Exploring customers’ store loyalty using the means-end chain approach

Journal of Retailing and Consumer Services 17 (2010) 395–405

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Journal of Retailing and Consumer Services journal homepage: www.elsevier.com/locate/jretconser

Exploring customers’ store loyalty using the means-end chain approach Wan-I Lee a,, Chih-Yuan Chang b, Yu-Lun Liu c a b c

Department of Marketing and Distribution Management, National Kaohsiung First University of Science and Technology, Taiwan Chicony Department Store, ChengDu, SiChuan, P.R.C Taiwan Fire & Marine Insurance Co., Ltd, Taiwan, R.O.C

a r t i c l e in fo

Keywords: Store loyalty Customer involvement Service quality Means-end theory Hierarchical value map

abstract The study is aimed at revealing the relationships in terms of customer store loyalty by using means-end chains (MEC) analysis, in order to examine the linkages between department stores’ service attributes, involvement, satisfaction and loyalty each of which the customer regards as important. In the study, customer involvement, satisfaction and service quality are connotations that are strongly linked with the customer store loyalty, with service quality being the element to which the platinum tier customers attach the most importance. Data are gathered for a MEC analysis by interviewing 34 platinum tier customers of department stores individually. The results reveal that platinum tier customers are department store customers with a relatively high degree of involvement which is likely to have a positive impact on both core and peripheral service quality, satisfaction toward store loyalty. Although there are numerous studies in the literature that use the means-end chain model to examine customer value within the realm of consumer behavior, few studies discuss platinum tier customers’ store loyalty which is a phenomenon currently receiving a great deal of interest. In contrast to prior research, three connotations are integrated in the study to represent the content and structure of stores’ loyalty attributes for MEC analysis which can offer a different perspective and better understanding for developing highly targeted marketing strategies. & 2010 Elsevier Ltd. All rights reserved.

1. Introduction Department stores are currently facing a variety of changes in their operations, including the shortening of product life cycles, increased service specialization, and an added focus on customer lifestyles and preferences. As department stores are gradually being characterized by chain store operations in oligopolistic markets, the competition within the industry is becoming increasingly fierce. Lichtenstein et al. (2004) found that in terms of their identification with firms, customers will both directly and positively influence the firms’ subjective interests, such as loyalty, which will in turn affect behavioral interests, such as customers’ repeat purchases. How department stores can hold on to and create more loyal customers is absolutely critical for their success. In addition, companies with a strategic focus on establishing longterm customer relationships will also build databases to identify their customers, track customer transactions, and predict changes in customer purchase patterns at an individual level (Batislam et al., 2007). In order to hold on to and create more loyal customers, it is necessary to understand the purchasing behavior and motives of such customers, and the means-end chain approach is one such

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E-mail address: [email protected] (W.-I. Lee). 0969-6989/$ - see front matter & 2010 Elsevier Ltd. All rights reserved. doi:10.1016/j.jretconser.2010.04.001

approach used in resolving the aforementioned issues (Olson and Reynolds, 2001). Means-end chain (MEC) theory is a simple knowledge structure that links product attributes to the product consequences by means of those attributes (Gutman, 1982). Numerous studies have shown that techniques using MEC are suitable for understanding a wide range of consumer behavior and marketing applications (Valette-Florence and Rapacchi, 1991; Aurifeille and Valette-Florence, 1995; Pieters et al., 1995; Guenzi and Troilo, 2006). MEC may also be regarded as a relevant approach for understanding the content and structure of customer knowledge and how it can be assessed and applied to business relationships (Henneberg et al., 2009) and practical marketing problems (Mulvey et al., 1994). In traditional MEC analysis, marketers can decide which attributes help customers achieve the value that they want. However, many factors may influence the determination of important attributes such as the relations among satisfaction, service quality, and loyalty which may vary with involvement. Therefore, integrating important factors to represent attributes for MEC analysis can offer a different perspective and a better understanding for developing highly targeted marketing strategies. The purpose of this study is to apply MEC analysis to investigate the department stores’ customer behavior, to analyze the relationships between the department stores’ service quality, involvement, satisfaction and loyalty, to examine the linkages and relationships between the customer and the store in terms of

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loyalty, and to understand the linkages among stores’ service quality, involvement, satisfaction and loyalty to which the customers attach importance, in order to formulate strategies to strengthen the department store industry’s competitive advantage in terms of its operations. In contrast to prior research, this study integrates service quality, involvement, and satisfaction to represent the stores’ loyalty attributes for MEC analysis. Ultimately, this study attempts to depict how to fill the gaps in the previously favored quantitative research approach, and as a result establish strong store loyalty among platinum tier customers.

