CRM

Study on Drivers of Customer Loyalty Towards Retail Store Industry
CHAPTER ONE
1.0 THE INTRODUCTION OF THE STUDY
1.1 Background
Customers are the purpose of what marketers do and rather than them depending
on marketers, we very much depend on them. That is the main reason why
organizations today are focusing on customer satisfaction and loyalty. Satisfaction
is an overall customer attitude towards a service provider, or an emotional
reaction to the difference between what customers anticipate and what they
receive, regarding the fulfilment of some need, goal or desire (Zhang & Feng
2009). Customer loyalty is actually the result of an organization creating a benefit
for a customer so that they will maintain or increase their purchases from the
organization.
The retail store industry, in particular and all businesses whose service depend on
building long term relationship need to concentrate on maintaining customer
loyalty. In this respect, loyalty is greatly influenced by product quality, service
quality and brand image. As such, retail store often invest in managing their
relationship with customer and maintaining quality to ensure that customer who
are loyal in the short term will continuously be loyal in the long term.
Loyalty has become important over the past few years because of increased
competition within respective industries. To be successful, organization must look
into the needs and wants of their customers. That is the reason why many
researchers and academicians have continuously emphasizes on the importance of
customer satisfaction, loyalty and retention.
Customer satisfaction is important because many researchers have shown that

customer satisfaction has a positive effect on an organizations profitability
according to Jahanshahi et al 2011. Due to these consequences, customer
satisfaction and dissatisfaction must be considered. There is also a positive
connection between customer satisfaction and loyalty.
Market becomes so competitive.
Nowadays, businesses competing to cater
customer need and wants. In order to make customer loyal with the store is one of
the key element of business strategy. To make customer loyal with the store that
they always shop, we have to make sure that customers are satisfied with our
service and product. In gaining customer satisfaction towards the store,
organization must be concerned about the quality of product, service and good
image that they give to the customer. Without satisfaction from customer, some
business cannot achieve their goal.
Nowadays many people did not stay to use one product or one store to shop.
People nowadays have many choices to select. It is easy for customer to change
the store that they always buy or use. Building customer loyalty is very difficult
because nowadays people have many preference that they can choose where the
want to go shopping. Whether they buy at the same store or they want to switch
with a new one.
People are always interested in new environment because they can choose where
they want to buy. Recently, many firms have emphasized the importance of
relationship marketing and they have increasingly been devoting considerable
attention to developing and maintaining close relationship with their customers, in
order to create value by differentiating their offering and lowering their cost.
Building customer loyalty towards retail store or any business consists of 4 factors
that is product quality, the important of relation between people that involve in
management of the store and lastly are brand image of the product itself Kumar,
Batista, and Maull (2011).
1.2
Problem Statement
Nowadays, loyalty programmes have become an increasingly popular choice of

marketing strategy by retailers to build store traffic, increase market size and
creating deeper relationship with customer in making them satisfied, loyal and
retain purchase from organization. Satisfied customers form the foundation of any
successful business as customer satisfaction leads to repeat purchase, brand
loyalty, and positive word of mouth, Jahanshahi et al (2011).
Satisfied customers are most likely to share their experiences with other people to
the order of perhaps five or six people. Equally well, dissatisfied customers are
more likely to tell another ten people of their unfortunate experience.
Furthermore, it is important to realize that many customers will not complain and
this will differ from one industry sector to another (Al-Rousan, M.Ramzi and
Badaruddin , 2010).
This is because they are really complex and choosy in making decision as
consumers have gradually become more knowledgeable and sophisticated. So, a
customers expectations are met while customer loyalty is a measure of how
likely a customer is to repurchase and engage in relationship activities.
Loyalty is vulnerable because even if customers are satisfied with the service they
will continue to defect if they believe they can get better value, convenience or
quality elsewhere. Therefore, customer satisfaction is not an accurate indicator of

loyalty. Satisfaction is a necessary but not a sufficient condition of loyalty. In
other words, we can have satisfaction without loyalty, but it is hard to have loyalty
without satisfaction.
Regarding to the Parkson Kota Bharu Trade Centre, in attracting customer to

retain their purchasing with organizing Members Day for their value customer.
During that day, customer will get the big discount and save their money.
Month (Year 2011)

January
February
March
April
May
June
July
August
September
Total sales (RM)

192,000
108,000
120,120
121,000
146,000
138,000
232,000
465,000
120,000
Table 1.1 : Amount of Sale on Members Day

The table above shows the amount of sale during the members day once in a
month. Parkson Kota Bharu Trade Centre organize members day as a marketing
strategy to build relationship with customer and effective programmes garnering
customers support and loyalty. Members day become an increasingly popular
choice for customer because Parkson has offered variety of promotion such as
five times of bonus link point, additional discount for bonus link members and
Parkson Discount Voucher for purchasing of RM 150 and above.
5
All this strategy will attract attention to customer for loyalty in Parkson and also
will influence their family and friend to shop at Parkson. The table show the total
sales during members day. For January, the sales is RM 192,000, this is because
January is the beginning of the year so that, people especially parent went to
shopping for their children stuff for their school. In term of that the sales are
higher.
Following month February, the sales was drop into RM 108,000. Sales for
February are lowest compared to other month. Customer did not spent their
shopping for this month. However, the trend of shopping become normal when
the total sales for march increasing by RM 12,120 to RM 120,120.
Total shows the consistent number for April when the loyal customer spent their
time shopping at Parkson. The amount of sales is RM 121,000, increase by RM
880. The promotion that organize by Parkson attract attention by customer to
come and shopping.
The amount of sales on May and June were increasing. For May RM 146,000
while June RM 138,000. The increasing in sales because of school holiday the
end of May to middle of June. So that, many outside people come to Kelantan for
their holiday and shopping. That why the number of sales is increase.
The table show that total sale for July is RM 232,000, as we know August is
fasting month. Customer get ready shopping for their children at early to avoid
traffic store during last minute. All the parties get their benefit.
Amount of sales on August were highest compare to other month with RM
465,000 on members day. This is because, early September muslim will celebrate
Hari Raya Festival. Customer use the opportunity to shopping for their family and
Parkson also come up with big sale in order to attract their loyal customer and
also for new comers. The sales on September was drop into RM 120,000, even
though Parkson still with their sale, but customer still on Hari Raya mood. It is
resulted to the drop on sale.
As a conclusion, the fluctuation on the trend of sales in Parkson influence by
customer loyalty. Customer tend to come and shop at Parkson during the sale and
discount period. Strategy in attracting customer to be loyal is always come up
with the grand sale.
1.3
Research Objectives
1.4
1.3.1
To identify factors that influence customer loyalty.
1.3.2
To identify the main factor that can ensure customer loyalty.
1.3.2
To identify the effort to be taken to encourage customer loyalty.
Research questions
1.4.1
What are the factors that influence customer loyalty?
1.4.2
What is the main factor that gives impact to customer loyalty?
1.4.3
Do the retail store emphasize on service quality, product quality and brand
image in their business?
1.5 Theoretical Framework
Product Quality
Service Quality
Customer loyalty
Brand Image
Independent Variables
Dependent Variable
Figure 1: Theoretical Framework

