What is Customer Loyality - Literature review Example

Customer Loyalty Loyalty concept remains a significant factor for industrial goods, services, and retail establishments since it represents an essential basis for developing prolonged competitive advantage. According to Dick and Basu (1994), “customer loyalty is viewed as the strength of relationship between an individual’s relative attitude and repeat patronage (p.99)”. The scholars consider the relationship to be arbitrated by norms in the society as well as situational factors. In their study, Dick and Basu (1994) identify cognitive, affective and conative background to influence loyalty accompanied by motivation, perception, and behaviour. According to Oliver (1999), consumer loyalty and satisfaction are linked because satisfaction is an essential step in the formation of loyalty although it becomes less significant as loyalty undergoes other mechanisms. Oliver (1999) shows that although there are concerns on satisfaction, satisfaction propels loyalty illustrated through evaluation of various factors like social norms and self-identity. The study evaluates the two frameworks and their variability on customer loyalty in order to understand the various factors that influence customer loyalty from the two perspectives. According to Dick and Basu (1994), the core aim of marketing is often perceived in terms of development, maintenance, or even enhancement of customer loyalty toward products or services. In their approach, Dick and Basu consider various concepts regarding customer loyalty like attitude considerations and loyalty based on purchase. Therefore, in their framework, Dick and Basu conceptualize loyalty in terms of relationship between relative attitude targeting an entity and the patronage behaviour. According to Dick and Basu (1994), attitude acts as an appraisal function since it is associated with favourable behaviour even though having a favourable attitude toward a brand does not guarantee multiple purchases of the brand. Nevertheless, Dick and Basu (1994), show that low relative attitude accompanied by low repeat patronage indicates the lack of loyalty. However, relative attitude regarding loyalty suggests the possibility of attaining loyalty at both high and low levels of strength in attitude given that the consumers recognize significant differences among the competing brands. Dick and Basu (1994) indicate cognitive antecedents capable of propelling relative attitude in customer loyalty and they include accessibility, confidence, centrality, and clarity. Accessibility refers to the ease of retrieving attitude from memory activated by the strength of the association between the attitude and its evaluation. Attitudinal confidence in their study is considered to be the level of conviction associated with an attitude (Dick & Basu, 1994). Centrality is evidenced when attitude is linked to the value system in a brand. Clarity in attitude is presented as the ability of an individual to find other objectionable alternative attitudes and remains undefined in case of other acceptable positions. Moreover, Dick and Basu (1994) present affective antecedents that play a role in relative attitude in customer loyalty and they include emotions, moods, satisfaction, and primary effect all of which are psychological in nature. Although conative antecedents have a role in development of relative attitude in customer loyalty, they have a low level of abstraction compared to cognition or affect and are divided into three aspects that include: switching costs, sunk costs and expectations. Apart from relative attitude, Dick and Basu (1994) consider repeat patronage to be influenced by subjective norms and situational factors. Their evaluation of social norms and situational factors together with relative attitude offer a mechanism for the strength associated with loyalty relationship. Hence, the consistency in attitude and behaviour results in a stronger relative attitude regarding a brand increasing the chances of individual overcoming social and situational contingencies. By considering loyalty in term of attitude-behaviour relationship, Dick and Basu (1999) are able to investigate the phenomenon from causal perspective, which results in identification of antecedents that facilitate consistency and consequences of the relationship in customer loyalty. Their study is integrative since it positions loyalty within attitude research showing that high relative attitude significantly contributes to long-term maintenance of loyalty. On the other hand, Oliver (1999) shows that apart from the Cognitive-to-conative sequence presented by Dick and Basu, the different levels of loyalty rely on many factors. For instance, Oliver (1999) indicates that ultimate loyalty relies on the convergence of product, personal and social forces while at the same time the consumer displays sustainers of logical, personal, and communal loyalty. Oliver (1999) evaluates conceptual phases of customer loyalty such as cognitive loyalty, affective loyalty, conative loyalty, and action loyalty. In his evaluation, Oliver presents two sources of weaknesses in these conceptual phases of customer loyalty. The two sources of obstacles in loyalty include consumer idiosyncrasies and switching incentives. The study shows that the previous concepts