2. Literature review 2.1. Means-end chain analysis Tolman (1932) first proposed the use of means-end chain (MEC) analysis, which has subsequently been applied to marketing (Gutman, 1982; Olson and Reynolds, 1983; Young and Feigin, 1975), such as customer value (Guenzi and Troilo, 2006), product development (Reppel et al., 2006; Reynolds and Gutman, 1988), sales managers (Deeter-Schmelz et al., 2002, 2008), service marketing (Voss et al., 2007), and B2B marketing (Henneberg et al., 2009). MEC analysis has been used to analyze the relationship between products and customers (Gutman, 1997; Reppel et al., 2006; Olson and Reynolds, 1983; Walker and Olson, 1991). Gutman (1982) proposed a relatively complete MEC analysis measurement model that includes a MEC, a matrix and inputs and outputs. Gutman believed that the MEC was composed of three layers: namely attributes, consequences and values. The emphasis in the case of the attribute and consequences layers was on what the products can do for the customer, whereas the focal point of the value layer was on the products’ attributes. The products and circumstances are this system’s inputs, while the finally-chosen products are the outputs. The overall matrix represents the products and circumstances of the MEC that are categorized according to the different levels. Mitchell and Harris (2005) used MEC analysis to explore how grocery customers build a mental link between store attributes, the consequences of not having those attributes, and the motives for seeking them. The laddering approach is a tool that has frequently been used by scholars to measure the customer MEC (Reynolds and Gutman, 1988; Olson, 1989; Grunert and Grunert, 1995; Bech-Larsen and Nielsen, 1999). The laddering approach is able, in the context of purchasing behavior through its influence in stimulating the customer’s purchasing motive, to obtain a kind of non-traditional but also useful insight. Such an insight that is characterized by qualitative methods and various kinds of structures will derive circumstantial structural implications. The two most frequently used laddering approaches are soft laddering and hard laddering. Under soft laddering, the persons being interviewed are unrestricted when it comes to conducting interviews and collecting data. In the case of hard laddering, by contrast, those being interviewed are restricted to one answer on each rung of the ladder, and subsequent answers tend to be increasingly abstract (Henneberg et al., 2009; Walker and Olson, 1991; Young and Feigin, 1975). When selecting either the soft laddering approach or the hard laddering approach, it is necessary to see the extent of the involvement of both the person being interviewed and the researcher. Grunert and Grunert (1995) pointed out that the soft laddering approach is more applicable where the person being interviewed is aware of structural weaknesses and is relatively less involved, or where the products have relatively less experience of being used. The hard laddering approach, however, is applicable to products where there is a general level of involvement as well as experience of using them.

2.2. Customer loyalty Jacoby and Kyner (1973) defined customer loyalty as a kind of preference attitude and display of behavior that has continued to be expressed over a certain period of time. It is the expression of a decision-making unit, and is the impression of a certain product that has been generated in the mind of the customer as well as the customer’s awareness at the psychological level. Bove and Johnson (2006) indicated that customer relationships with service personnel can lead to increased service loyalty through either one of two routes. Wong et al. (2009) proposed a framework to understand effective customer loyalty strategies. The first route to service loyalty is indirect and involves personal loyalty, while the second route involves trust and commitment. Bell and Eisingerich (2007) found that customer loyalty is positively and significantly related to technical and functional service quality. As department stores face an increasingly competitive market, marketing strategies are adopted to increase competitiveness by cutting prices in order to attract customers, but whether or not these measures are able to result in customers having the intention to repurchase or the formation of customer loyalty are issues that are of particular concern to the department stores. Jamal and Anastasiadou (2009) found that reliability, tangibility and empathy are positively related to customer satisfaction, which in turn is positively related to loyalty. 2.3. Customer satisfaction Customer satisfaction has not just been examined in the manufacturing industry, but has also been used in the retail industry and outlets (Bloemer and de Ruyter, 1998, Ewing, 2000, Bloemer and Odekerken-Schroder, 2002). Within the fiercely competitive department store industry, in order to attract customers to make purchases, customer satisfaction must form the basis of all major considerations. In addition, Fornell (1992) believed that satisfied customers were assets of the company, because satisfied customers would bring about repeat purchases, so that customer satisfaction would be regarded as an indicator of economic welfare. Day (1994) observed that a high degree of customer satisfaction would lead to customer retention. Alegre and Cladera (2009) pointed out that both satisfaction and the number of previous visits have a positive effect on the intention to return. Customer satisfaction was the reason why loyalty changed, and that would have a positive effect on loyalty (Bitner, 1990). A positive relationship existed between customer satisfaction and loyalty (Dabholkar et al., 2000). Gil et al. (2008) proposed that variables like the service process, perceived service value and customer satisfaction, as well as the job satisfaction of service employees play a vital role in the customer’s evaluation of service result. However, the effect of customer satisfaction on loyalty will vary due to the differences in industrial structure. Increasing numbers of studies have emphasized that the relationship between customer satisfaction and loyalty is not positive as depicted by the results of previous studies. If, on the one hand, customer satisfaction exceeds a critical level of satisfaction, an increase in customer satisfaction will give rise to a rapid increase in purchases by customers. In addition, if customer satisfaction falls short of a critical level of satisfaction, it will result in a rapid reduction in purchases by customers. 2.4. Service quality The importance of the quality of service in the service industry should involve customers’ viewpoints (Berry et al., 1988;

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Dabholkar et al., 2000; Kolesar and Galbraith, 2000). Personnel within enterprises in general are inclined to use the terms satisfaction and service quality interchangeably. By contrast, Zeithaml et al. (2006) clearly define and measure these two concepts, and this has sparked a considerable amount of controversy. The underlying causes and effects of these two concepts are basically different (Parasuraman et al., 1994; Dabholkar et al., 2000; Cronin et al., 2000). Satisfaction is generally believed to be a relatively broad concept, whereas service quality focuses on certain service constructs in particular (Brady and Cronin, 2001). Jayawardhena et al. (2007) found that service encounter quality is directly related to customer satisfaction and service quality perceptions. Based on these points of view, the awareness of service quality is an important factor in the composition of customer satisfaction. Hence, service quality is a kind of centralized evaluation that reflects customer awareness of specific service constructs that include reliability, responsiveness, assurance, empathy and tangibility. On the other hand, satisfaction is a generalization (Parasuraman et al., 1988), and is influenced by the recognition of service quality.