Sources: Toyin .A. Clottey, D.A., Micheal Stodnick (2008). Drive of Customer
Loyalty in a Retail Store Environment. Journal of Services Science
The above diagram shows that the important factors that influence customers
loyalty toward the retail store. Building loyalty among customer are depending on
three factors that is product quality, service quality and image of the store. The
changes of those factors can give impact on customer loyalty.
1.6
Hypotheses
9
Therefore, this research tests whether there is a significant relationship between

product quality, service quality, brand image of the store and customer loyalty.
The hypothesis of this study can be formulated as follow :
1.6.1
Quality of the product will contribute to the customer loyalty in the retail
store.
Ha : There is significant relationship between product quality and
customer loyalty towards retail store.
1.6.2
The retailers provide service in high quality that customer will likely and
continuously to be loyal.
Ha : There is significant relationship between service quality and customer
loyalty towards retail store.
1.6.3
Brand image awareness perceives by customer would increase customer

long term relationship.
Ha : There is significant relationship between brand image and customer
loyalty towards retail store.
10
1.7
Significant of the Study

Retail Store Industry
With increasing criterions emphasized by both of retailer and manufacturer, it will
lead to the stimulation of competition. So, they will compete and strive in order to
give the best to the customers.
Customers
The customers may take it for granted as they have choices of criterions such as
product quality, service quality, and brand image in purchasing as the retailer and
manufacturer will take serious on customers needs and wants.
1.8
Definition of Terms
Consumer loyalty
Customer loyalty means a customer would return or continue to use the same
product or other products of the same organization, make business referrals, and
intentionally or even unintentionally providing strong word-of-mouth references
and publicity.
11
There are two types of loyalty; behavioural and attitudinal loyalty. The
behavioural aspects of the customer loyalty were characterized in terms of
repurchase intentions, word-of-mouth communication, and recommendations of
the organization. While, attitudinal loyalty as a favourable evaluation that is held
with sufficient strength and stability to promote a repeatedly favourable response
towards a product/brand or a store.
Quality
Quality has been defined as fitness for use, or the extent to which a product
successfully serves the purposes of consumers. It is the totality of features and
characteristics of a product or service that bears on its ability to satisfy given
needs. If a product fulfils the customers expectations, the customer will be pleased
and consider that the product is of acceptable or even high quality.
Service
Service is different from physical products. Compared with physical products,
Service is thought to be intangible, heterogeneous, produced and consumed
simultaneously, unable to be kept in stock. A widely accepted definition of service
is ,a service is a process consisting of a series of more or less intangible activities
that normally, but not necessarily always, take place in interactions between the
customer and service employees, physical resources or goods and systems of the
service provider, which are provided as solutions to customer problems.
Brand image
12
Brand image was defined by as the perceptions about a brand as reflected by the
brand associations held in consumers memory. It is thought as the perception or
mental picture of a brand formed and held in customers mind, through customers
response, whether rational or emotional.
The brand is one kind of name, design, and symbol, or also perhaps the mark of
the combination of three. It can be confirmed by entrepreneurs product or the
service, in order to distinguish the differences with other competitors.
1.9
Limitation
The limitation of this research is the difficulties likely to be faced by the

researcher. First is, in gaining the accurate data, the respondent may did not give
full cooperation in answering the questionnaire. Some of them did not want to be
interview.
Second is, some the important data in this study are private and confidential for
the organization, so this limitation give impact to the researcher in completing the
research.
1.10
13
Scope of Study
This study selected the State of Kelantan as a research location and targeting
customer of Parkson Kota Bharu Trade Centre which is one of the retail store at
Kota Bharu. This study is also targeting 100 respondents.
1.10.1 Company Background

Parkson Kota Bharu Trade Centre (PKBTC) is a departmental store. PKBTC was
opened on 15th august 2009. PKBTC sell variety range of product which is local
and international brands. PKBTC offer wider range lifestyle merchandise.
PKBTC is 34th outlet that opens in Malaysia.
The missions of Parkson are ;
Be the best place to shop
Be the best place to work.
Products that are offered by Parkson KBTC can be divided into two segment of
product which is consignment and outright. Product that are selling by Parkson
can be divided into consignment product. While product that can be classified as
outright
that entitle by Parkson such as stationery, toys, household, home
furnishing, electrical, hardware and gifts.
14
Parkson KBTC occupies 100,000 sq ft, spanning 3 floors from ground, first and
second floor. It includes 40 brands . Parkson KBTC also carries a wide selection
of cosmetics & fragrances, womens shoe, handbag and accessories such as Estee
Lauder, Lancome, Kate Moss, Giorgio Armani, URS, Nichi, Tiffany and others on
the ground floor. Gents fashion consisting of Mens and sport apparels, Mens
shoes and Luggage from Alain Delon, GMV, Valentino Rudy, Oreef, Camel
Active, Hush Puppies, Elle Paris on the first floor. Gents departments are on the
first floor.
On the 2nd floor, shoppers will find ladies department, children, babies,
household and homes merchandise. Customer can look out for the new and
exclusive brand of women wear like Nicole MNJ, Voir Exchange, Diesel, FYI,
Egg and so on. Baby and children department also at second floor. The famous
brand for baby and children wear are Adidas, Mickey & Friends. Actually, Kota
Bharu is a good place for tourist to explore and experience the surrounding
countryside lifestyle.
Having positioned customers as the forefront of business, Parkson KBTC was

