divett et al., 2003 McIlroy and
Barnett, 2000; O’Brien and Jones, 1995; Sharp and Sharp,
1997; Smith et al., 2003).
Researchers have posited a variety of different reasons to
explain the success, and failure, of loyalty programs. Studies
suggest that the efficacy of loyalty programs is impacted by
the following: the timing of rewards (Dowling and Uncles,
1997; Yi and Jeon, 2003), the ease of use (Cigliano et al.,
2000), the ability of the sponsoring organization to process
effectively program data (Palmer et al., 2000), the amount of
effort required for program reward redemption (Kivetz and
The Emerald Research Register for this journal is available at
www.emeraldinsight.com/researchregister
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0887-6045.htm
Journal of Services Marketing
19/4 (2005) 222 233
q Emerald Group Publishing Limited [ISSN 0887-6045]
[DOI 10.1108/08876040510605253]
222
Downloaded by Southern New Hampshire University At 19:17 05 December 2015 (PT)
Simonson, 2002), the compatibility of the reward with the
brand image (Roehm et al., 2002), or the ability of members
to perceive value in the program’s rewards (O’Brien and
Jones, 1995).
Conceptualization of loyalty programs
While all of these aforementioned reasons are plausible,
research findings outside of the loyalty program literature
suggest that organizations that promote social interaction
among customers realize enhanced customer loyalty (Arnould
and Price, 2000; Aubert-Gamet and Cova, 1999; Cova, 1997;
McAlexander et al., 2002; Muniz and O’Guinn, 2001; Oliver,
1999; Schouten and McAlexander, 1995). Research indicates
that by encouraging customers to participate in brand
communities (structured social relationships among users of
a brand), also defined as “specialized, non-geographically
bound communities”, is a particularly successful brand
strategy (Muniz and O’Guinn, 2001, p. 412). For example,
customers who participate in these brand communities, such
as Camp Jeep, HOG (Harley-Davidson) rally’s, Saturn
homecomings, or Winnebago clubs, often exhibit extreme
loyalty, or “iron bonds” (McAlexander et al., 2002), to
sponsoring organizations.
To date, marketing researchers have not considered
organizational-sponsored brand communities as loyalty
programs. However, in this study, the concept of loyalty
programs is extended to include any organizational
sponsored program that attempts to build customer loyalty
by transferring support from the organization to program
members.
Communal loyalty programs are defined as organizational
sponsored loyalty programs that transfer support from
organizations to members by providing them with a sense of
community. McMillian and Chavis (1986) define a sense of
community as a feeling of belonging, a belief that members
matter to one another and to the overall group, and a shared
faith that members’ needs will be met through their
commitment to be together. Communal loyalty programs
are often offered by luxury and higher involvement brands
such as automobiles and specialty retailers. It is worth noting
that customers often voluntarily form social clubs (Muniz and
O’Guinn, 2001) or host internet sites centered on a product
or brand, on their own volition. These member-created
programs, however, are not examples of loyalty programs
because they lack sanction from a sponsoring organization.
Non-communal loyalty programs are defined as loyalty
programs that transfer support from organizations to
members by providing them with financial benefits, such as
monetary discounts on present, or future, purchases. These
programs are more universal than communal loyalty programs
and are often sponsored by organizations such as grocery
stores and airlines.
Study purpose and plan
The purpose of this study is to investigate whether members of
communal loyalty programs exhibit a stronger loyalty to
sponsoring organizations compared to members of non-
communal loyalty programs. In doing so, this study bridges
the brand community and loyalty program literatures by
drawing on McMillian and Chavis’ (1986) (also McMillian,
1996) theory of sense of community. Thus far, researchers have
applied the theory of a sense of community to explore an
individual’s sense of being part of a geographically-based
community. This study represents a first attempt to apply the
theory to an individual’s sense of being part of a non-
geographic, relational community (Muniz and O’Guinn 2001).
The study also investigates loyalty programs sponsored by both
manufacturers and service establishments; heeding the call of
service experts to further explore loyalty within the context of
both services and manufacturers (Grove et al., 2003; Cooley,
2002). These objectives are achieved by addressing two
research questions. First, can loyalty programs be differentiated
based on whether or not members perceive a sense of
community? Second, does this perception of a sense of
community impact member loyalty to sponsoring
organizations?
Q-factor analysis
To answer the first question, this study utilizes Q-technique
factor analysis (Brown, 1980; Thompson, 2000). Although
the Q-technique method is relatively absent from the
marketing literature (see Kleine et al.,1995foran
exception), it is the correct methodology when attempting
to identify types, or clusters, of people with similar views.
This study focuses on identifying members of various loyalty
programs who share similar views regarding whether or not
they perceive a sense of community. The second research
question, which addresses the impact of a sense of community
on customer loyalty, is addressed via regression analysis of
data collected by surveying over 150 loyalty program
members.
Study plan
The plan for this study is the following. First, the theory of a
sense of community, along with its related communal benefits,
is discussed. Second, the results of the Q-technique factor
analysis and regression analysis are presented. The study
concludes with managerial implications and future directives.
Literature review sense of community
Many consumer researchers have generated rich, descriptive
data that reveal some customers desire to participate in brand
communities, represented by communal loyalty programs
(McAlexander et al., 2002; Muniz and O’Guinn, 2001;
Oliver, 1999; Schouten and McAlexander, 1995). In
addition, McAlexander et al. (2002) recently developed a
community integration scale that assesses a customer’s
perceived integration of being within a brand community.
Although this research stream is insightful, it does not
specifically address the benefits that customers may receive by
participating in communal loyalty programs. Thus, a
customer’s motivation to participate in a communal loyalty
program remains unclear.
McMillian and Chavis (1986) contend that individuals
achieve a sense of community when they obtain four benefits
from joining a specific group. These benefits are:
1 membership, a feeling of belonging;
2 influence, a sense of mattering;
3 integration and fulfillment of needs, a feeling that
members needs will be met through group membership:
and
4 shared emotional connections, the commitment and belief
that members have shared and will share history, common
places, time together, and similar experiences.
Loyalty programs and a sense of community
Mark S. Rosenbaum, Amy L. Ostrom and Ronald Kuntze
Journal of Services Marketing
Volume 19 · Number 4 · 2005 · 222233
223
Downloaded by Southern New Hampshire University At 19:17 05 December 2015 (PT)
These four benefits are now discussed in-depth.
Communal benefits
Membership
Membership refers to each group member perceiving that he/she
has invested part of him/herself to become a member in a
specific group and is therefore entitled to belong to that group.
By striving for membership, individuals obtain a sensation of
securing a position in the group and membership becomes
valuable. For instance, individuals must purchase a BMW in
order to participate in an organizational-sponsored club. Given
the hefty price of a BMW, owners may perceive that their club
membership is valuable because only an e
´
lite group of
individuals are offered the opportunity to participate in the
club. Consequently, loyalty programsthatpermitcustomersto
join without incurring fees or minimum purchase requirements
may be unable to generate feelings of membership among
members.
Influence
Influence refers to members feeling empowered to influence
the group, as well as sensing that the group has some
influence over them. Loyalty programs can promote influence
by offering members the ability to communicate to senior
managers or to a design team. For instance, Harley-
Davidson’s and Jeep’s program members provide valuable
consumer feedback to senior management and corporate
engineers at members-only events (Muniz and O’Guinn,
2001; Schouten and McAlexander, 1995; McAlexander et al.,
2002).
Integration and fulfillment of needs
This concept refers to members feeling rewarded for group
participation. McMillian and Chavis (1986) suggest that the
two rewards that members covet are status and self-
competency (i.e. members receiving skills or knowledge
from other members). Thus, Neiman-Marcus’ loyalty
program members, or In-Circle members, may desire the
status associated with the program and the opportunity to
mingle with other affluent members, as well as to learn about
contemporary trends at the store’s invitation-only, In-Circle
events.
Shared emotional connection
This concept refers to members desiring to fashion the
organization’s identity, or history, into their own self-
identity. For example, Harley-Davidson HOG members
may perceive the sponsoring organization’s products, or
brand image, as an extension of their self-identity (Belk,
1988; Oliver, 1999; Schouten and McAlexander, 1995). In a
similar fashion, In-Circle members may display their
monthly fashion catalog, the Book, in their households for
others to view and to acknowledge.
This discussion suggests that communal loyalty program
members may receive all, or some, of the four benefits
associated with a sense of community. If so, then it would be
possible to identify, and to cluster, communal and non-
communal loyalty program members based on the similarity
of their perspectives regarding the communal benefits
associated with their loyalty program membership.
Study 1: methodology
Q-technique factor analysis is the appropriate methodology
for attempting to identify types, or clusters, of people with
similar views on a set of statements (McKeown and Thomas,
1988). In this study, “people” represent communal and non-
communal loyalty program members. The Q-technique is
based on a set of procedures whereby participants rank order
statements. Typically, a participant orders each statement,
from “most agree” to “most disagree”, into a predetermined
number of categories and items within each category,
representing a normal distribution (Thompson, 2000). The
items so arrayed comprise what is termed the Q-sort.
Some researchers have criticized the technique due to the
forcing procedure. Their point of contention is that
participants would not sort the statements into a normally
distributed pattern without being prompted to do so (Brown,
1971). To overcome this objection, the participants of this
study were permitted to freely sort the statements based on
Brown’s (1980) recommendations. As a purely statistical
matter, Q-sort results tend to be the same regardless of
whether or not subjects freely distribute statements according
to a forced distribution (Brown, 1971).
Q-sort stimuli
The Q-sample stimuli consisted of 24 statements developed
for this study based on the sense of community literature.
Researchers using the Q-technique often create statements
based upon their knowledge of the dimensions being assessed.
The focus of the technique lies in uncovering differences in
the sorting patterns of the statements between factors; not on
testing hypothesized relationships (Aaker et al., 1998; Brown,
1980). Accordingly, statements were developed from
McMillian and Chavis’ (1986) conceptualization of a sense
of community and its related communal benefits. Although
previous researchers have developed a sense of community
scale, this scale assesses membership in a residential
community, as opposed to being a member of a relational
community (Davidson and Cotter, 1986). Therefore,
adjustments were necessary. Other statements were
developed from Oliver’s (1999) conceptualization of
resistance to competition (i.e. referred to as individual
fortitude by Oliver, 1999) and loyalty. To date, Oliver
(1999) has not established an individual fortitude/loyalty
scale.