2.5. Involvement In the past four decades, the concept of involvement has received widespread attention in the marketing domain (Warrington and Shim, 2000). Traditionally, stores have fostered the growth of such involvement through sponsoring conventions or associations (Boorstin, 1973). By providing a forum for customers to interact, stores plant a seed for the development of a consumption community which is comprised of socially involved individuals sharing values or feeling involved with a line of products or the associated vendors (Belk and Costa, 1998). Involvement is defined in terms of perceived personal relevance (Celsi and Olson, 1988; Richins and Bloch, 1986). Stimuli in a customer’s immediate environment may function as situational sources of involvement where sales promotions, such as rebates, coupons, and price reductions, create contingencies in customers’ decision environments that might activate personally relevant goals and values. Involvement is related to a product, or a specific product category in most research (Homburg and Giering, 2001), in addition to being viewed as a motivation or interest, a process, a mediator, and a moderator (O’Cass, 2000). Involvement has often been regarded as one of the important moderators that determine purchase decisions. It is generally defined in terms of perceived personal relevance and is classified as either situational or enduring (Celsi and Olson, 1988; Richins and Bloch, 1986). Involvement possesses the main defining features of strong attitudes for explaining behavior (Thomsen et al., 1995). A positive relationship or correlation exists between involvement and service loyalty (Pritchard et al., 1999) as well as frequent buying behavior (Gainer, 1993; Mittal and Lee, 1989). Some studies have explained the origins of brand commitment as attitudinal loyalty or as an outcome of product involvement, and have suggested a positive relationship between product involvement and brand loyalty (Beatty et al., 1988; Bloemer and Kasper, 1995). Olsen (2007) tested the satisfaction, involvement and loyalty relationship, as well as the different roles of involvement in forming loyalty toward a product category because involvement is suggested to be a moderator variable in most studies on attitude–behavioral relationships or within the satisfaction literature (Richins and Bloch, 1991; Kokkinaki and Lunt, 1997; Shaffer and Sherrell, 1997). Suh and Yi (2006) revealed that customer satisfaction has both direct and indirect effects on loyalty, whereas attitudes and corporate image have only indirect effects through their mediating influence on brand attitudes.

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Kapferer and Laurent (1986) proposed the Consumer Involvement Profile (CIP) to measure the involvement profile of customers and it is suitable for measuring stores’ consumer behavior. The relationships among satisfaction, service quality, and loyalty may vary with involvement. Therefore, this study combines service quality, satisfaction, and involvement to represent the content and structure of store loyalty attributes for MEC analysis which can offer a better understanding of store loyalty.

3. Methodology 3.1. Research subject In this study, the top 1000 credit card customers of department stores in Taiwan in terms of annual aggregate consumption are defined as department stores’ ‘‘platinum tier customers’’ (Zeithaml et al., 2001). The interviews were conducted in 2 months, and each in-depth interview lasted approximately 50 min to avoid fatigue among the participants. This study also accessed ideal informants, a more special and diverse sample of department stores, in order to understand the kinds of differences in terms of the loyalty attributes, consequences and values relating to the purchasing behavioral decisions due to the differences in age, occupation and income of individuals within the sample made up of those with high levels of consumption. Reynolds and Gutman (1988) believed that when the sample size was between 30 and 50, the relationships between the different variables could be displayed in a hierarchical store loyalty map. The total number of participants was 34 customers, of which 30 were women (88.2%) and 4 were men (11.8%). All of them were over the age of 30, and the proportions of customers within the 30–40 and 40–50 age groups were about the same, showing that the department store’s customers tended to be more mature. In terms of their occupation, business owners accounted for the main group of customers, while the share accounted for by doctors (together with their spouses) was also very high. Monthly income for individuals was NT$285,000 on average. The majority spent at least NT$176,000 (nearly equivalent of US$5500) per year. The largest range of expenditure was from NT$176,000 to NT$988,000. 3.2. Category development From the transcripts of the interviews for the 34 platinum tier customers, a total of 1294 themes were identified, which were subsequently categorized into three layers, namely, attributes, consequences and values, in order to become the laddering data. Accordingly, each measure was generated by grouping the sentences with a similar context unit. Each measure was analyzed and classified into a specific layer in terms of similar attributes and became an analysis unit. If there was one unit that had a source and an end result at the same time, it belonged to the consequences layer; otherwise it belonged to the attributes layer (Reynolds and Gutman, 1988). Before formally coding, two highranking managers from within the department store industry were first given a pretest, and any themes that were worded unclearly were rephrased in accordance with the transcripts. In addition, in cases where there was a low level of agreement, or where it was relatively easy to confuse one type from another, further revisions were made and terms redefined. Finally, a total of 14 attributes, 11 consequences and 6 objectives for customer store loyalty were obtained, or a total of 31 items. The respective shares of each type of element are shown in Table 1. In regard to those attributes that are related to customer store loyalty include

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Table 1 Shares of customer store loyalty elements. Layer

Categories

Elements

Share (%)

Attributes

Involvement

A01—Japanese-affiliated department store A02—Come to the store for a gift A03—Easy to buy products A04—Feeling as if in one’s kitchen A05—Purchasing without considering price A06—Exquisite restaurant A07—Store’s geographical location A08—Brand types and quantities A09—Spacious and streamlined store aisle layout A10—Advance purchases A11—Clean restrooms A12—VIP parking service A13—As if friends with the sales personnel A14—Discounted products can be tried, modified or exchanged

5.18 11.56 4.78 9.16 4.38 6.37 7.97 10.36 5.98 7.57 2.39 11.16 9.56 3.59

C01—Customary C03—Differentiation C06—Applicability C04—Selectivity C09—Exquisiteness C11—One-stop shopping C02—Trust C07—Cordial feeling C08—Customization C05—Comfortable C10—Convenient and time-saving

12.90 7.53 5.91 9.68 7.53 9.14 11.29 5.38 10.75 8.60 11.29

26.34

G02—Fashionable G05—Identification G06—Satisfaction G04—Happiness G01—Honor G03—At ease

