Modeling store loyalty: perceived value in market orientation practice

Abstract

Purpose – This study developed a model of customer store loyalty for retail service based on a value-based market orientation practice, staff performance and customer satisfaction. Design/methodology/approach – A comprehensive qualitative study was undertaken to develop measurements, derived from both perspectives of firms and consumers. The model was then tested empirically in a retail setting in Taiwan, using a dyadic data collection approach. For each service provider from a random sample of hairdressing salons in Taiwan included in our survey, a matched set of customers provided information concerning their expectation and evaluation of service. Findings – Our findings provide an insight into the effect of perceived customer value in market orientation practice as well as its impact on customer retention. The model indicates that marketing practitioners should manage customer satisfaction and perceptions of value in their implementation of market orientation as they are directly related to customer store loyalty. Research limitations/implications – This study involved only one service industry (hairdressing salons) in one country (Taiwan). However the scales and methodology described here could and should be replicated in other settings. Practical implications – By using our scale and results, service providers may be able to enhance their customers' perception of value and increase their degree of store loyalty. Originality/value – Despite the importance of customer value for organizations seeking to become market oriented, customer value measures are not included in market orientation scales. This study shows how including customer value into market orientation measurements can assist in enhancing business performance via customer retention.