Does program loyalty induce brand loyalty? Online publication date: Mon, 09-Dec-2024
by Yogesh Funde; Amit Shrivastava
International Journal of Business Innovation and Research (IJBIR), Vol. 35, No. 4, 2024
Abstract: Loyalty programs are designed to improve retention rates and increase repeat purchases. The historical research argues that loyalty programs may lead to loyalty towards the loyalty program rather than the brand; these generalisations are not empirically proven. This research will try to test the relationship between program loyalty and its value perception. In addition, researchers seek to assess whether the value perception of the loyalty program indeed impacts brand loyalty. The researchers used the model proposed by Dowling and Uncles (1997). The research used structure equation modelling to establish evidence of the relationship among the three components. It has been found that the value perception of the loyalty program has a positive influence on brand loyalty. In addition, value perception affects brand loyalty by augmenting program loyalty. This indicates a loyalty program with high perceived value will also generate brand loyalty. Thus, as an implication value perception of a loyalty program is a key component of marketing strategy.
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