10.64 12.77 20.21 14.89 21.28 20.21

23.41

Satisfaction

Service quality

Consequences

Involvement

Satisfaction

Service quality

Objectives

Involvement Satisfaction Service quality

the items listed within the categories of involvement (Kapferer and Laurent, 1985/1986), satisfaction (Bryant and Jaesung, 1996; Fornell, 1992) and service quality (Parasuraman et al., 1988; Cronin and Taylor, 1983). 3.3. Coding The coding was carried out by three experts that were familiar with the MEC approach and related processes. The relationship between department stores’ services attributes and customer loyalty was first examined, in order to fully understand the customers’ consumption behavior tendencies. The consequences of the coding were compared to ensure the coders were in agreement with each other. If the coders failed to agree with each other, they needed to discuss the issues on which they disagreed, with each coder explaining his/her understanding of the meaning of the themes as well as the reasons for the coding, to ensure that a consensus could be reached for the coding. The consequences were compared three times in order to obtain the coding consequences. Based on the attributes, consequences and values transmitted by those interviewed, a total of 143 relationship chains were obtained. 3.4. Reliability In order to ensure the reliability of classified variables in terms of the categorizing contents, it is essential to include a reliability test in any content analysis (Krippendroff, 1980). The interjudge reliability approach was adopted in this study to test the reliability of the sample. Based on this approach, each coder measured the reliability of the items in accordance with the

Times 30.68

29.08

40.24

26.35

47.31

35.10 41.49

13 29 12 23 11 16 20 26 15 19 6 28 24 9 24 14 11 18 16 17 21 10 20 14 21 10 12 19 14 20 19

standards of the intercoder agreement. For the content of the same interview, all three coders performed the classification and intercoder reliability is 0.8727, 0.8519 and 0.8302. Wimmer and Dominick (1994) recommended that the reliability should be above 0.90, in order to complete with the most basic requirements. In this study, the reliability of the content analysis is 0.9451, a level that people are clearly willing to accept.

3.5. Implication matrix Among the thirty-one categories, the relationship between the pattern and intensity will affect the drawing of the hierarchical store loyalty map (HSLM) that follows. Reynolds and Gutman (1988) propose the following five association patterns: (1) adjacent–direct relations (A–D): The categories are adjacent to each other, and very strong direct relationships exist; (2) nonadjacent–direct relations (N–D): The categories are not close to each other, but very strong direct relationships exist among them; (3) adjacent–indirect relations (A–I): The categories are adjacent to each other, and very strong direct relationships exist, but very weak indirect relationships also exist; (4) nonadjacent–indirect relations (N–I): The categories are not close to each other, very weak direct relationships exist, but very strong indirect relationships also exist; (5) nonadjacent–zero relations (N–O): The categories are not close to each other and very weak relationships or no relationships at all exist. Associations involving more than five patterns, which are obtained from the relationships among the categories (direct or indirect) and the number of times (strong or weak) obtained by those interviewed, are compiled as shown in Appendix. In Table A1 (in Appendix), the integral part shows that the relationships among the categories (listed on the lines giving their

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4.2. Analysis of hierarchical store loyalty map

responses) are viewed by the interview respondents as being directly linked. A small number of them indicate that the categories are believed by the interview respondents to be indirectly linked. The number of direct links refers to the number of direct links that occur between two categories, while the number of indirect links refers to the number of associations that indirectly arise between two categories due to other reasons.

4.2.1. Analysis of key elements for the attributes layer In the part for the involvement attributes connotations, the A02 ‘‘Come to the store for a gift’’ element accounted for the highest share (11.56%), having been referred to 29 times. In order to increase the number of times that customers visited the department store, and enhance the customer’s repurchase intention, almost every month there were several promotional activities held for members to come to the store to receive a gift, and the store provided lower prices and better quality in order to encourage visits from customers. The element with the second largest share was A04 ‘‘Feeling as if in one’s kitchen,’’ which accounted for 9.16%, having been referred to 23 times. This finding indicated that familiarity with the purchasing environment influences the loyalty of the top-level members. When platinum tier customers are in a purchasing environment that is familiar to them together with professional salespeople who provide spontaneous service, their interest in examining various products will satisfy their purchasing behavior. In the part of the satisfaction attributes connotations, the element A08 ‘‘Brand types and quantities’’ accounted for the largest share (10.36%), having been referred to 26 times. This finding indicated that the department store’s platinum tier customers still attached great importance to product demand. This high spending group of platinum tier customers could, with their relatively unlimited economic resources, freely make decisions regarding their consumption behavior. The second element was A07, which was the ‘‘Store’s geographical location,’’ and accounted for 7.97%, having been referred to 20 times. Convenience in traveling to and from the store could save the platinum tier customer’s time spent on the road, and for this reason was regarded as an important element.

4. Results 4.1. Constructing the hierarchical store loyalty map The information contained within the implication matrix was used to construct the customer hierarchical store loyalty map (HSLM), which expresses the structure of the store loyalty of the interview respondents. The elements within the HSLM were established based on the contents of the answers given in the interviews, while the lines linking these elements were based on the relationships listed in the implication matrix, and the key elements for different purposes were listed in the hierarchical map (Reynolds and Gutman, 1988). In order to avoid drawing all of the key elements, cutoff values were established where it was decided that only if the links exceeded a certain number would the line in question be drawn on the hierarchical map. A cutoff value is not based on theoretical or statistical criteria (Grunert and Grunert, 1995). Thus, a balance was struck between ensuring completeness of information and having a map that is readable and can clearly depict the real and important relationships. A cutoff value of 3 resulted by a trial and error approach. Moreover, any cases for which there were three or less direct and indirect relationships were not included in the hierarchical map. The HSLM is presented in Fig. 1. G05 (n=12) Identification

G06 (n=19) Satisfaction

G04 (n=14) Happiness

G03 (n=19) At ease

399

G01 (n=20) Honor

6

3 4 3

5

19

6

19 5

8 C10 (n=21) Convenient & time-saving 5

8 3

3

C07 (n=10) Cordial feeling

3 C02 (n=21) Trust

6 3 C01 (n=24) Customary

7

10

C09 (n=14) Exquisiteness 3

4

9

4

5

C04 (n=18) Selectivity

C08 (n=20) Customization

C06 (n=11) Applicability

4 4

C11 (n=17) One-stop shopping

3

C05 (n=16) Comfortable

8 3

3 C03 (n=14) Differentiation 4 4 8

3

6

4

3

3

7

5

7

14

A06 (n=16) Exquisite restaurant

A07 (n=20) Store’s geographic al location

A08 (n=26) Brand types and quantities

5

9

11

3

13

17 A01 (n=13) Japanese affiliated department store

A02 (n=29) Come to the store for a gift

A03 (n=12) Easy to buy products

A04 (n=23) Feeling as if in one’s kitchen

A05 (n=11) Purchasing without considerin g price

Fig. 1. Customer hierarchical store loyalty map.