Sample
Kerlinger (1986, p. 521) states that in Q, “one tests theories
on small sets of individuals carefully chosen for their ‘known’
or presumed possession of some significant characteristic or
characteristics”. Given the sampling nature of Q-technique,
the number of participants sampled in a Q-study should not
exceed the number of statements employed (Brown, 1980;
Stephenson, 1953; Thompson, 2000). Thus, 20 participants
were purposively selected based on the type of loyalty
program that they belonged to, as illustrated in Table I. The
loyalty programs were selected because they represent a
continuum of programs based on communal benefits. For
example, some of the sampled loyalty programs appear to
offer members all the benefits associated with a sense of
community, while others offer some of the benefits, and
some programs do not appear to offer any of the benefits.
Participants were selected through loyalty program internet
sites, as well as from a pool of graduate level students and
staff who either attend or work at a major Southwestern
university.
Loyalty programs and a sense of community
Mark S. Rosenbaum, Amy L. Ostrom and Ronald Kuntze
Journal of Services Marketing
Volume 19 · Number 4 · 2005 · 222233
224
Downloaded by Southern New Hampshire University At 19:17 05 December 2015 (PT)
Q-sort administration
Each participant was given 24 cards with one statement
imprinted on it. Next, the participant was shown a board that
was divided into three areas: agree, neutral, and disagree.
Each of the “agree” and “disagree” sections was split into four
additional segments that were marked þ 1toþ 4 on the agree
side and 2 1to2 4 on the disagree side. The neutral segment
(marked with a zero) separated the agree side from the
disagree side.
Based on Brown’s (1980) directives for a free sort, each
participant was asked to first divide the statements into three
categories, agree, neutral, and disagree. Then, the participant
was instructed to follow a normal distribution sorting pattern
based on the number of statements that he/she had placed on
each side. For example, if the participant placed 14
statements on the agree side, then he/she was asked to sort
in a 5 (þ 1), 4, 3, 2 (þ 4) pattern. After the participant
signaled completion of the initial sort, he/she was asked to
review the board and to make any changes regardless of
whether the resultant pattern was normally distributed.
Study 1: data results
Data from the completed Q sorts were entered into
PQMethod 2.11 software (Schmolck and Atkinson, 2002).
Following typical Q-sort procedures (Brown, 1980;
McKeown and Thomas, 1988), principal components factor
analysis was performed, with varimax rotation, to extract
factors and to calculate factor loadings. These loadings
represent correlation coefficients that express the amount of
similarity between an individual Q sort and an extracted
factor. In order to consider a rotated factor loading to be
statistically significant (p , 0:01), it had to exceed 0.52. This
number was obtained from the formula described in Brown
(1980, pp. 283-4): (1/2:58ð1
ffiffiffiffi
N
p
Þ, where N ¼ number of
statements in the Q sort. Two factors, accounting for 61
percent of the total variance, emerged. The factors, and their
loadings, are illustrated in Table I.
Communal vs non-communal factors
Communal loyalty program members define Factor 1 (e.g.
Winnebago, American Express, and Harley-Davidson). The
programs these members belong to often require hefty
financial investments, enhance member status, or promote
member interaction. Non-communal loyalty program
members define Factor 2 (e.g. Ulta, Barnes and Noble, and
Marriott). The programs that these members belong to are
typically free of charge and available to all customers.
Although the majority of loyalty program members loaded
on one factor, one program member cross-loaded and another
program member negatively loaded. Bellagio loaded on both
factors, probably because it is both a hotel and one of the
most luxurious casinos in Las Vegas. Thus, Bellagio loyalty
program members receive status, along with financial benefits.
Petco negatively loaded on Factor 1, indicating an opposite
perception to communal programs, as opposed to a good fit
with non-communal programs.
Cluster analysis
A K-means cluster analysis was performed to confirm that the
sampled loyalty programs can be classified into one of two types.
The K-means procedure was chosen because the Q-factor
analysis provided an a priori number of clusters that the data
should specify (Hair and Black, 2000). In the cluster analysis,
the statements were considered as variables and each loyalty
program member was considered as a participant. The cluster
analysis solution mirrored the Q solution. Communal loyalty
programs were classified into one cluster and non-communal
programs were classified into another cluster (see Table I).
Table I Factor matrix for Q-sort loyalty program loadings
Organizational-sponsored loyalty program Factor 1 Factor 2 Cluster Type of retailer
American Express 0.86 1 Financial services
Bellagio 0.69 0.49 1 Casino/hotel
BMW (Motorcycle) 0.84 1 Motorcycle, automobile
Harley-Davidson 0.85 1 Motorcycles
Jaguar 0.90 1 Automobiles
Mastercraft 0.66 1 Boats
Neiman-Marcus 0.58 1 Specialty retailer
Oneworld Alliance 0.90 1 Airport lounge access
Petco 2 0.66 2 Pet supplies
America West 0.60 2 Airline
Barnes and Noble 0.54 2 Bookstore
Bashas 0.87 2 Grocery
Chico’s 0.63 2 Women’s clothing
General Motors Mastercard 0.55 2 Financial services
General Nutrition Center 0.71 2 Health food
Marriott 0.86 2 Lodging
Northwest Airlines 0.71 2 Airline
Safeway 0.78 2 Grocery
Ulta 0.76 2 Cosmetics, beauty supply
Winnebago 0.85 1 Recreation vehicles
Note: Principal components analysis with varimax rotation
Loyalty programs and a sense of community
Mark S. Rosenbaum, Amy L. Ostrom and Ronald Kuntze
Journal of Services Marketing
Volume 19 · Number 4 · 2005 · 222233
225
Downloaded by Southern New Hampshire University At 19:17 05 December 2015 (PT)
Bellagio was classified in the communal cluster and Petco was
classified in the non-communal cluster.
Factor attributes
The attributes characterizing the factors were analyzed by
interpreting each statement’s factor score. Factor scores are
weighted z-scores for each statement that have been
reconverted into an array of scores corresponding to the þ 4
(strongly agree) to 2 4 (strongly disagree) values used in the
Q-sort continuum (McKeown and Thomas, 1988). A large
positive score (þ 4, þ 3, þ 2) represents a highly indicative
statement of the factor and a large negative score (2 4, 2 3,
2 2) shows the opposite of the statement being indicative of
the factor. Low absolute value scores, 2 1 and þ 1, represent
unimportant statements and a zero score indicates that the
statement is not significant to the factor.
Statements that received large positive and negative factor
scores are presented first. This analysis permits one to
consider participants as rational individuals whose statement
scores tell a story about their attitudes and behaviors towards
their loyalty programs. Factor 2 scores, which represent
members of the more widespread, non-communal loyalty
programs, are presented first. Factor 1 scores, which represent
members of communal loyalty programs, are presented
second. Next, factor statement scores are presented in
tandem. The analysis shown in Table II is expressed by
displaying the statement’s weighted z-score, the statement
number, and the actual statement.
In the positive statements, Factor 2 results indicate that
purchasing behavior is significantly impacted by their loyalty
program membership (5); however, this does not prevent
these members from looking over the fence to see if the grass
is greener elsewhere (24, 14, 16). Not surprisingly, non-
communal loyalty program members do not indicate a strong
sense of community (13), but rather, a capacity to easily
switch brand alliances often due to lower competitor prices.
Although non-communal members do not desire to terminate
their relationship with sponsoring organizations (21), their
demonstrated loyalty pales to that of communal loyalty
program members (discussed later). These speculations are
reinforced by the strong negative factor scores (see Table III).
Non-communal loyalty program members indicate
satisfaction with the sponsoring organizations (11), consider
the organization an important part of their life (17), and
would not speak unfavorably of the organization (20). Yet,
these members do not consider themselves to be a part of a
brand community (18, 15). Thus, the ties that members
maintain with sponsoring organizations are purely economic,
as they are not willing to pay higher prices due to some
semblance of loyalty (23).
The sorting pattern for communal loyalty program
members (Factor 1) is quite different from that of non-
communal (factor 2) loyalty program members (see Table
IV). Perhaps the motivating power of community is inducing
a relationship between members and the sponsoring
organization (21), or maybe members are impressed with
the exclusive benefits which they are receiving (7, 9). For
whatever reason, key non-price attributes such as status (7),
non-financial rewards (9), and exclusivity (1) rise to the
forefront of importance with the communal programs. These
findings are a stark contrast from non-communal program
members who are far more influenced by price and by a
willingness to patronize competing organizations.
The strong negative indicators underscore that attitudes
regarding loyalty program membership differ between
communal and non-communal members (see Table V).
Communal loyalty program members have extremely positive
experiences interacting with their sponsoring organizations
(11) and they view their membership as being meaningful (4).
Hence, communal members consider themselves to be loyal
to their sponsoring organizations (22), perhaps, because they
Table III Strong negative indicators: non-communal programs (Factor 2)
2 4 11 I usually do not have positive experiences interacting with
(the organization)
2 4 20 I speak unfavorably about the company to others
2 3 17 The company is not an important part of my life
2 3 23 I would pay more for products or services in order to buy
them from the organization compared with prices at other
organizations
2 2 8 I am not satisfied with the financial rewards that I receive as
a participant in the loyalty program
2 2 15 I enjoy life more now as a participant in the loyalty program
2 2 18 I am drawn to the social activities that the organization
provides for the participants of its loyalty program
Table II Strong positive indicators: non-communal programs (Factor 2)
1 4 5 The loyalty program has the ability to influence my purchase
behaviors
1 4 24 I would be willing to try products or services from a
competitor of (the organization)
1 3 14 I tend to notice information from other companies that offer
similar products, or services, compared with those offered
by (the organization)
1 3 16 Competitive information has the ability to encourage me to
try other products or services similar to the kinds offered by
(the organization)
1 2 6 I don’t feel that I am influential as a participant in the loyalty
program
1 2 13 I do not perceive a strong “sense of community” among the
participants of the loyalty program
1 2 21 I can’t see ending my relationship with the company
Table IV Strong positive indicators: communal loyalty programs (Factor 1)
1 4 7 I enjoy the status of being a participant in the loyalty
program
1 4 9 I receive many rewards, other than financial, as a
participant in the loyalty program
1 3 1 The loyalty program has a sense of exclusivity associated
with it
1 3 21 I can’t see ending my relationship with the company
1 2 5 The loyalty program has the ability to influence my purchase
behaviors
1 2 10 I have positive experiences interacting with other
participants in the loyalty program
1 2 12 I believe that I am part of a community made up of
participants of the loyalty program
Loyalty programs and a sense of community
Mark S. Rosenbaum, Amy L. Ostrom and Ronald Kuntze
Journal of Services Marketing
Volume 19 · Number 4 · 2005 · 222233
226
Downloaded by Southern New Hampshire University At 19:17 05 December 2015 (PT)
perceive themselves as being part of a specialized, non-
geographically bound community (13).