conceptualized to cater their customers fulfil their needs and expectations. To
ensure satisfaction and an enjoyable during shopping , Parkson employees are
trained in treaten the customer in a good manner. Services such as porter and
security escort service, free alterations, home delivery, wrapping and umbrella
facilities are available upon request.
15
Services provided by Parkson show that Parkson KBTC are concern about their
customer and trying to give them the best service that delight their customers and
also make them extraordinary moment while shopping at Parkson KBTC. Parkson
also expand their businesses outside Malaysia. Parkson already open at China and
Vietnam.
Parkson in China is opened at 1994, it is the first department store in Beijing and
it is segmented to the people of the middle and middle-upper end as a retail
market that can be choose by the Peoples Republic of China (PRC). Parkson
is one of the first foreign
department store chains that establish a presence in PRC. Parkson Vietnam was
known as Parkson Saigon Tourist Plaza , marked the entrance of Parkson as the
leading department
store in Asia and the first truly international department store to be opened in Ho
Chi Minh City.
Sources: Parkson Kota Bharu Trade Centre. (2008, August 18). Parkson
Happening. Retrieved September 18, 2011, from www.parkson.com.my
CHAPTER TWO
16
2.0 LITERATURE REVIEW

To support the researcher hypothesis and provide a brief review of the literature that
relates to customer loyalty, product and service quality and brand image.
2.1 Overview of customer relationship in Customer loyalty

Loyalty in the service sector is perhaps more difficult to conceptualize than in
the scope of products because of the characteristics. In this sense, intangibility
and lack of standardization might involve that reliability and trust play a more
important role in building and maintaining loyalty. In the case of store loyalty,
it has been defined as the biased behavioural response, expressed over time,
by a consumer with respect to one store out of a set of stores, which is a
function of both decision making and evaluative processes, resulting in brand
commitment Kumar et al. (2011).
Al-Rousan et al. (2010) states that customer loyalty as being a customer

would return or to use the same product or other product of the same
organization make business referrals and intentionally. Customer loyalty
happen when there is repeated purchasing by the same customer and
willingness to recommend the product to other customer. Loyal customers
tend to buy more, more regularly. And they will frequently recommend your
business to others. Satisfaction alone is not enough to build loyalty.
17
Customer loyalty in service industry consists of three causally related

dimensions, namely cognitive, affective and behavioral loyalties. By
measuring these dimensions of customer loyalty, firms in the service industry
can measure and determine the specific dimension and stage of customer
loyalty so as to make effective and well-directed marketing plans to boost
their customers behavioral loyalty and increase profit according to Juan and
Yan (2010).
Juan and Yan (2010) states that cognitive loyalty is the foundation of
formation of affective and behavioral loyalties. It is affected by a firms brand
recognition, reputation, social responsibilities and public image. Thus firms in
the intermittent service industry need to establish good pubic image, spread
their brand recognition and reputation and fulfill their corporate social
responsibilities in an effort to cultivate a higher level of customer loyalty.
For Buttle and Burton (2001) customer loyalty is a by product of a dynamic

brand relationship, which is built by rewarding customer with what they want,
that relevant with marketing offer that is satisfying purchase experience and
product or service of high perceived value. The repetition of purchasing leads
to the development of relationship between firms and their customer.
Customer Relationship Management (CRM) is about cost and profit issue. It is
generally believed to cost more to gain more customer than it does to retain an
existing ones.
18
It has been also found that the development of good relationships with
customers also plays a key role in generating customer loyalty, Service quality
has also been associated with customer loyalty. Corporate and brand image
have also emerged as determinants of customer loyalty. Furthermore higher
levels of customer satisfaction increases loyalty by building a positive
corporate image. It also confirmed that there is a positive relation between
corporate image and customer satisfaction, which leads to loyalty. Further
studies have also concluded that corporate image plays a significant role in
developing customer loyalty amongst existing customers.
Perceived value expressed as the ratio of perceived benefits to perceived costs

is also considered as a determinant of customer loyalty. Customers develop
loyalty towards a particular firm when there is a feeling that they are receiving
greater value as compared to competitor firms had been stated by Kumar et al.
(2011).
Regarding to Lawson and Limayem (2004) the development of loyalty

involves building and sustaining a relationship with a customer, which leads
to the repeated purchase of products or services over a given period of time. A
loyal customer base allows companies to devote their energies to other
business matters . Customers can demonstrate their loyalty in several ways.
They can choose to stay with a firm, whether this continuance is defined as a
19
relationship or not, or they can increase the number of purchases, or they can
do both.
2.1 The Important of Variable in Sustaining Customer Loyalty

2.1.1
Product Quality
Prior literature has examined product quality separately as antecedents of
customer loyalty. In the context of the retail industry, it present a
framework that examines the simultaneous impact of product quality on
consumers' purchase intentions. We examine product quality using an
aggregate measure of satisfaction often referred to in the marketing
literature as market-level product satisfaction.
According to Kumar et al. (2011), perceived value expressed cost is can

also be considered a determinant of customer loyalty. Customer develop
loyalty towards a particular firms. Good product can make customer
satisfy. So from customer satisfaction it can make customer loyalty toward
the store. So product quality is one of the factor that influence customer
loyalty. The changes in quality of product can make customer change the
perception about the store and can influence the loyalty of customer.
20
Product Quality encompasses the features and characteristics of a product

or service that bears on its ability to satisfy stated or implied needs.
Quality has been an elusive concept in automotive industry. It is the
totality of features and
characteristics of a product or service that bears on its ability to satisfy
given needs. If a product fulfils the customers expectations, the customer
will be pleased
and consider that the product is of acceptable or even high quality
( Jahanshahi et al. 2011).
In accordance, the product quality dimensions can be divided into three