A09 (n=15) Spacious and streamline d store

A10 (n=19) Advance purchases

A12 (n=28) VIP parking service

A13 (n=24) As if friends with the sales personnel

400

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Finally, in the part of the service quality attributes connotations, the element A12 ‘‘VIP parking service’’ accounted for the largest share (11.26%), having been referred to 28 times. Some 87% of Talee-Isetan department store’s customers drive to the store, and hence the demand for parking spaces is very high. If the department store has a large amount of parking space, it has a relatively high competitive advantage. It implies that planning an exclusive VIP parking service that allows platinum tier customers to allow differentiated treatment and customized service quality will not only encourage them to visit the store more frequently to make purchases and strengthen their repurchase intention, but will also increase the platinum tier customers’ loyalty. The element A12 ‘‘VIP parking service’’ is the most important element among the service quality attribute connotations. Next comes the element A13 ‘‘As if friends with the sales personnel,’’ which accounts for a share of 9.56%, having been referred to 24 times. This indicates that the sales personnel are the first line of contact with the customer and the people the customers see the most often. Platinum tier customers have high spending power, and thus it is important for sales personnel to maintain good relationships with them, even to the extent of becoming a sounding board when the customers are in the process of making purchasing decisions.

4.2.2. Analysis of the key elements for the consequences layer Among the key elements for the involvement aspect of the consequence connotations, it was C01, ‘‘Customary’’ that accounted for the largest share with 12.90%, having been referred to 24 times. Because ‘‘Japanese-affiliated department store’’ and ‘‘Feeling as if in one’s kitchen’’ were key elements in the involvement attribute connotations, they resulted in the frequency of visits to the store by platinum tier customers and the number of their purchases being relatively high. As a result these customers were better able to understand their surroundings and their purchasing behavior was inclined to become ‘‘Customary’’ purchasing behavior. The key elements for the satisfaction consequence connotations, the element C04 ‘‘Selectivity’’ was the key element among the satisfaction consequence connotations which accounted for the greatest share of 9.68%, having been referred to 18 times. With ‘‘Brand types and quantities’’ being the element among the satisfaction attribute connotations most sought after by the platinum tier customers, it was clear that products or brands were extremely important and influential to them, and ‘‘Selectivity’’ was the element among the satisfaction attributes connotations with the highest share. The element C11 ‘‘One-stop shopping’’ accounted for a share of 9.14%, and was referred to 17 times. The conditions for the department store’s provision of one-stop shopping could satisfy the customer’s needs, and strengthen the selection among a variety of brands. Platinum tier customers hoped to be able to purchase all the products they needed on one visit to the store, in order to reduce the amount of time spent shopping. The key elements for the service quality, the element C02 ‘‘Trust’’ was the key element among the service quality consequence connotations that accounted for the largest share of 11.29%, and was referred to a total of 21 times. This finding indicated that platinum tier customers attached great importance to ensuring that they were not cheated. Firms made every effort to establish a good reputation and public image, so that the customer could build trust in them. The element C10 ‘‘Convenient and time-saving’’ accounted for a similar share and was referred to the same number of times as the element ‘‘Trust.’’ In a department store’s provision of service, convenience and time-saved constitute an important decision objective in the

purchasing behavior of platinum tier customers. Time is money, and customers come to the store only in order to purchase goods. Thus convenience and time-saved are the most important factors when visiting the store. The element C08 ‘‘Customization’’ accounted for a share of 10.75%, and was referred to 20 times. In the case of platinum tier customers, the extravagant feature of service quality is its ‘‘Customization’’ service. Each platinum tier customers hopes to be able to receive tailor-made service quality. 4.2.3. Analysis of the key elements for the objectives layer Of the key elements for the involvement objectives connotations, the element G05 ‘‘Identification’’ accounted for a share of 12.77%, and was referred to 12 times. Platinum tier customers, in relation to involvement attributes, i.e., their subjective impressions of Japanese-affiliated department stores, establish consequential attributes of trust, which in turn gives rise to objective attributes of identification. Through these connected thoughts and concepts, they establish the department store objectives layer, i.e., customer identification, and from this loyalty are formed. The element G02 ‘‘Fashionable’’ accounted for a share of 10.64%, and was referred to 10 times. Platinum tier customers have their sensitivities to what is current or fashionable as well as their needs. The department store must at all times be at the forefront in terms of driving these fashionable trends in order to attract the customer and provide news on fashions that are in vogue, thereby achieving its goals in terms of operational performance. The key elements for the satisfaction objectives, the element G06 ‘‘Satisfaction’’ accounted for a share of 20.21% and was referred to 19 times. In providing service, the department store’s ultimate objective should be to be able to satisfy the customer, so that the customer generates a purchasing intention and repeat purchase behavior. If platinum tier customers are able to feel satisfied with the department store’s sales personnel, this will give rise to satisfaction and in turn create loyalty. The element G04 ‘‘Happiness’’ accounted for a share of 14.89%, and was referred to 14 times. Making purchases and window shopping should from the point of view of the customer be a relaxing and enjoyable experience. If platinum tier customers are able to experience feelings of happiness when they are in the department store, this will increase the frequency of their visits as well as buying opportunities and this in turn will cause them to become loyal customers. Finally, the key elements for the service quality objectives, the element G01 ‘‘Honor’’ accounted for a share of 21.28% and was referred to 20 times. Platinum tier customers, as their name suggests, are important customers and honor has a very close relationship. It is through a customized service that the needs of platinum tier customers are met, and that the objectives layer connotation in terms of honoring the customer is achieved. The element G03 ‘‘At ease’’ accounted for a share of 20.21%, and was referred to 19 times. If the customer trusts the department store’s operational concepts for the consequences layer, the objectives layer will produce a feeling of being at ease. In terms of purchasing decision behavior, the department store’s reliability (Parasuraman et al., 1988) more often than not is a key element that affects its consequences. 4.3. Analysis of key paths in the hierarchical store loyalty map 4.3.1. Primary path analysis In the customers’ HSLM, the element A04 ‘‘Feeling as if in one’s kitchen’’ in the attributes layer involvement connotation was directly linked with the consequences layer C01 ‘‘Customary’’ 17 times, and the element A04 in the attributes layer was referred to 23 times. The element C01 in the consequences layer was referred