Factor comparisons
Each statement’s weighted z-score is presented in order to
analyze differences between communal and non-communal
loyalty program members. This analysis permits a researcher
to analyze low and neutral scores (þ 1, 0, 2 1) that, in a
comparison to another factor, may reveal important
information that distinguishes the factors.
Communal loyalty program members, Factor 1, display a
stronger sense of exclusivity (1) and a perception of program
meaningfulness (4) compared to non-communal loyalty
program members, Factor 2 (see Table VI). In addition,
communal loyalty program members are somewhat more
likely than non-communal members to perceive themselves as
members of a loyalty program (3).
Interestingly, non-communal loyalty program members
perceive that their membership influences their purchase
behaviors to a larger extent than communal members (5) (see
Table VII). Given the financial discounts associated with non-
communal loyalty programs, it is not surprising that statement
5 was one of the most significant statements for Factor 2.
After all, the tie that non-communal loyalty program
members maintain with their organizations is an economic
one.
Given the two þ 4 factor scores for statements 7 and 9, this
group of statements indicates an important benefit for
communal loyalty program members (see Table VIII). Both
factors indicate equal satisfaction with the financial benefits
associated with members (8). However, communal loyalty
program members enjoy the status (7) and non-financial
rewards (9) associated with their programs more so than non-
communal loyalty program members.
Communal loyalty program members have more shared
emotional connections with other members, as compared to
non-communal members (10) (see Table IX). However, both
factors have positive experiences interacting with sponsoring
organizations (11). Thus, communal loyalty program
members may be more likely than non-communal members
to develop effective bonds with their sponsoring
organizations.
Table X reveals that communal loyalty program members
perceive a stronger sense of community compared to non-
communal program members (12, 13). Hence, communal
loyalty program members are more likely than non-communal
members to perceive that they are part of a non-geographic,
relationally-bound community.
Table XI reveals that non-communal loyalty program
members remain very acceptant of competitor overtures (14,
16). Comparable scores on these two statements for
community loyalty program members were either low or
neutral. Thus, there is no evidence that communal members
would be easily lured by competitors. Yet, the lack of
relationship between non-communal loyalty programs and
loyalty does not mean that non-communal members will
Table V Strong negative indicators: communal programs (Factor 1)
2 4 11 I usually do not have positive experiences interacting with
(the organization)
2 4 22 I do not consider myself loyal to the company
2 3 4 My participation in the loyalty program is not meaningful to
me
2 3 13 I do not perceive a strong “sense of community” among the
participants of the loyalty program
2 2 2 I don’t feel as though I am a member of the loyalty program
2 2 8 I am not satisfied with the financial rewards that I receive as
a participant in the loyalty program
2 2 20 I speak unfavorably about the company to others
Table VIII Integration/fulfillment of needs
F1 F2
7 I enjoy the status of being a participant in the loyalty
program
þ 40
8 I am not satisfied with the financial rewards that I receive as
a participant in the loyalty program
2 2 2 2
9 I receive many rewards, other than financial, as a participant
in the loyalty program
þ 4 þ 1
Table VI Membership
F1 F2
1 The loyalty program has a sense of exclusivity associated
with it
þ 30
2 I don’t feel as though I am a member of the loyalty program 2 2 2 1
3 I am similar to other participants in the loyalty program þ 1 þ 1
4 My participation in the loyalty program is not meaningful to
me
2 30
Table IX Shared emotional connections
F1 F2
10 I have positive experiences interacting with other
participants in the loyalty program
þ 2 2 1
11 I usually do not have positive experiences interacting with
(the organization)
2 4 2 4
Table X Sense of community
F1 F2
12 I believe that I am part of a community made up of
participants of the loyalty program
þ 20
13 I do not perceive a strong “sense of community” among
the participants of the loyalty program
2 3 þ 2
Table VII Influence
F1 F2
5 The loyalty program has the ability to influence my
purchase behaviors
þ 2 þ 4
6 I don’t feel that I am influential as a participant in the
loyalty program
2 1 þ 2
Loyalty programs and a sense of community
Mark S. Rosenbaum, Amy L. Ostrom and Ronald Kuntze
Journal of Services Marketing
Volume 19 · Number 4 · 2005 · 222233
227
Downloaded by Southern New Hampshire University At 19:17 05 December 2015 (PT)
simply cease patronizing sponsoring organizations. Non-
communal loyalty program members indicate that the
sponsoring organization is an important part of their life;
ironically, more so than communal loyalty program members
(17, 19). Perhaps, these members patronize their sponsoring
organizations due to factors such as location, price,
assortment, and operating hours, rather than the
opportunity to participate in organizational-sponsored social
activities (18).
The group of statements in Table XII best clarifies the
loyalty outcomes between communal and non-communal
loyalty program members. Non-communal loyalty program
members display a strong willingness to try products or
services from competitors of their sponsoring organizations,
in contrast to communal loyalty program members who
exhibit some resilience from doing so (24). The extreme 2 4
score on statement 22, among communal loyalty program
members, compared to the 2 1 score among non-communal
members, indicates that the former perceive themselves as
being more loyal to their sponsoring organizations compared
to the latter. Lastly, while non-communal loyalty program
members refute the concept of paying more for products and
services in order to buy them from their sponsoring
organizations, communal loyalty programs express some
willingness to do so (23).
Classification schema
The results of Study 1 demonstrate that loyalty programs can
be classified in a two-tiered schema based on members’
perceptions regarding whether or not they obtain a sense of
community, and its related benefits, from membership. As a
result, this study extends the loyalty program literature by
offering a theoretically-based classification schema that
separates loyalty programs into communal and non-
communal programs. Although the sorting patterns reveal
that communal loyalty program members are more loyal to
their sponsoring organizations compared to the non-
communal loyalty program members, the amount of
variance in customer loyalty that can be attributed to a
sense of community needs to be further investigated. The
next study addresses this issue by empirically examining the
relationship between loyalty program members’ sense of
community and customer loyalty.
Study 2 survey
The Q-sort results from Study 1 were used to develop items
for a questionnaire (Aaker et al., 1998). Of the 24 statements
that were used in the Q-sort, the results indicated that six
statements (3, 8, 11, 15, 19, 20) were consensus statements
that did not distinguish between the two factors. The six
statements were disqualified. The 18 remaining statements
were converted into questionnaire items, which were assessed
on a six-point Likert scale anchored by 1 for “strongly
disagree” and by 6 for “strongly agree”. Ten of the items
represented statements that assess a “sense of community”
construct and eight of the items represent statements that
assess resistance to competition and loyalty (Table XIII).
Respondents/validity check
Data for Study 2 were obtained from questionnaires
administered by marketing students at a major Northeastern
University enrolled in an upper-division retailing course.
Students were asked to voluntarily participate in an extra-
credit task of administering five questionnaires to adults, 18
years of age and older, who belonged to a loyalty program.
Most students tapped into their established social networks
for responses, particularly work and family associations. To
ensure the validity of the responses, each respondent was
asked to print his or her name on the questionnaire and to
provide an e-mail address or telephone number. Of the 175
questionnaires received, 22 were excluded due to a lack of an
e-mail or telephone reference. A total of 25 randomly selected
respondents were contacted to assure further that the
questionnaire had been completed in good faith and that
answers were not falsified.
Each respondent was asked to consider a specific loyalty
program to which they currently belong and to indicate the
type of organization that sponsored the program. Although
respondents were able to focus on any loyalty program, a list
of ten communal and non-communal loyalty programs (e.g.
Neiman-Marcus, Macy’s, American Airlines, and Safeway)
were provided to encourage variance in selected loyalty
programs.
Programs sampled
Of the 153 respondents, 50 focused on a grocery store
program, 37 on airlines, 20 on discount stores, ten on
department stores, nine on automobile/motorcycle
manufacturers, eight on restaurants, seven on specialty
stores, and 12 other types of loyalty programs. A total of 45
percent of the respondents were male and 55 percent were
female. The average age of the respondents was in the 31-40
Table XI Resistance to competitor overtures
F1 F2
14 I tend to notice information from other companies that offer
similar products, or services, compared with those offered by
(the organization)
0 þ 3
15 I enjoy life more now as a participant in the loyalty program 0 2 2
16 Competitive information has the ability to encourage me to
try other products or services similar to the kinds offered by
(the organization)
2 1 þ 3
17 The organization that sponsors the loyalty program is not an
important part of my life
0 2 3
18 I am drawn to the social activities that the organization
provides for the participants of its loyalty program
þ 1 2 2
19 There is a perfect match between (the organization) and
myself
0 þ 1
Table XII Loyalty
F1 F2
20 I speak unfavorably about the company to others 2 2 2 4
21 I can’t see ending my relationship with the organization þ 3 þ 2
22 I do not consider myself loyal to the organization 2 4 2 1
23 I would pay more for products or services in order to buy
them from the organization compared with prices at other
organizations
þ 1 2 3
24 I would be willing to try products or services from a
competitor
2 1 þ 4
Loyalty programs and a sense of community
Mark S. Rosenbaum, Amy L. Ostrom and Ronald Kuntze
Journal of Services Marketing
Volume 19 · Number 4 · 2005 · 222233
228
Downloaded by Southern New Hampshire University At 19:17 05 December 2015 (PT)
age category, 50 percent of the respondents indicated that
they were single, 37 percent were married, 10 percent were
divorced, and 3 percent were domestic partnerships. Most of
the respondents indicated that they were Caucasian (80
percent), 5 percent were Hispanic, 10 percent were Asian,
and 5 percent were African-American.