which is features, aesthetics and customer perceived quality as mentioned
by Yuen and Sian (2010). Customer focus practices reflect the
fundamental principle of quality management , customers are the ultimate
judge of quality performance. To satisfy customers, an organization needs
to identify customers needs, design products and production systems to
meet those needs, and measure the results as the basis for improvement.
Private label brand supplement a retailers image and strengthen its

relationship with customer. The most important element for a private label
brand in establishing loyalty is the product ability to fulfil promises to
consumer base. The continued fulfilment of promises usually result in a
long term profitable relationship between the retailer and consumer and it
also related to the benefit offered by the brand (Pepe et al. 2011).
21
2.1.2
Service Quality
Service quality is a vital competition policy to keep customer support and
build great base. Retail store are trying to win customer loyalty by
providing enhanced quality service. Service quality, on the other hand,
was analyzed using an individual satisfaction measure of service delivery
at the dealer facility.
According to Al-Rousan et al. (2010) feelings and attitudes experienced by

customers via the service provided by hotels form the perception of
service quality. Based on their personal perceptions of the services,
customers generally form their experiences . Many studies have
investigated the relationship between service quality and customer loyalty
on the complaints received from customers . Here a complaint is seen in
the light of the customers request for better service and possible
continued usage of the product in the near future.
Loyal customers are those who are not easily swayed by price inducement
from competitors, and they usually purchase more than those less loyal
customers . On the other hand, service providers must avoid being
complacent as retained customers may not always be the satisfied ones
and similarly not all satisfied customers may always be retained.
22
Liao and Hsieh (2011) investigate how image, perceived service quality
and satisfaction determine loyalty in a retail store. Similarly, according to
Ou, Shih et al. (2011) to survive in this competitive market, companies
should continue to improve their service performance. Service quality is
known by both academics and practitioners to contribute to customer
satisfaction and market share. The pursuit of service quality has become
an essential factor for all businesses that are driven by the need to remain
competitive.
SERVQUAL is probably the most popular service quality framework. One

of the major criticisms SERVQUAL has received from researchers is on
the dimensionality of service quality. Al-Rousan et al. (2010) states that
service quality dimensions, namely, tangibility, reliability, responsiveness,
assurance and empathy, all of which comprise the criteria customer use to
evaluate the service quality of retail store industry. Five dimensions
indicated that the most important factor in predicting customer loyalty
evaluation is tangibility followed by empathy. It appears that retail
managers should more attempt and focus to develop its service quality
along these two vital dimensions.
23
Later, based on integrating previous studies and conceptual works, Zhang

and Feng (2009) summarized seven criteria of good perceived service
quality as, (1) professionalism and skills, (2) employees attitudes and
behaviour,
(3)
accessibility
and
flexibility,
(4)
reliability
and
trustworthiness; (5) service recovery; (6) serviscape; and (7) reputation

and credibility. The first criteria is outcome-related and thus a technical
quality dimension; the last one is image-related and fulfils a filtering
function; and the rest five ones are process-related and present the
functional quality dimensions
Over the years, service researchers have suggested that consumers judge
the quality of service based on their perceptions of the technical outcome
provided, the process by which that outcome is delivered, and the quality
of the physical surroundings where the service is delivered( Noor
Asiah,Azrin and Sarah,2009). These elements of service quality are
identified as outcome, interaction, and physical environment quality. On
the other hand, in their empirical research depicted service quality as
outcome quality, interaction quality, and physical environment quality. On
a similar note, it gave a three dimensional view of service quality. They
see it as consisting of what they term interaction, physical, and
corporate quality.
24
2.1.3
Brand Image
Organizations work hard to build the brand image of their firm and its
goods and services. Marketing processes such as advertising and sales
attempt to create a long term commitment by the customer that increases
brand awareness and repeat purchases, and therefore, customer loyalty.
Superior day-to-day management of store operations also contributes to
brand image, repeat purchases, and customer loyalty.
Brand image represents customers perceptions of a brand as reflected by

the brand associations held in consumer memory. Brand image is,
therefore, the mental picture or perception of a brand or a branded product
or service and includes symbolic meanings that consumers associate with
the specific attributes of a product or service (Ogba and Tan 2009).
Similarly to Zhang and Feng (2009 ) brand image was defined as the
perceptions about a brand as reflected by the brand associations held in
consumers memory. It is thought as the perception or mental picture of a
brand formed and held in customers mind, through customers response,
whether rational or emotional. A brand is not first built and then perceived
by the customers. This image may appeal to consumers at a functional or
symbolic level.
25
Brand image represents the reasoned or emotional perceptions consumers

attach specific brands
a set of beliefs held by customers about a
particular brand. It is well documented that consumers perceptions of

brands consist of brand awareness and brand image . Awareness of a brand
is not likely to be enough to ensure a brand success, as it is not in itself
likely to be sufficient reason to purchase a product. Successful brands
must offer superior value to consumers and differentiate an offering from
those of competitors. This is achieved by building a brand image.
Brand building is not only an important driving force for marketing

physical products, it is also a vital issue for service firms. The brand is one
kind of name, design, and symbol, or also perhaps the mark of the
combination of three. It can be confirmed by entrepreneurs product or the
service, in order to distinguish the differences with other competitors. Liao
and Hsieh (2011) indicated that the brand image had three essential
factors, namely, manufacturer image, product image, and competitor brand
image. All of the three factors will affect the customer regarding the brand
image cognition, but only the brand image will influence the users image.
26
Brand image has been conceptualized and operational in several ways. It

has been measured based on attributes, brand benefits or values ,brand
image scale. Measuring image based on the above definition would help
marketers to identify the strengths and weaknesses of their brand as well
as consumers' perceptions toward their product or services. According to
Sondoh et al. (2007) "a successful brand image enables consumers to
identify the needs that the brand satisfies and to differentiate the brand
from its competitors, and consequently increases the likelihood that
consumers will purchase the brand" A company or its product and services
which constantly holds a favorable image by the public, would definitely
gain a better position in the market, sustainable competitive advantage,
and increase market share or performance.
CHAPTER THREE
27
3.0
RESEARCH METHODOLOGY
3.1
Data Collection Method
3.1.1
Primary data
Primary data is the data collected or obtained directly to the field of study. In this
study, the researcher distributed questionnaire regarding to the identified factor
that influence customer loyalty. The questionnaire consists of six parts which is
demographic profile, general information, product quality, service quality brand
image and customer loyalty.
3.1.1.1 Questionnaire
According to Malhotra (2007) questionnaire is a structured technique for
data collection that consists of a series of questions, written or verbal that
a respondent can and will answer.
There are three specific objectives using a questionnaire. First, it must
translate the information needed into a specific question that the
respondent will answer. Second, questionnaire must uplift, motivate and
encourage the respondent to become involved in the interview, to
cooperate and to complete the interview. Third, a questionnaire should
minimize response error (Malhotra, 2007).
The structured question that had been used by the researcher.
28
a) Multiple Choice Questions