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to 24 times, indicating that when engaging in purchasing behavior, the platinum tier customers’ attribute of familiarity with the purchasing environment will produce the consequence ‘‘Customary’’ as the main path. Apart from special occasions such as the department store’s anniversary celebrations and Mother’s Day or end-of-season sales, the department store does not have any operating strategies in normal times that are not bound up with its principal platinum tier customers. It is through the high frequency of their purchases and large sums of money involved that platinum tier customers enhance the department store’s operating performance (Zeithaml et al., 2001). However, in ordinary times when there are no special promotional activities, in order for platinum tier customers to be willing to come to the store and makes purchases, it is necessary to understand the needs of the platinum tier customers, and to enable their cognition of loyalty at the psychological level to become purchasing loyalty at the behavioral level (Oliver, 1999). The element A08 ‘‘Brand types and quantities’’ that is within the attributes layer is directly linked with C04 ‘‘Selectivity’’ in the consequences layer 14 times. The element A08 was referred to 26 times, while the element C04 was referred to 18 times. The main path indicates that the ‘‘Selectivity’’ of the ‘‘Product’’ is an important key factor in the platinum tier customers’ purchasing behavior that influences their purchasing frequency and repurchases intention. A department store is a venue for consuming that is highly relevant to modern society, and its products or brands allow the customer to directly feel much of this modernity. To satisfy the customer’s understanding of the information on current fashions put out by the department store, the selection of products or brands is the most direct approach. The element A13 ‘‘As if friends with the sales personnel’’ in the attributes layer is directly linked with C02 ‘‘Trust’’ in the consequences layer 13 times. A13 was referred to 24 times and C02 was referred to 21 times. This shows that, in terms of the purchasing behavior of platinum tier customers, getting to know the sales personnel well and building a relationship of mutual trust with them is a key factor in the platinum tier customers’ willingness to continue coming to the store to make purchases and becoming loyal customers. The element A12 ‘‘VIP parking service’’ in the attributes layer is directly linked with C10 ‘‘Convenient and time-saving’’ in the consequences layer 11 times. A12 was referred to 28 times, and C10 was referred to 21 times. From this linkage, it can be seen that, in terms of the purchasing behavior of these platinum tier customers, the department store’s provision of parking conditions has become a very important factor influencing the customer’s willingness to visit the store. The element C02 ‘‘Trust’’ in the consequences layer is directly linked with G03 ‘‘At ease’’ in the objectives layer 19 times. C02was referred to 21 times, and G03 was referred to 19 times. The reason why platinum tier customers develop the element ‘‘Trust’’ in the consequences layer has to do with three elements, namely, A01 ‘‘Japanese-affiliated department store,’’ A05 ‘‘Not considering price when buying’’ and A13 in the attributes layer. In addition, C01 ‘‘Customary’’ is an element in the consequences layer. The ultimate objective in building trust is for the customer to feel at ease when purchasing goods. Customers generally think that department store prices are higher than those of bulk discount stores, but that in terms of product and service quality they should meet certain standards. In particular, their after-sales service will cause the customer to feel at ease, and for this reason C02 ‘‘Trust’’ and G03 ‘‘At ease’’ are directly linked (as many as 19 times). The element C10 ‘‘Convenient and time-saving’’ in the consequences layer is directly linked with G06 ‘‘Satisfaction’’ in the objectives layer 19 times. C10 was referred to 21 times, and

401

G06 was referred to 19 times. The element C10 influences the loyalty of platinum tier customers through three important elements in the consequences layer, namely, through the VIP parking service that the platinum tier customers enjoy, through the store’s geographical location and the transportation conveniences that this brings, as well as the sales promotion activities provided by the department store that facilitate purchasing. Ultimately, the objectives layer can be satisfied. This indicates that after the platinum tier customers feel satisfied with the service quality provided by the department store, this gives rise to an objective of purchasing behavior where the customer feels at ease. This objective factor enables the platinum tier customers to select a department store where they feel at ease making purchases, and they are willing to continue making purchases, thereby becoming loyal customers. Besides the element G03 in the objectives layer, the element G06 is also an important element influencing the platinum tier customers’ store loyalty. 4.3.2. Secondary path analysis The element C04 ‘‘Selectivity’’ in the consequences layer is directly linked with the element C11 ‘‘One-stop shopping’’ in the consequences layer and the element G06 ‘‘satisfaction’’ in the objectives layer key elements 8 times and 7 times, respectively. After platinum tier customers have the opportunity to choose among relatively large numbers of products or brands in the department store, and they are able to buy all the products they require at once, this will give rise to satisfaction in the objectives layer. At the same time, after platinum tier customers have the opportunity to choose among a relatively large number of products or brands, the element G06 in the objectives layer will be directly related a total of 8 times. The element C05 ‘‘Comfort’’ in the consequences layer is directly linked with the element G04 ‘‘Happiness’’ in the objectives layer 10 times. C05 was referred to 16 times and G04 was referred to 14 times. When the department store has a good purchasing environment, it will enable platinum tier customers to feel comfortable, and they will feel that coming to the store to make purchases is a kind of happy behavior, so that they will be willing to come frequently and also be willing to spend money. The element C08 ‘‘Customization’’ in the consequences layer is directly linked to the element G01 ‘‘Honor’’ in the objectives layer 9 times. C08 was referred to 20 times, and G01 was referred to 20 times. In view of the high consumption, platinum tier customers expect the department store to provide customized service and to display their respect to them. Because platinum tier customers receive superior service in this way, they feel that making purchases is both convenient and time-saving. A secondary path therefore also exists from the element C10 to the element G01 and the two elements are directly linked 8 times.