Measures
Sense of community measurement model
To determine the underlying factor structure of the ten “sense
of community” items, statements were subjected to
exploratory factor analysis (principal axis, promax rotation).
For an item to be retained, one of its factor loadings had to be
above 0.50, while all other factor loadings had to be equal to
or below 0.30. One item, statement 5, was removed due to a
low loading. The analysis retained nine items, in one factor,
accounting for 66 percent of the variance. The Cattell’s scree-
test also supported a one-factor solution.
The nine items were then subjected to conformity factor
analysis, using Mplus (Mutchen and Mutchen, 2003). Based
on t-statistics that ranged from 9.38 to 11.79, the
standardized factor loadings for the nine indicator variables
were significant (p , 0:001). The chi-square statistic was
69.77 (df ¼ 27, p , 0:01). The root mean square error of
approximation (RMSEA) was 0.10, the standardized root
mean square residual (SRMR) was 0.04, the comparative fit
index was 0.96, and the Tucker-Lewis Index (TLI) was 0.94.
Overall, the results indicate that there is relatively good fit
Table XIII Items, loadings, means, standard deviations, coefficient alphas
Sense of community Loyalty
Membership
The loyalty program has a sense of exclusivity associated with it 0.64
I don’t feel as though I am a member of the loyalty program
a
0.65
My participation in the loyalty program is not meaningful to me
a
0.70
Influence
I don’t feel that I am influential as a participant in the loyalty program
a
0.52
Integration/fulfillment of needs
I enjoy the status of being a participant in the loyalty program 0.71
I receive many rewards, other than financial, as a participant in the loyalty program 0.58
Shared emotional connections
I have positive experiences interacting with other participants in the loyalty program 0.48
Sense of community
I believe that I am part of a community made up of loyalty program members 0.66
I do not perceive a strong “sense of community” among the participants of the loyalty program
a
0.61
Mean 5 30:01, Standard deviation 5 11:83, Coefficient alpha 5 0:93
Dependent measures: resistance to competitor overtures and loyalty
I tend to notice information from other companies that offer similar products, or services, compared
with those offered by the organization
a
0.70
Competitive information has the ability to encourage me to try other products or services similar to
the kinds offered by the organization
a
0.65
The organization that sponsors the loyalty program is not an important part of my life
a
0.72
I am drawn to the social activities that the organization provides for the participants of its loyalty
program 0.59
I can’t see ending my relationship with the organization 0.76
I do not consider myself loyal to the organization
a
0.85
I would pay more for products or services in order to buy them from the organization compared with
prices at other organizations 0.77
I would be willing to try products or services from a competitor
a
0.82
Mean 5 24:89, Standard deviation 5 9:86, Coefficient alpha 5 0:90
Initial eigenvalue 5.91 4.78
Percentage of variance 66 60
Items that do not distinguish between factors and were excluded from the questionnaire
I am similar to other participants in the loyalty program (3)
I am not satisfied with the financial rewards that I receive as a participant in the loyalty program (8)
I usually do not have positive experiences interacting with the organization (11)
I enjoy life more now as a participant in the loyalty program (15)
There is a perfect match between (the organization) and myself (19)
I speak unfavorably about the company to others (20)
Excluded item due to poor factor loading
The loyalty program has the ability to influence my purchase behaviors (5)
Notes:
a
Denotes recoded items; All questions measured on a six-point scale (1 ¼ Strongly disagree; 6 ¼ Strongly agree)
Loyalty programs and a sense of community
Mark S. Rosenbaum, Amy L. Ostrom and Ronald Kuntze
Journal of Services Marketing
Volume 19 · Number 4 · 2005 · 222233
229
Downloaded by Southern New Hampshire University At 19:17 05 December 2015 (PT)
between the model and the observed data (Hu and Bentler,
1999). A sense of community index was created by summing
the nine items. Cronbach’s alpha coefficient on the index was
0.93, indicating good reliability (Nunnally, 1978).
Resistance to competition/loyalty measures
To determine the underlying factor structure of the eight
resistance/loyalty items, the items were subjected to
exploratory factor analysis (principal axis, promax rotation).
The analysis of the pattern matrix retained the eight items in
one factor; accounting for 60 percent of the variance. The
results of a Cattell’s scree-test supported a one-factor
solution. A loyalty index was then created by summing the
eight items. Cronbach’s alpha coefficient and item-to-total
correlation was used to refine the measure and to eliminate
items whose inclusion resulted in a lower coefficient. The
index coefficient was 0.90, indicating good reliability
(Nunnally, 1978). All items are included in Table XIII.
Relationship between sense of community and loyalty
Linear regression analysis was conducted to evaluate the
prediction of organization loyalty from the sense of
community index. The results reveal that the extent to
which a respondent perceives a sense of community, regarding
his or her loyalty program membership, is a significant
predictor of loyalty to the sponsoring organization (
b
¼ 0:89,
p , 0:001).
Approximately 80 percent of the variance of the loyalty
index was accounted for by its linear relationship with the
sense of community index.
Conclusion
The purpose of this study was to investigate whether members
of communal loyalty programs exhibit a stronger loyalty to
sponsoring organizations compared to members of non-
communal loyalty programs. This goal was achieved in two
manners. First, the results of a Q-technique factor analysis
demonstrated that members of 20 different loyalty programs,
ranging from automobile and motorcycle programs to grocery
stores and lodging, could be classified into two types,
members of communal and non-communal loyalty programs.
This classification schema was based on the extent to which
loyalty program members obtain a sense of community from
their membership (McMillian and Chavis, 1986). Second, the
results of a regression analysis demonstrated that as
respondents obtain a sense of community, via their loyalty
program membership, they exhibit a stronger loyalty to
sponsoring organizations.
Managerial and theoretical implications
The results of this study indicate that members of communal
loyalty programs exhibit a stronger loyalty to sponsoring
organizations compared to members of non-communal loyalty
programs. This pronounced loyalty stems from communal
members receiving non-monetary benefits such as a sense of
exclusive membership and enhanced status. Hence, these
findings substantiate Kopalle and Neslin’s (2003) research
that suggests the importance of consumer benefits in loyalty
programs that are not tied to financial incentives (Lee and
Cunningham, 2001).
The findings also reveal that members of communal loyalty
programs have stronger emotional connections with
sponsoring organizations, and are significantly less
predisposed to switch to competitor products/services than
members of non-communal loyalty programs. Thus, the
secret to customer relationship management, particularly in
loyalty programs is, indeed, as Barnes (2001) claims, “all
about how you make them feel”, as opposed to the too often
used strategy of discounts and pricing schemes (Fournier,
2002).
However, these findings should not be interpreted as a
request for every organization to begin offering members
communal benefits. The Q-sort results indicate that
communal loyalty program members savor intangible
benefits, such as enhanced status and self-competency.
Therefore, many organizations, especially those that offer
“low-involvement” products and services that are habitually
purchased (e.g. groceries, gasoline, dry cleaning) may be
unable to offer program members status, and hence, an
overall sense of community. Accordingly, given the very
nature of many product and service offerings, the majority of
organizations that sponsor price reduction loyalty programs
will most likely not realize the level of enhanced customer
loyalty found in communal programs. This contention is a
particularly important finding for retailers, such as grocery
stores, that have been at the forefront of the loyalty program
expansion in the 1990s.
Non-communal programs still valuable
Managers should also not interpret these results as a call for
organizations to abolish non-communal loyalty programs.
The results demonstrate that although non-communal loyalty
program members do not display passionate loyalty to
sponsoring organizations, they do demonstrate satisfaction
by refraining from spreading negative word-of-mouth and by
considering the sponsoring organization an important part of
their life. Whether or not non-communal loyalty members
would exhibit the same level of satisfaction without program
membership is unknown at this time. However, because non-
communal loyalty program benefits enhance an organization’s
value proposition (O’Brien and Jones, 1995), revoking these
programs may be financially deleterious to airlines, hotels,
retail stores, and to car rental firms who typically sponsor
these programs. Perhaps, non-communal loyalty program
membership aids in helping customers retain some type of
permanent bond, albeit financial, to sponsoring organizations.
Researchers should explore these questions more in depth.
In terms of implications for organizations that sponsor
communal programs, results reveal that program members
relish intangible rewards, such as feelings of membership and
status, more so than tangible rewards, such as social activities
with program members and expensive gifts/prizes. As a result,
organizations that sell status-oriented products or services
may not necessarily need to offer their loyalty program
members costly discounts and premiums in order to realize
enhanced customer loyalty. Rather, organizations may be able
to reap loyalty benefits by simply offering customers the
opportunity to participate in programs that members perceive
as being exclusive to them.
Future directions
It is worth noting that researchers have suggested that
customers’ desire to participate in product or brand
communities represents a desire to return to the gemeinschaft
(Muniz and O’Guinn, 2001; Tonnies, 1957) or a time in
society when relationships between people were perceived as
Loyalty programs and a sense of community
Mark S. Rosenbaum, Amy L. Ostrom and Ronald Kuntze
Journal of Services Marketing
Volume 19 · Number 4 · 2005 · 222233
230
Downloaded by Southern New Hampshire University At 19:17 05 December 2015 (PT)
more strong and genuine. Yet, membership in loyalty
programs that espouse exclusivity and status are not
characteristic of the Gemeinschaft, but rather, are
characteristic of the Gesellschaft,orthestateof
contemporary society, in which relationships between
individuals remain transitory and superficial. Researchers
may wish to further explore whether consumers’ desire to
participate in brand communities stems from a need for
togetherness or a need for segregation.
The theoretical contributions of this study include the
integration of the theory of sense of community (McMillian
and Chavis, 1986) into the marketing literature and offering
researchers a nine-item, unidimensional sense of community
scale (see Table XIII). Although community researchers have
developed a sense of community scale based on individuals’
perceptions regarding their residential community, this study
represents the first attempt to apply the theory to a non-
geographically-bound community (Muniz and O’Guinn,
2001). Future research can utilize the scale to further
explore the antecedents and consequences of a sense of
community. For example, research could examine the
possibility that a sense of community is an antecedent of
McAlexander et al.’s (2002) community integration construct.