These question required respondents to choose the answer that already
given by the researcher. The respondents had some option when answering
the questions. By using this type of questionnaire, the respondents can
choose any answer that provided in the questions.
For example :
How long do you know Parkson Kota Bharu?
Less than 1 year
1 year
More than 1 year
b) Open Ended Question
This is where the respondents are free to give their suggestion or
comment regarding the
stated in questionnaire.
29
services given by the Parkson Kota Bharu as
b) Likert Scale Question

This type of questionnaire is provided with 5 different answer. The
respondent need to choose one and write the answer based on their
measurement on the scale where 1= strongly disagree and 5= strongly
agree. These types of question can be answered at Section C and D.
For example :
Parking is
Convenience
Reliability Test
Reliability test used to test reliable or relevant of the questions asked in
questionnaires according to the variables. Reliability of questionnaire
expressed by Cronbachs alpha to judge the consistency of items. For this
study, there is three dependent variables and a independent variable. Due
to that, the researcher test reliability for four variables to find out whether
each question are reliable or not to determine factors that influence
customer loyalty towards Parkson Kota Bharu Trade Centre.
Umar Sekaran (2005) explains that the reliability of a measure is establish
by testing for both consistently and stability Cronbachs alpha is compute
in terms of the average item-correlation among the concept. Cronbachs
alpha is a reliability coefficient that indicates how well the items in a set
are positively correlated to one another.
30

Alpha (a) range for scales
Strength of Association
much above .90

between .80 and .90
excellent, consider shortening the

scale
very good
between .70 and .80
respectable
between .65 and .70
minimally acceptable
between .60 and .65
undesirable
below .60
Unacceptable
Table 3.1 DeVellis, Robert F. (1991), Scale Development - Theory and

Applications. Newbury Park: Sage Publications, p.85
Reliability
Cronbach's Alpha Strength of Association
N of Items
Customer Loyalty
.891
very good
Product Quality
.695
minimally acceptable
Service Quality
.834
very good
Brand Image
.783
respectable
Table 3.2 Reliability Analysis Table
31
Referring to the Table 3.2, it can reveals that these variable range are acceptable.
This also indicates that the questionnaire on customer loyalty are acceptable for
the research purpose.
3.1.2
Secondary Data
Secondary data are important sources for the researcher to have information required. The
researcher referred to several sources to get the information such as from newspaper,
journal and internet. This secondary data provides the current issue, ideas and data that
related to the field of study.
3.1.2.1
Journal
Journals are used as a reference for researcher to compare their study based
on prior
study in the same field. From that, the researcher also can gains
data and information about this study. Most of the journals are form the
internet. Several journals have been referred as a guidance. For example of
article entitled Drivers of Customer Loyalty In A Retail Store Environment
done by Clottey,T.A, Collier,D.A and Stodnick.M.
3.1.2.2
Internet
Internet is the common data method that had been used is this study for
reviewing the literature. It can be used as a source for the researcher to fine
the information regarding to the field of study.
32
3.1.2.3
Books
Books as a reference to the researcher in order ideas, data and information
in conducting the research regarding to the field of study.
3.2 Target Population and Sample Size

The population of the study is involving the people who are loyal towards Parkson
Kota Bharu. The researcher select 100 respondent to provide an adequate level of
confidence to this study.
3.3
Sampling
The sampling method that used in collecting data is Purposive Sampling method.
Questionnaires are distributed to the respondents who shop at Parkson Kota Bharu
Trade Centre. This sampling is a type of non-probability sampling which involves
the sample being choose the respondent related to the purpose of research. This
sampling technique produces an accurate finding. Beside that it gave better
outcome. This method can get the accurate result, which is to know the factor
influencing customer loyalty toward the store that is Parkson Kota Bharu Trade
Centre.
3.4 Measurement
33
The researcher have design our own survey instrument which is questionnaire to
distribute it to our respondents in order to get the sufficient data towards customer
loyalty. The measurement in calculating the frequency the customer to come to
the store regarding the dimensions of product quality, service quality and brand
image that offer by the retail industry.
3.5
Procedures for Analysis of Data

In this study, the SPSS version 16 program is used as a tool to analyze all the data.
By using this program, the data can be easily analyzed in order to identify the
relationship between the dependent variables and the independent variable.
Furthermore, SPSS can perform varieties of data analysis and presentation
functions, including statistical analysis and graphical presentation.
There are several steps and procedures that are followed by the researcher in
analyzing data gathered. This process involved of transformation all raw data into
statistical analysis ad convert into a form that is easy to understand and suitable
for the analysis.
Hypothesis
34
Statistical Analysis
H1a : There is a significant influence of product quality Regression, Correlation

towards customer loyalty
H2a : There is a significant influence of service quality Regression, Correlation
H3a : There is a significant influence of brand image Regression, Correlation
CHAPTER FOUR
4.0
35
ANALYSES AND INTERPRETATION
The researcher came out with the findings and analysis of data from the
conducted study. Data analysis used the Statistical Package for the Social
Science version 16 (SPSS 16) to analyze the data. The analyses of the
collected data were carried out through various statistical techniques such
as frequency distribution, reliability analysis, regression analysis and
correlation analysis.
The purpose is to test the relationship among independent and dependent
variable. The researcher also used regression analysis and correlation to
test hypothesis for this study. The researcher distributed 100
questionnaires to the customers of Parkson Kota Bharu Trade Centre as
respondents.
4.1
FREQUENCY DISTRIBUTION ANALYSIS