5. Conclusion Developing effective marketing strategies requires identifying which customers are most relevant to the marketing problem and thus are the key decision makers. This study has successfully applied MEC analysis to explore the relationships and linkages among the department stores’ service quality, involvement, satisfaction and loyalty to which the customers attach importance, in order to formulate strategies to strengthen the department stores’ competitive advantage in terms of its operations. In the study, customer involvement, satisfaction and service quality are connotations that are strongly linked with customer store loyalty, with service quality being the element to which the platinum tier customers attach the most importance. Furthermore, the results reveal that platinum tier customers are

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department store customers with a relatively high degree of involvement which is likely to have a positive impact on both core and peripheral service quality, as well as satisfaction toward store loyalty. Although there are numerous studies in the literature that use the means-end chain model to examine customer value within the realm of consumer behavior (Sheth et al., 1991; Woodruff, 1997; Wang, 2008), few studies discuss platinum tier customers’ store loyalty which is a phenomenon currently receiving a great deal of interest. In contrast to prior research, three connotations are integrated in the study to represent the content and structure of the stores’ loyalty attributes for MEC analysis which can offer a different perspective and a better understanding for developing highly targeted marketing strategies.

5.1. Theoretical implications This study applies the MEC approach to discuss the platinum tier customer’s store loyalty and its findings reinforce the fact that ‘‘Feeling as if in one’s kitchen’’ in the attributes layer is an important key in relation to the platinum tier customers’ purchasing behavior at the department store. This gives rise to the ‘‘Customary’’ consumption consequence, with the content of ‘‘Come to the store for a gift,’’ Quality and selectivity each being valued highly by platinum tier customers. This shows that platinum tier customers have a full understanding of the department store’s purchasing environment, products and activities, as well as an intention to be significantly involved (Kapferer and Laurent, 1985/1986; Zaichkowaky, 1985a, b). During end-ofseason clearance and discount sales of cosmetics and brand merchandise, platinum tier customers will prior to the event avail themselves of different channels, such as first making a verbal commitment with the sales personnel, or going to the venue of the sale and having items to their liking and of the appropriate size kept in reserve for them, so that they can avoid missing the opportunity to select the product when the activity takes place. In regard to activities promoted by the department store such as ‘‘Come to the store for a gift’’ and ‘‘A gift for spending more than a certain amount,’’ platinum tier customers will carefully compare the conditions for exchanging goods and the quality of the gifts. From the study, it was discovered that platinum tier customers are department store customers with a relatively high degree of involvement (Kim, 2005). Furthermore, it was discovered that department store ‘‘Brand types and quantities’’ was a key element in terms of the platinum tier customers’ satisfaction. In view of the fierce competition and market segmentation that the department store faced, product or brand positioning and segmentation as well as quantity were found to influence the platinum tier customers. The purchasing behavior of the platinum tier customers was completely selective, and gave rise to the psychological need for the ‘‘Satisfaction’’ objective to be achieved, while also having a relatively high level of satisfaction (Zeithaml and Bitner, 2000). A high degree of satisfaction would lead to a high repurchase intention (Anderson and Sullivan, 1993), which in turn would become a high degree of customer loyalty (Cronin and Taylor, 1992; Homburg and Giering, 2001). Specifically, the platinum tier customers’ satisfaction with the department store’s products or brands was one of the factors that influenced them to become loyal customers. Two of the elements in the attributes layer, namely, ‘‘VIP parking service’’ and ‘‘As if friends with the sales personnel’’ were found to be directly linked to the conditions for platinum tier customers to exhibit purchasing behavior by coming to the store. The element ‘‘VIP parking service’’ was directly linked with the elements ‘‘Convenient and time-saving’’ and ‘‘Satisfaction’’ and

this was the primary path to which the platinum tier customers attached the most importance. This finding indicated that in terms of the department store’s efforts to strengthen customers’ store loyalty, by using convenient and time-saving car parking conditions, the platinum tier customers were enabled to increase the number of their visits to the store as well as strengthen their repurchase intention. Hence, the provision of a ‘‘VIP parking service’’ was an essential operating strategy. When platinum tier customers come to the store to purchase goods, the service personnel could provide a cordial service, or even a customized service, in order to increase the customers’ trust. In this way, the platinum tier customers’ satisfaction was increased, so that the customers became loyal customers (Zeithaml et al., 1996). From the study, it was discovered that service quality had become one of the factors influencing customers’ store loyalty. Finally, service quality was the linked connotation to which the platinum tier customers attached the most importance. A high degree of customer satisfaction with service quality will lead to high customers’ store loyalty which conforms to previous research (Zeithaml et al., 1996). Furthermore, a platinum tier customer with a relatively high degree of involvement is likely to have high customers’ store loyalty when the department store provides a high degree of service quality and customer satisfaction.