Overall, this study clarifies some of the confusion in the
literature regarding the efficacy of loyalty programs by
positing that a positive relationship exists between a
member’s sense of community and loyalty. Future research
may wish to further dissect the rational elements of cost
benefits from the more emotional benefits of status and
exclusivity in loyalty programs. Further research is also
necessary to discover if these findings are limited to the USA,
or can be extrapolated to the global marketplace (Duffy,
1998). Finally, due to the nature of the data, service loyalty
programs were not analyzed separately from product-based
loyalty programs. As a result, service/retail organizations may
wish to further explore the impact of a sense of community on
customer loyalty. In any case, the results of this study help to
clarify our understanding regarding the efficacy of loyalty
programs and bridges the brand community and loyalty
program literature.
References
Aaker, D., Kumar, V. and Day, G.S. (1998), Marketing
Research, Wiley, New York, NY.
Arnould, E.J. and Price, L. (2000), “Authenticating acts and
authoritative performances”, in Ratneshwar, S., Mick, D.G.
andHuffman,C.(Eds),The Why of Consumption,
Routledge, New York, NY, pp. 140-63.
Aubert-Gamet, V. and Cova, B. (1999), “Servicescapes: from
modern non-places to postmodern commonplaces”, Journal
of Business Research, Vol. 44 No. 1, pp. 37-45.
Barnes, J.G. (2001), Secrets of Customer Relationship
Management: It’s All about How You Make Them Feel,
McGraw-Hill, New York, NY.
Belk, R.W. (1988), “Possessions and the extended self ”,
Journal of Consumer Research, Vol. 15, September,
pp. 139-68.
Bolton, R.B., Kannan, P.K. and Bramlett, M.D. (2000),
“Implications of loyalty program membership and service
experiences for customer retention and value”, Journal of
the Academy of Marketing Science, Vol. 28 No. 1, pp. 95-108.
Brown, S.R. (1971), “The forced-free distinction in Q
technique”, Journal of Educational Measurement, Vol. 8,
pp. 283-7.
Brown, S.R. (1980), Political Subjectivity, Yale University
Press, New Haven, CT.
Cigliano, J., Georgiadis, M., Pleasance, D. and Whalley, S.
(2000), “The price of loyalty”, McKinsey Quarterly, Vol. 13,
pp. 68-77.
Cooley, S. (2002), “Loyalty strategy development using
applied member-cohort segmentation”, Journal of Consumer
Marketing, Vol. 19 No. 7, pp. 550-63.
Cova, B. (1997), “Community and consumption”, European
Journal of Marketing, Vol. 31 No. 3, pp. 297-316.
Davidson, W.B. and Cotter, P.R. (1986), “Measurement of
sense of community within the sphere of city”, Journal of
Applied Social Psychology, Vol. 16 No. 7, pp. 608-19.
Divett, M., Crittenden, N. and Henderson, R. (2003),
“Actively influencing consumer loyalty”, Journal of
Consumer Marketing, Vol. 20 No. 2, pp. 109-26.
Dowling, G.R. and Uncles, M. (1997), “Do customer loyalty
programs really work”, Sloan Management Review, Vol. 38,
pp. 71-81.
Duffy, D.L. (1998), “Customer loyalty strategies”, Journal of
Consumer Marketing, Vol. 15 No. 5, pp. 435-48.
Fournier, S. (2002), “Book review: Secrets of Customer
Relationship Management: It’s All about How You Make
Them Feel, by James G. Barnes”, Journal of Services
Marketing, Vol. 16 No. 7, pp. 700-3.
Grove, S.J., Fisk, R.P. and John, J. (2003), “The future of
services marketing: forecasts from ten services marketing
experts”, Journal of Services Marketing, Vol. 17 No. 2,
pp. 107-21.
Hair, J.F. Jr and Black, W.C. (2000), “Cluster analysis”,
in Grimm, L.G. and Yarnold, P.R. (Eds), Reading and
Understanding More Multivariate Statistics,American
Psychological Association, Washington, DC, pp. 147-205.
Hu, L.-T. and Bentler, P.M. (1999), “Cut-off criteria for fit
indices in covariance structure analysis: conventional
criteria versus new alternatives”, Structural Equation
Modeling, Vol. 6 No. 1, pp. 1-55.
Kerlinger, F.N. (1986), Foundations of Behavioral Research,
Holt, Rinehart and Winston, New York, NY.
Kivetz, R. and Simonson, I. (2002), “Earning the right to
indulge: effort as a determinant of customer preferences
toward frequency program rewards”, Journal of Marketing
Research, Vol. 39, May, pp. 155-70.
Kleine, S., Kleine, R.E. III and Allen, C.T. (1995), “How is a
possession me or not me? Characterizing types of an
antecedent of material possession attachment”, Journal of
Consumer Research, Vol. 22 No. 3, pp. 327-43.
Kopalle, P.K. and Neslin, S.A. (2003), “The economic
viability of frequency reward programs in a strategic
competitive environment”, Review of Marketing Science,
Vol. 1, pp. 1-39.
Lee, M. and Cunningham, L.F. (2001), “A cost/benefit
approach to understanding service loyalty”, Journal of
Services Marketing, Vol. 15 No. 2, pp. 113-30.
Liebermann, Y. (1999), “Membership clubs as a tool for
enhancing buyers’ patronage”, Journal of Business Research,
Vol. 45 No. 3, pp. 291-7.
McAlexander, J.A., Schouten, J.W. and Koenig, H.F. (2002),
“Building brand community”, Journal of Marketing, Vol. 66
No. 1, pp. 38-54.
Loyalty programs and a sense of community
Mark S. Rosenbaum, Amy L. Ostrom and Ronald Kuntze
Journal of Services Marketing
Volume 19 · Number 4 · 2005 · 222233
231
Downloaded by Southern New Hampshire University At 19:17 05 December 2015 (PT)
McIlroy, A. and Barnett, S. (2000), “Building customer
relationships: do discount cards work?”, Managing Service
Quality, Vol. 10 No. 6, pp. 347-55.
McKeown, B. and Thomas, D. (1988), Q Methodology, Sage,
Newbury Park, CA.
McMillian, D.W. (1996), “Sense of community”, Journal of
Community Psychology, Vol. 24 No. 4, pp. 315-25.
McMillian, D.W. and Chavis, D.M. (1986), “Sense of
community: a definition and theory”, Journal of
Community Psychology, Vol. 14 No. 1, pp. 6-23.
Merriman, A. (2001), “Rules to market by”, Marketing News,
Vol. 35, p. 12.
Muniz, A.M. Jr and O’Guinn, T.C. (2001), “Brand
community”, Journal of Consumer Research, Vol. 27 No. 4,
pp. 412-32.
Mutchen, L.K. and Mutchen, B.O. (2003), Mplus Users’
Guide, 2nd ed., Mutchen & Mutchen, Los Angeles, CA.
Nunnally, J.C. (1978), Psychometric Theory, McGraw-Hill,
New York, NY.
O’Brien, L. and Jones, C. (1995), “Do rewards really create
loyalty?”, Harvard Business Review, Vol. 73, May-June,
pp. 75-82.
Oliver, R.L. (1999), “Whence consumer loyalty?”, Journal of
Marketing, Vol. 63, special issue, pp. 33-44.
Palmer, A., McMahon-Beattie, U. and Beggs, R. (2000),
“Influences on loyalty programme effectiveness: a
conceptual framework and case study investigation”,
Journal of Strategic Marketing, Vol. 8 No. 1, pp. 47-66.
Roehm, M.L., Pullins, E.B. and Roehm, H.A. (2002),
“Designing loyalty-building programs for packaged goods
brands”, Journal of Marketing Research, Vol. 39 No. 3,
pp. 202-13.
Schmolck, P. and Atkinson, J. (2002), “PQMethod (version
2.11)”, available at: www.rz.unibw-muenchen.de/ , p41bsmk/
qmethod/
Schouten, J.W. and McAlexander, J.H. (1995), “Subcultures
of consumption: an ethnography of the new bikers”, Journal
of Consumer Research, Vol. 22, June, pp. 43-61.
Sharp, B. and Sharp, A. (1997), “Loyalty programs and their
impact on repeat-purchase loyalty patterns”, International
Journal of Research in Marketing, Vol. 14 No. 5, pp. 473-86.
Smith, A., Sparks, L., Hart, S. and Tzokas, N. (2003),
“Retail loyalty schemes: results from a consumer diary
study”, Journal of Retailing and Consumer Services, Vol. 10
No. 2, pp. 109-19.
Stephenson, W. (1953), The Study of Behavior, University of
Chicago Press, Chicago, IL.
Thompson, B. (2000), “Q-technique factor analysis”, in
Grimm, L.G. and Yarnold, P.R. (Eds), Reading and
Understanding More Multivariate Statistics,American
Psychological Association, Washington, DC, pp. 207-26.
Tonnies, F. (1957), Community and Society, (original work
published in 1887 under the title Gemeinschaft und
Gesellschaft), The Michigan State University Press, East
Lansing, MI.
Yi, Y. and Jeon, J. (2003), “Effects of loyalty programs on
value perception, program loyalty, and brand loyalty”,
Journal of the Academy Science, Vol. 3, pp. 229-40.
Executive summary and implications for
managers and executives
This summary has been provided to allow managers and executives
a rapid appreciation of the content of this article. Those with a
particular interest in the topic covered may then read the article in
toto to take advantage of the more comprehensive description of the
research undertaken and its results to get the full benefits of the
material present.
Loyalty programs offer consumers incentives in return for
repeat business. The benefits include, for example, monetary
discounts, the ability to join customer clubs, organizational
newsletters or prizes. Some 70 percent of consumers take part
in organization-sponsored loyalty programs. However, even
though organizations have placed much importance on
improving customer loyalty via loyalty program membership,
defection rates among satisfied customers, who are presumed
to be a firm’s most loyal customers, remain as high as 90
percent.
Research findings outside the loyalty program literature
suggest, however, that organizations that promote social
interaction among customers realize enhanced customer
loyalty. For example, customers who take part in brand
communities such as Camp Jeep, HOG (Harley-Davidson)
rallies, Saturn homecomings or Winnebago clubs often
exhibit extremely loyalty to the sponsoring organizations.
Marketing researchers have not, to date, considered
organization-sponsored brand communities as loyalty
programs. But Rosenbaum et al. extend the concept of
loyalty programs to include any organization-sponsored
program that attempts to build customer loyalty by
transferring support from the organization to program
members.