According to Malhotra (2007) frequency distribution will be defined as a
mathematical distribution which objective is to obtain a count of the
number of responses associated with different values of one variable and
to express in percentage terms. A frequency table distribution will present
the frequency data. The data show in size order (frequency), percentage
frequency and cumulative perce ntage. In this research, the researcher
using tables in order to show frequency distribution
4.1.1
36
Respondents Profile
Demographic
Details
Frequency
Percent (%)
34
66
34.0
14
40
33
11
2
14.0
Single
41
41.0
Married
54
54.0
Others
5.0
Government
43
43.0
Private
45
45.0
Students
8.0
Others
4.0
< RM 1000
18
18.0
RM1000 RM1499
32
32.0
RM1500 RM1999
35
35.0
RM2000 >
15
15.0
Malay
79
79.0
Chinese
13
13.0
8.0
Variable
Gender
Age
Marital Status
Occupation
Income
Race
Male
Female
18 - 23
24 - 29
30 35
36 - 41
42 >
Indian
66.0
40.0
33.0
11.0
2.0
Table 4.1 Demographic Profiles of

Respondents
37
From the table 4.1, the descriptive show that the respondent of 66% are female,
while 34% are male. Both gender came from different age, marital status, income
and occupation which will be presented next. In terms of respondents age, most
respondent are aged 24 to 29 years old with 40% followed by 33% respondents
aged 30 to 35 years old. Respondents aged 18 to 23 years old represents 14%.
Respondents aged 36 to 41 years old represents 11% and respondents aged 42 and
above represent 2% of sample. Most of the respondents are married with 54%,
followed by single with 41% and others only 5%.
In
term of
respondents occupation, it shows the largest percentage of
respondents are private sector with 45%, followed by government sector 43% ,
student 8% and others only 4%. Regarding to respondents monthly income,
majority of respondents ( 35% ) who earned RM 1500 to RM 1999. 32% of
respondents represents income between RM1000 to RM 1499 followed by
income below RM1000 with 18% and last but not least 15% respondent who
earned RM2000 and above. Race of respondents was divided into three main
categories as shown in table 4.1 above. Most of the respondent are Malay that
represent 79% while Chinese 13% and followed by Indian with 8%.
38
4.1.2
General Information
Variable
How long
do
Frequency
9
Percent
9%
11
11%
80
> than 1 year
do you < than 2 times 23
80%
you
Scale
know < 1 year
Parkson Kota Bharu?
How
many times
1 year
shopping at Parkson kota Bharu
23%
16
16%
61
> than 2 times
Did the product purchased from Yes
97
61%
Parkson Kota Bharu satisfy
3%
2 times
in a month?
No
97%
you?
Table 4.2 Frequency Analysis of general Information

Based on the analysis from Table 4.2, most of respondent with 80(80%)
aware and know Parkson Kota Bharu more than 1 year, 11(11%) aware of
Parkson Kota Bharu and only 9(9%) know Parkson Kota Bharu less than 1
year.
Frequency respondent shopping at Parkson Kota Bharu, 61(61%) choose
more than 2 times in a month followed by 23(23%) below than 2 times
and 16(16%) shopping 2 times in a month.Did the product purchased
from Parkson Kota Bharu satisfy you?majority respondent says yes with
97(97%), only 3(3%) say no regarding to the statement.
It can conclude that respondent are aware about Parkson Kota Bharu.
Customer buying behaviour approve that customer getting loyal in term
39
of frequency shopping at Parkson and the product that they purchase are
fulfil customer need and wants.
4.2 Mean Analysis

4.2.1
Product Quality
Variables
Mean
Product quality is a factor that influence my

purchasing.
4.11
Satisfaction in purchasing is depending on

quality of the product that i buy.
4.24
The price of the product in Parkson Kota Bharu

are high because the quality of the product is
good.
3.70
You are a person that consider quality of the

product important during purchasing decision.
4.29
Quality of the product is more important than its

price.
4.04
Quality of the product that Parkson sell is better

than another store at Kota Bharu.
3.70
Overall, product that sell in Parkson Kota Bharu

is high quality product.
3.71
Table 4.3 Mean for Product Quality Variable

Table 4.3 depicts mean scores for product quality variable. The highest mean
value under this variable was You are a person that consider quality of the
product important during purchasing decision with 4.29 while the lowest value
mean was The price of the product in Parkson Kota Bharu are high because the
40
quality of the product is good and Quality of the product that Parkson sell is
better than another store at Kota Bharu which both was 3.70.
4.2.2
Service Quality
Variables
Mean
Services provided by Parkson Kota Bharu is

good.
3.88
The staff often tells customers about current

promotions at Parkson Kota Bharu.
3.84
I am satisfied wih the services provided at

Parkson
3.87
Parkson staff greet me with courtesy and

friendly when I come into Parkson.
3.94
All my question answered with the correct

information from Parkson staff
3.95
Staff always alert to the presence of the

customers.
3.76
Table 4.4 Mean for Service Quality Variable

The statement All my question answered with the correct information from
Parkson staff had the highest mean of 3.94 while the lowest mean for service
quality variable was Staff always alert to the presence of the customers with
3.76.
4.2.3
41
Brand Image
Variables
Mean
Shopping at Parkson Kota Bharu is very

comfortable
3.96
Display of the product in Parkson Kota Bharu

can influence my purchasing
4.06
Parkson is a store that has a good

environment compare to other store.
4.01
Products that Parkson Kota Bharu sell will

fulfill my preference.
3.68
Image of Parkson will influence my

purchasing decision
3.67
You are a person that considers comforts as

important during shopping.
4.23
Table 4.5 Mean for Brand Image Variable

The statement You are a person that considers comforts as important during
shopping had the highest value of mean of 4.23 while the lowest mean for brand
42
image variable was Image of Parkson will influence my purchasing decision

with value 3.68.
4.2.4
Customer Loyalty
Variables
Mean
I intend to continue shopping at Parkson for

a long time.
3.49
If i want to change to a new retail outlet, I

am willing to continue selecting this store.
3.73
Even if another store price is lower, I will go