5.2. Managerial implications In the fiercely competitive department store retail market, by understanding the linked attribute connotations for customers’ store loyalty, a good operating performance on the part of enterprise can be created. Michael and Barton (1995) believed that successful retailers were able to do better than their competitors by seeking to satisfy the target market customers’ needs. If a customer who is loyal in the short-term is transformed into a loyal customer in the long-term (Jones and Sasser, 1995), then the firm’s operational performance will be increased. In terms of their purchasing behavior, modern-day customers face opportunities to make a great many choices, and it is this variety that is likely to influence them in terms of transforming their loyalty. Having many choices among large numbers of differentiated products or brands strengthens the interaction between the sales personnel and the customer. It is only by providing the customer with superior quality service that the sales personnel can increase the customer’s satisfaction and upgrade the shortterm loyal customer into a long-term loyal customer. In addition, by providing a comprehensive service quality and external resources, establishing brand influence and providing service guarantees, gold tier customers can be upgraded into platinum tier customers (Zeithaml et al., 2001). This is an issue that deserves careful consideration by department store retailers. In focusing on the department store’s platinum tier customers, an effective customized service can be provided to enhance loyalty over the long term. Taiwan’s department store retail business in today’s M-shaped society has given rise to the following trends: 20% of customers give rise to 80% of operating sales (Zeithaml et al., 2001), and thus different marketing strategies are needed for platinum tier customers as compared with customers in general. Platinum tier customers unlike the average customer are unwilling to forcefully compete with other customers in noisy and crowded department stores during anniversary celebrations in order to take advantage of products that are on sale. If the department store can provide a sales promotional activity exclusively for platinum tier customers during a special period of time (such as a period for making advance purchases), such activities will more often than not give rise to some healthy operating income. By appealing to leading

Table A1 Implication matrix. C01

A01—Japanese-affiliated department store A02—Come to the store for a gift A03—Easy to buy products A04—Feeling as if in one’s kitchen A05—Not considering price when buying A06—Exquisite restaurant A07—Store’s geographical location A08—Brand types and quantities A09—Spacious and streamlined store aisle layout A10—Advance purchases A11—Clean restrooms A12—VIP parking service A13—As if friends with the sales personnel A14—Discounted products can be tried, modified or exchanged C01—Customary C02—Trust C03—Differentiation C04—Selectivity C05—Comfortable C06—Applicability C07—Cordial feeling C08—Customization C09—Exquisiteness C10—Convenient and time-saving C11—One-stop shopping G01—Honor G02—Fashionable G03—At ease G04—Happiness G05—Identification G06—Satisfaction

8 1 5 17

Total

32

C02 3.01

1.02 7

C03

C04

C05

0.02 6

4.04

0.01 0.05

0.01

0.03

3.02

1

C06

C07

C08

0.02

C09

C10

C11

G1

0.05 0.04

4

G2 0.02

3.05 0.02

0.02

0.08 0.06 0.01

1 1.04

5

G3

7 1

14

1.08

0.01

5 9 1

1 0.01 13 2 4

1 4

11.08

3.05

0.02 0.01 0.1 0.02

0.18

1 1 2 1

1

2.02 4

2

2.01 3 1.02 4

4.01 3

1

1.04 1.02 4 3 1

5.01 1 0.01

0.02 1 1 8

6.04 19

1.03 0.01

1

2.02 3

5

8

3 1

1

15.03

22.07

19.10

9.02

7.03

15.08

16.2

34.12

0.02 0.02 0.03 0.08 0.04 0.01 0.01 0.05 0.01

G5 0.05 0.01 0.05 0.01 0.01

0.01 0.01

0.02

3.07 1.01 0.02 0.02 10.03 2 2

3.03 5.02 1 1 1

10.08

18.26

3.06

34.38

4 6 1

29.44

G6

0.11 0.04 0.01 0.01 0.01 0.05 0.13 0.08

0.01 0.03 1.07 8.09 4.03 1

9.05 1

31.04

G4

2 1

15.2

1 6 19 7

46.67

Total 11.22 15.27 8.12 21.32 8.08 7.10 7.07 16.23 5.05 9.09 2.02 19.33 14.13 4.04 31.24 31.03 15.19 22.14 19.05 9.03 7 15.05 16 35 9

W.-I. Lee et al. / Journal of Retailing and Consumer Services 17 (2010) 395–405

key elements

357.8

403

404

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brands of cosmetics, especially renting and using hotel suites for platinum tier customers, hosting a press conference exclusively for platinum tier customers, and providing sumptuous food and beverages will attract the participation of platinum tier customers, and encourage purchases of items on sale on these public holidays. With an average expenditure of more than NT$100,000 per platinum tier member, it will be easy for the store’s ambitious operating objectives during these holiday periods to be achieved. 5.3. Limitations and future direction This study uses means-end chain approach to discuss the types of consumption behavior of department store customers, and to analyze the relationship between the department store customer’s loyalty and the store’s service attributes, involvement and satisfaction. The strengths of such a study are that it enables one to deduce the objective values of the customer, using the meansend chain analytical approach without one set of standards to begin to see reasonableness of the explanation provided by the researchers. Later in the study quantitative research is applied, and by means of an investigation involving a large sample the results either confirm or infer different orientations for important objective values. In addition, this study obtains 31 key elements from 34 interview respondents. Although we availed ourselves of the professional experience of two practitioners and three graduate student coders who interacted with each other to do the coding, if one wishes to be more rigorous, using a focus group or panel discussion will further corroborate the results. Furthermore, the scope of the interview respondents in this study can be broadened to include department stores in different parts of Taiwan, thereby making the research more complete. For customers in stores in other industries, such as in their purchasing centers, hypermarkets and supermarkets there is still much regarding the loyalty attribute connotation that merits further research, and for this reason in the future the loyalty attribute connotation can be studied in different settings, in order to construct a more complete hierarchical store loyalty map.

Acknowledgments This work is partially supported by grants from the National Science Council, Taiwan, Republic of China under Grant No. 97-2221-E-327-024. The authors also gratefully acknowledge the helpful comments and suggestions of the reviewers, which have improved the presentation.

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