Communal and non-communal loyalty programs
The authors define communal loyalty programs as
organization-sponsored loyalty programs that transfer
support from organizations to members by providing them
with a sense of community. (These differ from membership-
created social clubs or internet sites that are not sanctioned by
the sponsoring organization.) Non-communal loyalty
programs, in contrast, transfer support from organizations
to members by providing them with financial benefits, such as
monetary discounts on present or future purchases.
Non-communal loyalty programs are more common than
common than communal loyalty programs and are often
sponsored by organizations such as grocery stores and airlines.
Communal loyalty programs, in contrast, are more likely to be
offered by luxury and higher involvement brands such as car
manufacturers and speciality retailers. Communal loyalty
programs often require hefty financial investments of the
consumer, enhance member status or promote member
interaction. Non-communal loyalty programs, in contrast, are
typically free of charge and available to all customers.
Research by Rosenbaum et al. confirms that members of
communal loyalty programs show a stronger loyalty to
sponsoring organizations than do members of non-
communal loyalty programs. This pronounced loyalty stems
from communal members receiving non-monetary benefits
such as a sense of exclusive membership and enhanced status.
The research also reveals that members of communal loyalty
Loyalty programs and a sense of community
Mark S. Rosenbaum, Amy L. Ostrom and Ronald Kuntze
Journal of Services Marketing
Volume 19 · Number 4 · 2005 · 222233
232
Downloaded by Southern New Hampshire University At 19:17 05 December 2015 (PT)
programs have stronger emotional connections with
sponsoring organizations and are significantly less
predisposed to switch to competitor products or services
than are members of non-communal loyalty programs.
Different programs suit different circumstances
Rosenbaum et al. warn, however, that it would be unwise for
all types of organization to begin offering members communal
benefits. Communal loyalty program members savor
intangible benefits, such as enhanced status. These benefits
do not translate to “low involvement” products and services
that are habitually purchased, such as groceries and petrol.
Accordingly, given the very nature of many product and
service offerings, the majority of organizations that sponsor
price-reduction loyalty programs will most likely not realize
the level of enhanced customer loyalty found in communal
programs.
Nor should managers interpret the results as a call for
organizations to abolish non-communal loyalty programs.
Although non-communal loyalty program members do not
display passionate loyalty to sponsoring organizations, they do
demonstrate satisfaction by refraining from spreading negative
word-of-mouth and by considering the sponsoring
organization an important part of their life. Whether or not
non-communal loyalty members would show the same level of
satisfaction without program membership is currently
unknown. Non-communal loyalty program benefits enhance
an organization’s value proposition, so revoking these
programs may be harmful. Non-communal loyalty program
membership may help customers to retain some type of
permanent bond, albeit financial, to sponsoring organizations.
Members of communal loyalty programs relish intangible
rewards, such as feelings of membership and status, more
than tangible rewards, such as social activities with program
members and expensive gifts or prizes. As a result,
organizations that sell status-orientated products or services
may not need to offer their loyalty program members costly
discounts and premiums in order to realize enhanced
customer loyalty. Rather, organizations may be able to reap
loyalty benefits simply by offering customers the chance to
take part in programs that members perceive as being
exclusive to them.
(A pre
´
cis of the article “Loyalty programs and a sense of
community”. Supplied by Marketing Consultants for Emerald.)
Loyalty programs and a sense of community
Mark S. Rosenbaum, Amy L. Ostrom and Ronald Kuntze
Journal of Services Marketing
Volume 19 · Number 4 · 2005 · 222233
233
Downloaded by Southern New Hampshire University At 19:17 05 December 2015 (PT)
This article has been cited by:
1. Matthias Bernhard Schulten, Fabian Schaefer. 2015. Affective commitment and customer loyalty in crowdsourcing: antecedents,
interdependencies, and practical implications. The International Review of Retail, Distribution and Consumer Research 1-13.
[CrossRef]
2. Justin Beneke, Simona de Sousa, Marcelle Mbuyu, Bradley Wickham. 2015. The effect of negative online customer reviews on
brand equity and purchase intention of consumer electronics in South Africa. The International Review of Retail, Distribution
and Consumer Research 1-31. [CrossRef]
3. Jin-Soo Lee, Nelson Tsang, Steve Pan. 2015. Examining the differential effects of social and economic rewards in a hotel loyalty
program. International Journal of Hospitality Management 49, 17-27. [CrossRef]
4. Craig C. Julian, Zafar U. Ahmed, Che Aniza Binti Che Wel, Jamil Bojei. 2015. Discriminant Analysis of Antecedents of Customer
Retention in Malaysian Retailing. Journal of Transnational Management 20, 190-204. [CrossRef]
5. Kahlil S. Philander, Carola Raab, Orie Berezan. 2015. Understanding Discount Program Risk in Hospitality: A Monte Carlo
Approach. Journal of Hospitality Marketing & Management 1-20. [CrossRef]
6. Catherine Prentice, IpKin Anthony Wong. 2015. Casino marketing, problem gamblers or loyal customers?. Journal of Business
Research . [CrossRef]
7. Jun Kang, Thomas Brashear Alejandro, Mark D. Groza. 2015. Customer–company identification and the effectiveness of loyalty
programs. Journal of Business Research 68, 464-471. [CrossRef]
8. Jason Flores, Arturo Z. Vasquez-Parraga. 2015. The impact of choice on co-produced customer value creation and satisfaction.
Journal of Consumer Marketing 32:1, 15-25. [Abstract] [Full Text] [PDF]
9. Ke-ji Wang, Ming-li Zhang, Qing-min KongResearch on basic forms and distribution of relationship benefits in customer loyalty
programs: Based on relational bonds 102-107. [CrossRef]
10. Sabine Fliess, Stefan Dyck, Mailin Schmelter. 2014. Mirror, mirror on the wall – how customers perceive their contribution to
service provision. Journal of Service Management 25:4, 433-469. [Abstract] [Full Text] [PDF]
11. Chien-Lung Hsu, Yi-Chuan Liao. 2014. Exploring the linkages between perceived information accessibility and microblog
stickiness: the moderating role of sense of community. Information & Management . [CrossRef]
12. Henning Kreis, Alexander Mafael. 2014. The influence of customer loyalty program design on the relationship between customer
motives and value perception. Journal of Retailing and Consumer Services 21, 590-600. [CrossRef]
13. Cosimo Talò, Terri Mannarini, Alessia Rochira. 2014. Sense of Community and Community Participation: A Meta-Analytic
Review. Social Indicators Research 117, 1-28. [CrossRef]
14. Stephanie M. Noble, Carol L. Esmark, Charles H. Noble. 2014. Accumulation versus instant loyalty programs: The influence
of controlling policies on customers' commitments. Journal of Business Research 67, 361-368. [CrossRef]
15. Lijia (Karen) Xie, Chih-Chien Chen. 2014. Hotel loyalty programs: how valuable is valuable enough?. International Journal of
Contemporary Hospitality Management 26:1, 107-129. [Abstract] [Full Text] [PDF]
16. Z Nadiah, S Talib, M FaizThe influence of reward criteria towards the effectiveness of loyalty program in Kopitiam restaurant
271-274. [CrossRef]
17. Chung-Chu Liu, Jason C.H. Chen. 2013. Using Q methodology to explore user’s value types on mobile phone service websites.
Expert Systems with Applications 40, 5276-5283. [CrossRef]
18. Mark S. Rosenbaum, Carolyn Massiah, Richard Wozniak. 2013. An exploratory analysis of social commonalities and subjective
discounts. International Journal of Retail & Distribution Management 41:9, 671-687. [Abstract] [Full Text] [PDF]
19. Mekhail Mustak, Elina Jaakkola, Aino Halinen. 2013. Customer participation and value creation: a systematic review and research
implications. Managing Service Quality: An International Journal 23:4, 341-359. [Abstract] [Full Text] [PDF]
20. Martin Fraering, Michael S. Minor. 2013. Beyond loyalty: customer satisfaction, loyalty, and fortitude. Journal of Services
Marketing 27:4, 334-344. [Abstract] [Full Text] [PDF]
21. Karen L. Xie, Chih-Chien Chen. 2013. Progress in Loyalty Program Research: Facts, Debates, and Future Research. Journal of
Hospitality Marketing & Management 22, 463-489. [CrossRef]
22. Jamil Bojei, Craig C. Julian, Che Aniza Binti Che Wel, Zafar U. Ahmed. 2013. The empirical link between relationship marketing
tools and consumer retention in retail marketing. Journal of Consumer Behaviour 12:10.1002/cb.v12.3, 171-181. [CrossRef]
23. Yookyung Hwang. 2013. The Effect of Luxury Fashion Brand Customer Equity Drivers on Customer Loyalty - Differences
among Segmented Markets based on Purchasing Patterns -. Fashion & Textile Research Journal 15, 219-230. [CrossRef]
Downloaded by Southern New Hampshire University At 19:17 05 December 2015 (PT)
24. IpKin Anthony Wong. 2013. Exploring customer equity and the role of service experience in the casino service encounter.
International Journal of Hospitality Management 32, 91-101. [CrossRef]
25. Blanca García-Gómez, Ana Maria Gutiérrez-Arranz, Jesús Gutiérrez-Cillán. 2012. Exploring the influence of three types of
grocery retailer loyalty programs on customer affective loyalty. The International Review of Retail, Distribution and Consumer
Research 22, 547-561. [CrossRef]
26. Matilda Dorotic, Tammo H.A. Bijmolt, Peter C. Verhoef. 2012. Loyalty Programmes: Current Knowledge and Research
Directions*. International Journal of Management Reviews 14:10.1111/ijmr.2012.14.issue-3, 217-237. [CrossRef]
27. Fazlul K. Rabbanee, B. Ramaseshan, Chen Wu, Amy Vinden. 2012. Effects of store loyalty on shopping mall loyalty. Journal
of Retailing and Consumer Services 19, 271-278. [CrossRef]
28. Dagmar Abfalter, Melanie E. Zaglia, Julia Mueller. 2012. Sense of virtual community: A follow up on its measurement. Computers
in Human Behavior 28, 400-404. [CrossRef]
29. Nor Asiah Omar, Rosidah Musa. 2011. Measuring service quality in retail loyalty programmes (LPSQual). International Journal
of Retail & Distribution Management 39:10, 759-784. [Abstract] [Full Text] [PDF]
30. Conor M. Henderson, Joshua T. Beck, Robert W. Palmatier. 2011. Review of the theoretical underpinnings of loyalty programs.