on buying at Parkson.
3.52
I am willing to say positive things about

Parkson Kota Bharu to other people.
3.86
I will encourage friends and relatives to

shop at Pakson Kota Bharu.
4.12
To me, Parkson clearly is able to provide the

best service.
4.19
Table 4.6 Mean for Customer Loyalty Variable

Table 4.6 shows the means for customer loyalty items. To me, Parkson clearly is
able to provide the best service showed the highest mean value of 4.19 while the
lowest mean value was I intend to continue shopping at Parkson for a long time
with mean value of 3.49.
43
4.3
HYPOTHESIS TESTING
In this study, the researcher tried to test the hypothesis in order to analyze the
factors influencing customer loyalty towards Parkson Kota Bharu. For this
research, the methods used in testing the hypothesis are Correlation Analysis
and Regression Analysis.
4.3.1
Correlation Analysis
In this section, Pearson Correlation Coefficient is used to test the
hypothesis. Correlation expressed by Pearson-Product Moment
Correlation Coefficient to discuss the relevant relationship among
the product quality, service quality, brand image and the customer
loyalty. The hypothesis tested is that linear relationship exists
between two variables, dependent and independent variable, as
seen in the correlation coefficient (r). The null hypothesis,
however, states that no linear relationship exists between the two
variables. As in all hypothesis tests, the goal is to reject the null
hypothesis and accept the alternative hypothesis. In other words, it
is to decide that an effect, in this case a relationship exists.
44
The analysis can be interpreted as high, moderate and low

correlation based on the score computed. The score computed
could vary from +1.00 to -1.00. But for this study, the researcher
decided to use the suggested interpretation for value or r in
determining the strength of coefficient as proposed by Guilford
(1956).
r value
Less than .20
.20 - .40
.40 - .70
.70 - .90
.90 1.00
Interpretation
Slight, almost negligible relationship
Low correlation, definite but small relationship
Moderate correlation, substantial relationship
High correlation, marked relationship
Very
high
correlation,
very
dependable
relationship
Table 4.7 Interpretation of r Value That Being Proposed by Guilford (1956)
45
Correlations
Customer
Loyalty
Customer
Loyalty
Pearson Correlation
Service Quality
Brand Image
Pearson Correlation
Service Quality
Brand Image
.612**
.602**
.613**
.000
.000
.000
100
100
100
100
.612**
.493**
.645**
.000
.000
Sig. (2-tailed)
N
Product Quality
Product Quality
Sig. (2-tailed)
.000
100
100
100
100
.602**
.493**
.598**
Sig. (2-tailed)
.000
.000
100
100
100
100
.613**
.645**
.598**
Sig. (2-tailed)
.000
.000
.000
100
100
100
Pearson Correlation
Pearson Correlation
.000
100
**. Correlation is significant at the 0.01 level (2-tailed).
Table 4.8 Correlation Coefficient
According to table 4.8, correlation analysis result of four identified

variables. The
46
significant
relationship
between
four
identified
independent variable and dependent variable were discussed according

to the developed hypotheses.
Hypothesis 1 : Product Quality

H1o : There is no significant relationship between product quality and
customer loyalty towards Parkson Kota Bharu.
H1a
There is a significant relationship between product quality and

Referring to Table 4.8, it reveals that product quality variable is
positively associated with customer loyalty. The result from the table,
shows the correlation between product quality and customer loyalty, R
value is 0.612. According to the rules of thumb Guilford (1956), the
result moderate correlation which is substantial relationship.
Since the result show a moderate correlation, it means that product
quality one of the significant factors in influencing customer loyalty. It
also shows that the null hypothesis, H1o is rejected indicating that the
association is significant at 0.01 levels.
It is clearly stated that:
Significant level < 0.05 = Null hypothesis (H0) is rejected
47
In this study, the conclusion is:

From the result, there is a significant relationship between product quality
and customer loyalty. The conclusion for this finding is product quality is
one of the important factors that influence customer loyalty towards
Parkson Kota Bharu.
There is a research supporting this finding done by Jahanshahi et al (2011)

where they found out that better quality products tend to increase
customers loyalty. If a product fulfils the customers expectations, the
customer will be pleased and consider that the product is of acceptable or
even high quality. While studies on the way in which quality affects
customer satisfaction have been going for more than two decades, most of
the research on how quality affect satisfaction and loyalty in the past has
focused largely in pure product.
48
Hypothesis 2 : Service Quality

H1o : There is no significant relationship between service quality and
H1a
There is a significant relationship between service quality and

From the hypothesis testing based on the correlation coefficient test in the
Table 4.8, it shows that service quality is positively associated with the
customer loyalty towards Parkson Kota Bharu. It shows the result of
correlation between service quality and customer loyalty towards Parkson
Kota Bharu, R value is 0.602. Referring to the table 4.7, the result is
moderate correlation which is substantial relationship.
It means that it has moderate correlation or substantial relationship
between service quality and customer loyalty towards Parkson Kota
Bharu. From the correlation, it shows that the null hypothesis of no
association is rejected indicating that the association is statistically
significant at the 0.01 levels.
49


From the result, there is a significant relationship between service quality
and factor that influencing customer loyalty towards Parkson Kota Bharu.
The conclusion for this finding is service quality is one of the relevant
factors in determining the factor that influencing customer loyalty towards
Parkson Kota Bharu.
For the research question addressed by the research, it can be concluded
that service quality is one of the significant factors that influence customer
loyalty. This finding can be supported by the research done by Gurbuz
(2008) where the studies of the retail sector, service quality has been found
to be the main driver of behaviour related to the development of customer
loyalty, though other variables do have roles to play.
50
Hypothesis 3 : Brand Image

H1o : There is no significant relationship between brand image and
H1a
There is a significant relationship between brand image and

According to the Table 4.8, it reveals that brand image variables is
positively associated with customer loyalty. The result from the table,
shows correlation between brand image and customer loyalty, R value is
.613. According to the rules of thumb Guilford (1956), the results is
moderate correlation which is substantial relationship.
Since the result show a moderate correlation, it means that brand image
is one of the significant factors in influencing customer loyalty. It also
shows that the null hypothesis,
H1o is rejected indicating that the association is significant 0.01 levels.
51