on customer loyalty suggest that true loyalty is to a certain degree irrational; besides, certain aspects in consumer consumption oppose the conventional notion of loyalty. In his study, Oliver (1999) generates a framework based on the issues raised by the previous framework that distinguishes loyalty into two categories. One dimension represents the level of individual resilience to fight off competitive overtures based on his or her allegiance to the brand instead of information generated by marketers. The other dimension shows the high and low phases of community and social support where the community offers the drive to remain loyal because it is enticing or proactively promotes loyalty. Product superiority, which is the weakest form of loyalty in the new approach Oliver presents, Dick and Basu evaluate it in terms of cognitive, affective, and conative aspects in their study. This indicates the traditional view of loyalty that usually results from high quality and product superiority, which is believed to generate a strong sense of brand preference. According to Oliver (1999), self-isolation sustains loyalty because when a consumer forms the ultimate bond that allows the consumer to purchase and repurchase only one brand, the consumer becomes immune to competitive overtures because he or she cannot be swayed from determined repurchasing. In a way, the unfailing commitment is a pledge on relational continuity that transcends conative loyalty since it exists in the conscious level and acts as a goal in itself. Above the desire to reacquire the preferred product or service by a consumer, the consumer also is committed to the brand. Although conative commitment arises from prior liking, the unfailing commitment arises from true affection for a product or service. This adoration is believed to be the main impetus behind loyalty people display toward others and humanlike consumables (Oliver 1999). Moreover, according to Oliver (1999), social organization like a village propels motivation on each consumer to be loyal in order to please their constituency. In this case, the consumer becomes a willing participant owing to the attention of the community members. In addition, personal identity in the cultural setting with regard to consumption may be passive although it plays an enticing role. This draws a consumer to a consumable environment instead of the situation where the environment defines the consumption for the consumer. This is an essential situation for a company because products or services are embedded within the consumer’s psyche and lifestyle. The consumables are part of the consumer’s self-identity as well as his social identity because the individual is unable to conceive himself as whole without the product or service. According to Oliver (1999), there is a link between satisfaction and loyalty because satisfaction as a post-usage state of consumption reflects the way a product or service fulfils its purpose. Moreover, Oliver (1999) suggests that satisfaction is essential in development of loyalty because even the village concept presumes that whatever is offered to its constituents is satisfying. However, Oliver (1999) shows that there are circumstances that demonstrate common consumption situations where satisfaction exists without loyalty and loyalty without satisfaction like in cases where the society determines the consumption. Nevertheless, ultimate loyalty entails both satisfaction and loyalty since resilience helps develop it. Through satisfaction, Oliver (1999) shows that it is possible to attain loyalty since the two are intertwined; even though, they have distinct features. In his study, Oliver shows the significance of cognitive-to-action framework since it is hard for a customer to be willing to repurchase a product or service until he or she is willing to adore and commit to a product or service. After developing the commitment toward a product or service, then other factors like social bonding help develop the customer loyalty. The discussion regarding customer loyalty suggests a complex phenomenon that requires multiple concepts as shown in the two concepts illustrated in the literature. Dick and Basu framework shows that attitude plays a significant role in customer loyalty, which led to the incorporation of relative attitude in their model. Moreover, Dick and Basu concept illustrate the significance of situational influence and social norms as arbitrators of the relationship between relative attitude and repeat purchase. On the other hand, the framework Oliver presents shows that Loyalty is much more than the concept developed by Dick and Basu. Oliver offers various contributing factors to the development of customer loyalty like self-isolation, social organization, individual and social integration all of which rely on satisfaction. Both frameworks value the contribution of social factors in the development of customer loyalty. The various factors in the two frameworks illustrate loyalty as an apparent state of balance because of the variability in the literature. References Dick, A. S., & Basu, K. (1994). Customer Loyalty: Toward an Integrated Conceptual Framework. Journal Of The Academy Of Marketing Science, 22(2), 99-113. Oliver, R. L. (1999). Whence Consumer Loyalty?. Journal Of Marketing, 63(4), 33-44. Read More