Journal of Consumer Psychology 21, 256-276. [CrossRef]
31. Byung-Sook Hong, Eun-Jin Lee, Sung-Hee Park, Seung-Hee Yoo. 2010. The Effects of Department Store Loyalty Programs
on Consumer Relationship Quality and Relationship Continuity Intention. Journal of the Korean Society of Clothing and Textiles
34, 1621-1631. [CrossRef]
32. Patrick Vesel, Vesna Zabkar. 2010. Relationship quality evaluation in retailers' relationships with consumers. European Journal
of Marketing 44:9/10, 1334-1365. [Abstract] [Full Text] [PDF]
33. Mark S. Rosenbaum, IpKin Anthony Wong. 2009. Modeling customer equity, SERVQUAL, and ethnocentrism: a Vietnamese
case study. Journal of Service Management 20:5, 544-560. [Abstract] [Full Text] [PDF]
34. Verena Vogel, Heiner Evanschitzky, B Ramaseshan. 2008. Customer Equity Drivers and Future Sales. Journal of Marketing 72,
98-108. [CrossRef]
35. Maria Sicilia, Mariola Palazón. 2008. Brand communities on the internet. Corporate Communications: An International Journal
13:3, 255-270. [Abstract] [Full Text] [PDF]
36. René Algesheimer, Călin Gurău. 2008. Introducing structuration theory in communal consumption behavior research. Qualitative
Market Research: An International Journal 11:2, 227-245. [Abstract] [Full Text] [PDF]
37. Won Jae Seo, B. Christine Green, Yong Jae Ko, Seunghwan Lee, Jarrod Schenewark. 2007. The Effect of Web Cohesion, Web
Commitment, and Attitude toward the Website on Intentions to Use NFL Teams’ Websites. Sport Management Review 10,
231-252. [CrossRef]
38. Pedro Reinares Lara, Jesús García de Madariaga. 2007. The importance of rewards in the management of multisponsor loyalty
programmes. Journal of Database Marketing & Customer Strategy Management 15, 37-48. [CrossRef]
39. Jennifer Rowley. 2007. Reconceptualising the strategic role of loyalty schemes. Journal of Consumer Marketing 24:6, 366-374.
[Abstract] [Full Text] [PDF]
40. Bernard Cova, Stefano Pace. 2006. Brand community of convenience products: new forms of customer empowerment – the case
“my Nutella The Community”. European Journal of Marketing 40:9/10, 1087-1105. [Abstract] [Full Text] [PDF]
41. Kristen Bell DeTienne, Aaron BroughA Model of Profitable Service Recovery 49-72. [CrossRef]
Downloaded by Southern New Hampshire University At 19:17 05 December 2015 (PT)
... Several influential studies elaborate on the benefits of LPs and their influence on satisfaction and usage (Dowling & Uncles, 1997;Mimouni-Chaabane & Volle, 2010;Rosenbaum et al., 2005;So et al., 2015). However, the relevancy of those benefits in a CMLP context has not been pondered in detail yet. ...
... Since the points earned do not have material value until they are redeemed, consumers seek value elsewhere as well. Thus, LPs try to utilize soft, intangible, and psychological benefits (e.g., exclusivity, special treatment, sense-of-belonging, and social status cues) to establish a sense-of-belonging, gratitude, recognition, and prestige (Buttle & Maklan, 2015;Dorotic et al., 2012;Henderson et al., 2011;Mimouni-Chaabane & Volle, 2010;Rosenbaum et al., 2005). ...
Article
Full-text available
This study, based on value theory, aims to shed light on our understanding of changing consumer perspectives on loyalty programs (LPs) within the digitally transformed retail environment by assessing the significance of value perceptions (i.e., monetary, hedonic, symbolic, knowledge) provided by LP benefits on member satisfaction. The value theory was expanded with the addition of personalization and information disclosure comfort constructs in accordance with the literature on mobile application adoption. The results of an online survey study on two leading coalition LPs in Turkey indicate that the monetary, hedonic, and symbolic values established by LP benefits are positively related to satisfaction. Furthermore, personalization was found to be a major factor that indirectly influences satisfaction through different perceptions of value. Privacy concerns, on the other hand, were found to have a significant but weak influence on satisfaction. Finally, the well-established effect of satisfaction on attitudinal loyalty was also confirmed.
... Participation of customers in the creation of market offering and value enhance customer satisfaction and better performance of firms or supply systems. By co-creating, sellers receive inputs for new offerings (Mustak, Jaakkola, & Halinen, 2013;Saarijärvi, Kannan, & Kuusela, 2013); are able to customize their offerings (Prahalad & Ramaswamy, 2004a); enhance customer loyalty (Rosenbaum, Ostrom, & Kuntze, 2005); increase customer trust (Dabholkar & Sheng, 2012) and customer satisfaction (Grönroos, 2008). Co-creation also enhances new product development (Hoyer, Chandy, Dorotic, Krafft, & Singh, 2010). ...
... By co-creating, sellers receive inputs: for new offerings (Mustak et al., 2013;Saarijärvi et al., 2013), to customize their offerings (Prahalad & Ramaswamy, 2004a), to enhance customer loyalty (Rosenbaum et al., 2005), to increase trust (Dabholkar & Sheng, 2012), to enhance satisfaction (Grönroos, 2008), and for new product development (Hoyer et al., 2010). ...
Thesis
Full-text available
High quality seed is the basis for the sustainable increase of agricultural production and reduction of poverty. However, there is a substantial gap between the production of and farmers demand for seeds in Ethiopia. Yet, we do not sufficiently understand the mismatch between supply and demand for seed. One important reason is the lack of or the limited systematic studies on market orientation (MO) and performance in complex chains (seed supply systems) in D&E markets. The thesis argues that lessons on how to adapt MO to seed supply value chain functions can be draw from value chain actors and farmer customers in D&E market contexts. In doing so, the thesis identifies from a structural and end customer perspective, the strengths and weakness of different agricultural seed supply chains and functions for potential improvements. This will ensure the development of a more market-oriented seed supply chains that can respond to the expressed and latent needs of their customers. This will in turn boost agricultural production and productivity, enhanced food security, and reduction of poverty among large segments of a growing population. Effective seed systems enhance customer satisfaction and superior performance for firms. However, effectiveness and efficiency will come from the extent to which the functions are performed in a market-oriented way across the different stages of a seed value chain. MO contributes to effective seed systems, but measures for the MO of functions do not exist. Measuring the MO of seed systems is also difficult because measures of MO may not be comparable across functions and different perspectives. In doing so the thesis contributes to the literature gap on measuring supply systems by using the theoretical framework of MO from the perspectives of all channel actors and the end customers. More specifically, empirical evidence on how MO is applicable to and increases performance for seed supply systems in D&E markets is absent. The general aim of this thesis is to deepen the understanding of the implementation of MO in agricultural seed supply chains in D&E economies, taking Ethiopian seed supply chains as a case. To achieve the general objective of the study, this thesis explored four lines of empirical research: (1) How do end customers evaluate the performance of the Ethiopian seed supply systems? (2) What is the influence of market channel functions on customer satisfaction with supply chains? (3) What is the degree of MO of the Ethiopian seed supply chains? and (4) How does MO influence the proficiency of supply chains? To answer question 1, Chapter 3 offered a detailed understanding of the criteria that farmers use to evaluate the performance of the Ethiopian maize and teff seed supply systems. The chapter revealed that in the Ethiopian seed system context the customer performance measures are categorized into seven major themes for maize and eight for teff. For farmer customers, the key evaluation criteria are that the seed supply systems deliver seed (1) of the right variety, (2) at the right quality, (3) easily available, (4) in the right quantity, (5) at an affordable price, (6) with adequate supporting services, (7) with limited production uncertainty, and specific to teff, (8) with an appreciation of cultural heritage. Chapter 4 presented the results of a quantitative study with 170 end customers for deeper understanding and analysis of the influence of market channel functions proficiency on the customer satisfaction with supply chains for maize, teff, and beans in three regions of Ethiopia. Six key functions that contribute to customer satisfaction were identified, which together can be grouped as (a) the R&D, (b) the multiplication, (c) the quality control and certification, (d) the distribution, (e) the pricing, and (f) the marketing service function. The results show that the seed multiplication function followed by distribution, R&D, price, marketing service, and quality control and certification functions predominately contribute to the end customer overall satisfaction of seed offers. The chapter further revealed the dominant value chain constellations in Ethiopian seed supply chains. It identified 43 unique value chain constellations, in the data: 16 for maize, 18 for teff and 9 for beans. The chapter presented an inventory of which value chain constellations have emerged/survived and analyzed why in terms of (a) overall perceived satisfaction with these constellations and (b) perceived proficiency with the marketing functions performed by the actors involved. Chapter 5 focused on how MO is best measured in the Ethiopian seed supply system context building on insights from MO theory. The chapter adapted the specific MO components (information generation, information dissemination, and responsiveness) at the level of each market channel function performed within seed supply systems. It explored MO of supply chains (maize, teff, and beans) from four perspectives: (1) the organization performing a function, (2) customers, (3) suppliers, and (4) the final customers. This chapter revealed that in the Ethiopian seed supply chain context the degree of MO differs between functions, crops, and perspectives. Chapter 6 examined the MO- proficiency relationship in the Ethiopian seed supply chains context. The study confirms that MO has a positive influence on the proficiency of seed supply value chain functions. However, the strength of the relationship differs between the various functions, crops, and perspectives. Thus, MO of seed supply chains is very important for superior performance of firms and a strong basis for the livelihood of farmer customers. Finally, Chapter 7 synthesizes the results of the preceding chapters, draws main conclusions, and discuss the implications for theory, seed supply chains, policy makers and development partners. In general, this thesis shows that understanding customer satisfaction criteria and implementation of MO across value chain functions can indeed improve the performance of the different seed supply chains. The goal of development organizations and policy makers is to increase food security and livelihood by increasing agricultural productivity. In doing so, the thesis shows ways on how this goal can be achieved: improving proficiency of market channel functions and increasing the MO of supply chain actors.
... In sum, costumers may become spoke person to specific brands (Albert, Merunka, and Valette-Florence 2013). Brand advocacy and brand loyalty are considered to be the significant outcomes of consumer brand identification (Rosenbaum, Ostrom, and Kuntze 2005). Fullerton (2005) suggested that attitudinal brand loyalty is often associated with brand via social media. ...
Article
The aim of this paper is to study the concept of brand love among Indonesian youths. According to triangular theory of love, there is a three dimensional of brand love. Further, the study uncover the relationship between variables used in this research as well as provide the theoretical framework for revealing the concept of wearing casual apparels. Additionally, this empirical research employed 88 respondents for gathering the data requirements. This study employs SEM AMOS in order to analyze the data. These exploratory result indicates that the concept of brand love in Indonesia is affected by several constructs called brand passion, brand intimacy, social media use, purchase intention, and brand advocacy. These findings generate the possibility for future research into brand love using the concept of triangular theory of love in order to gather deeper understanding how the changes in the perceptions of self-influence the brand love.
... Sense of Virtual Community Koh and Kim [27] suggest the following as the components of sense of virtual community (SOVC): (i) Membership -the feel of belonging to an online community [28] (ii) Influence -making a change in their virtual community; other people's perception of the community impact and how community influences the community, (iii) Immersion -refers to how the beginning of the humancomputer interaction flow dominates. According to [27], flow is defined by the holistic sensation experienced by the total involvement of people's acts. ...
Firms make large investments in loyalty programs (LPs) to build customer relationships with customer loyalty as one of their primary goals. Despite the popularity of LPs, their effectiveness is questioned and the subject of academic debates in relation to outcomes such as profitability. Moreover, extant research has not investigated if customers engage with LPs through LP perceived value and how LP engagement improves LP loyalty, brand loyalty, and customer engagement (CE) with the company brand. This study examines, from a consumer-centric behavioral perspective, LP engagement (LPE) behavior, and how LPE behavior impacts brand and LP loyalty, as well as CE. We introduce LPE behavior, a relatively new concept, in the form of a multi-dimensional set of hierarchically-ordered dimensions. We show a differentiated view of the relationship between the antecedents of brand loyalty as well as LP loyalty and CE. External, convergent and discriminant validity are confirmed by testing our model with a representative sample (n = 593) of the U.S. LP population with participants being members of either a grocery retail chain, department store chain, or airline frequent flyer LP. We show that perceived LP value engages customers with LPs. Subsequently, LPE behavior improves LP loyalty and brand loyalty as well as CE with the company brand.
Article
Full-text available
z Konaklama işletmelerinde değer oluşmasını sağlayan müşteri katılımı kavramı, müşterilerin hizmet üretim ve sunum süreçlerine dâhil olması olarak ifade edilmektedir (Bendapudi ve Leone, 2003). Müşteri perspektifinden öznel olarak da değerlendirilebilen bu kavramın algılanan risk, algılanan değer ve müşteri sadakati ile ilişkisi bulunmaktadır. Bu bağlamda çalışmanın amacını, konaklama hizmeti alan müşterilerin satın aldıkları hizmete ilişkin algıladıkları riskin, müşteri katılımı üzerindeki, müşteri katılımının ise müşterilerin aldıkları hizmete ilişkin algıladıkları değer ve sadakat düzeyleri üzerindeki etkilerini belirlemek oluşturmaktadır. Çalışmanın ana kütlesini Türkiye'de yaşayan, turizm ve konaklama hizmeti almış tüm bireyler oluşturmaktadır. Çalışmada "Algılan Risk", "Algılanan Değer", "Müşteri Sadakati" ve "Müşteri Katılımı" ölçekleri kullanılmıştır. Veriler, kolayda örneklemi yöntemiyle konaklama hizmeti alan müşterilerden (202) toplanmıştır. Yapısal model oluşturulmuş ve kısmi en küçük kareler yöntemi ile test edilmiştir. Çalışmanın sonuçlarına göre; algılanan risk müşteri katılımını, müşteri katılımı algılanan değeri ve müşteri katılımı müşteri sadakatini pozitif yönde etkilemektedir. Abstract The concept of customer participation, which creates value in hospitality business, is expressed as the inclusion of customers in service production and delivery process (Bendapudi and Leone, 2003). This concept, which can be evaluated subjectively from the customer perspective has a relationship with perceived risk, perceived value and customer loyalty. In this context, the purpose of the study is to determine the effects of the risk perceived by customers who receive hospitality services regarding the service they purchase on customer participation and the effects of customer participation on the perceived value and loyalty levels of customers regarding the service they receive. The
Article
Purpose Demand for long-term care services increases with population aging. This study aims to develop a conceptual model of elderly customers’ health-care experiences to explore the antecedents, mechanisms and outcomes of social participation in long-term care service organizations. Design/methodology/approach Using a two-phase data collection approach, this study collects data from 238 elderly customers in a long-term care service organization. The final data are analyzed through structural equation modeling. Findings The results show that care management efforts (i.e. customer education, perceived organization support, role modeling, perceived other customer support and diversity of activity) influence elderly customers’ psychological states (i.e. self-efficacy and sense of community), leading to increased social participation. In addition, high levels of social participation evoke positive service satisfaction and quality of life, both of which alleviate switching intention. Originality/value This study is one of the first conclusive service studies focused on the role of elderly customers’ social participation in their long-term care experience. The findings contribute to health-care service marketing and transformative service research, and expand understanding of elderly customers’ health-care experience, especially in long-term care service settings.
Article
Big Data has dramatically changed the competitive landscape of the global economy (Demirkan et al., 2015). Big Data capabilities enable marketers to differentiate customers by accessing and analysing their daily activities to influence the customers’ choices in a way that increases profits. Marketers are thus motivated to design technologies that extract as much data as possible to tempt customers, and even lock them into a cycle of commitment. This process of data extraction is the first stage of what has become known as surveillance capitalism, which occurs in the absence of dialogue or consent and contributes to structures of indifference towards the rights and liberties of customers (Zuboff, 2019b). In this paper, we highlight these intersecting relationships between accounting, accountability and marketing practices. We explore the role of the accounting-based marketing practices that persuade customers of a large retail provider in the Middle East to participate in and use a loyalty program. We then explain how particular forms of calculative practice, intertwined with socio-religious cultural norms, serve the goals of surveillance capitalism. We also reflect on the traditional position of accountability systems vis-à-vis accounting-based marketing practices to consider the ethical concerns that underpin the use of ‘Big Data’ techniques (Dillard and Vinnari, 2019, Roslender and Nielsen, 2020).
Thesis
Full-text available
本研究旨在探析用户对于社交媒体隐私问题的归因类型。通过以 Q 方法为工具,对 35 位高校学生及学者进行主观性研究,确立四种归因类型:I 型、CS 型、CR 型和 E 型。研究认为,社交媒体用户已能较为全面地认知社交媒体隐私问题产生的原因,且用户将社交媒体隐私问题归因于自身成为主流。
Article
Both practitioners and academics understand that consumer loyalty and satisfaction are linked inextricably. They also understand that this relation is asymmetric. Although loyal consumers are most typically satisfied, satisfaction does not universally translate into loyalty. To explain the satisfaction–loyalty conundrum, the author investigates what aspect of the consumer satisfaction response has implications for loyalty and what portion of the loyalty response is due to this satisfaction component. The analysis concludes that satisfaction is a necessary step in loyalty formation but becomes less significant as loyalty begins to set through other mechanisms. These mechanisms, omitted from consideration in current models, include the roles of personal determinism (“fortitude”) and social bonding at the institutional and personal level. When these additional factors are brought into account, ultimate loyalty emerges as a combination of perceived product superiority, personal fortitude, social bonding, and their synergistic effects. As each fails to be attained or is unattainable by individual firms that serve consumer markets, the potential for loyalty erodes. A disquieting conclusion from this analysis is that loyalty cannot be achieved or pursued as a reasonable goal by many providers because of the nature of the product category or consumer disinterest. For some firms, satisfaction is the only feasible goal for which they should strive; thus, satisfaction remains a worthy pursuit among the consumer marketing community. The disparity between the pursuit of satisfaction versus loyalty, as well as the fundamental content of the loyalty response, poses several investigative directions for the next wave of postconsumption research.
Article
This chapter presents a model of service recovery designed to improve profitability by differentiating the recovery efforts offered to different customer segments. To predict customer responsiveness to recovery efforts, the model advocates the use of both (1) company knowledge and databases to classify customers by past profitability and (2) the severity of the service failure they have experienced. The chapter makes recommendations related to the level of recovery quality and the type of recovery effort that should be extended to customers in each segment of the classification scheme. Using this strategic model of service recovery, executives can avoid wasting costly resources on unprofitable recovery efforts and instead direct those resources to the customers most likely to respond favorably to recovery efforts. By focusing recovery efforts on these customers, the probability of generating a profit through recovery efforts is increased.
Article
As an important means of relationship marketing strategy, customer loyalty programs have been implemented by many enterprises. The paper attempts to figure out the existence state of relationship benefits and their distribution based on relational bonds, we try to build the classification and hierarchical structure model of relationship benefits. First, we explore five basic forms of relationship benefits through in-depth interviews. Second, we established the framework of customers' total perception on relationship benefits-relational bonds-relationship benefits, and proposed the hypothesis. We used SEM to analyze the data collected in the empirical research. The data verified the hypothesis, and we made further discussion on conclusions and pointed out the managerial implications.
Article
Crowdsourcing, the outsourcing of previously internal processes within the corporate value chain to an external crowd of people, has become increasingly popular in retail. In applying this practice, retailers aim not only at improving the effectiveness and efficiency of their value creation process, but also at increasing the affective commitment and loyalty of their customers. Surprisingly, the effects of crowdsourcing on affective commitment and customer loyalty, and the factors influencing these objectives have hardly been researched. This paper closes this research gap. Through expert interviews and experimental studies, it comes to the conclusion that especially satisfaction with the crowdsourcing process and sense of virtual community are relevant factors impacting affective commitment and customer loyalty. The paper concludes with recommendations for optimizing these factors in retail practice.