From the result, there is a significant relationship between brand image
and customer loyalty. The conclusion for this finding is brand image one
of the important factors that influence customer loyalty towards Parkson
Kota Bharu.
Sondoh Jr et al, (2008) the statistical results showed that two brand image
benefits, i.e. appearance enhances and functional have significant impacts
on loyalty intention. This shows that in order to maintain and build loyalty
customers, marketers must focus on efforts to improve satisfaction among
its customers while at the same time strengthen their brand functional
appeal strategy.
52
4.3.2
Regression Analysis
Regression analysis is a powerful and flexible procedure for analyzing

associative relationships between a metric dependent variable and one or
more independent variables. It can be used in the following ways like to
determine whether the independent variables explain a significant
variation in the dependent variable, to see whether a relationship exists.
Second, to determine how much of the variation in the dependent variables
can be explained by the independent variables, to see the strength of the
relationship.
In order to carry out this result, Multiple Linear Regression, Coefficient of
Correlation (R), Coefficient of Determination (R2) was carried out.
53
Table 4.9 shows the regression results of the study.

Model Summary
Mod
el
Std. Error
R
Adjusted R
of the
Square
Square
Estimate
.720a
.518
.503
Change Statistics
R Square
F
Change Change
.52380
.518
34.356
df1
df2
3
Sig. F Change
96
.000
a. Predictors: (Constant), Brand Image, Service

Quality, Product Quality
ANOVAb
Model
1
Sum of
Squares
Mean
Square
df
Regressio
n
28.278
Residual
26.339
96
Total
54.616
99
Sig.
9.426 34.356
.274
a. Predictors: (Constant), BrandImage, ServiceQuality,

productquality
b. Dependent Variable:
loyalty
Table 4.9 Regression Analysis Summary of the Research Model and ANOVA
The linear regression analysis is presented in Table 4.9. The linear
regression test of the model reveals that the R-square of the model is
0.518. This means the model explains 51.80% of the variance in the
dependent variable that is customer loyalty towards Parkson Kota Bharu.
54
.000a
Meanwhile, the remaining 48.2% cannot be explained. It means that there

are other factors that can be used to determine customer loyalty toward
Parkson Kota Bharu. The coefficient of correlation (R square) obtained
from Table 4.9 is 0.518 is quite far to 1 and its indicates a positive linear
correlation.
For ANOVA table, F- value needs to be interpreted. F-value is equal to
34.356 at three (3) degree of freedom, with p value significant at 0.000
(p<0.05). Therefore the test is significant and can proceed to test each
hypothesis. Hypotheses were tested by referring to coefficient table.
According to coefficient table, the t-value is interpreted by comparing to
the degree of freedom (df) of t-distribution table, one equal to critical
value of 2.3662.
Critical value = N K 1
N = Number of respondents
K = Number of variables
So,
Critical value = 100 4 1 = 95
According to the table of T-Distribution, 0.01 level of significant the
critical value of 95 is 2.3662.
55
Coefficientsa
Standardized
Unstandardized Coefficients
Model
1
B
(Constant)
Std. Error
-.813
.469
Product quality
.488
.147
Service Quality
.401
Brand Image
.289
Coefficients
Beta
Sig.
-1.732
.087
.314
3.332
.001
.115
.314
3.500
.001
.133
.222
2.839
.032
a. Dependent Variable: loyalty
Table 4.10 Regression result between Customer Loyalty and the identified variables
From table 4.9, R2 = 0.518 which means 51.8%. It means that 51.8% have been
covered by product quality ( B = 0.314 ), service quality ( B = 0.314 ) and brand
image ( B = 0.222 ). By analyzing these result, the variable that give biggest
contribution to the model is product quality and service quality.
Interpretation
H1 : Calculated value (3.332) > critical value (2.3662) = Null Hypothesis (Reject)
56
Referring to the interpretation above, all the null hypothesis (Ho) are
rejected because of the calculate value are significant which is are greater
than the critical value. Since the level of significant for product quality
and service quality variables show 0.001 and brand image is 0.032 which
is less than 0.05 all the independent variables are significant. In this study
carrying out this test, the first objective that has been set by the researcher
is to identify factors that influence customer loyalty is achieved by
knowing that product quality, service quality and brand image are the
significant factors.
Research question addressed by the researcher are :
1)
What are the factors that influence customer loyalty?
2)
What is the main factor that gives impact to customer loyalty?
3)
Do the retail store emphasize on service quality, product quality and brand
image in their business?
All the research question addressed by the researcher have been answered
by carrying out this regression analysis. The factors that contribute to the
customer loyalty is product quality, service quality and brand image. The
main factor that give impacts on customer loyalty are product quality and
57
service quality, so the retail store industry need emphasize more on

product quality and service quality.
CHAPTER FIVE
5.0
CONCLUSION AND RECOMMENDATION
This chapter is the last part that contain conclusion and recommendation made by
the researcher. The researcher conclude the overall of the study in this research.
Recommendations were made by the researcher based on the finding of the survey
results and hopefully will improve the study in the future research.
5.1
Conclusion
Retaining customer in the retail industry has become a major objectives of
customer loyalty. Customer loyalty is considered to be essential for
building long term relationship with customer in order to achieve mutual
benefits of all parties. Although various drivers had been widely
implemented by organization, customers still tend to switch to
competition. The researcher wants to identify these factors that influence
customer loyalty.
This study was conducted to examine the drivers of customer loyalty
namely high quality of product, standard service quality and brand image.
The importance of quality of products and services on customer loyalty
and found out that loyal customers mostly lie in category of customers
58
who have used high quality products. This implies that better quality
products tends to increase customers loyalty. Other objectives to determine
the three variable that are potentially influence customer loyalty whether
there is significant influence between three variables towards customer
loyalty at Parkson Kota Bharu.
Respondents that participated in the study are people who make buying
decision and loyal towards Parkson Kota Bharu. All the 100 respondents
had participated will full cooperation in answering the questionnaire. By
using correlation analysis, the researcher proved that H1a, H2a and H3a are
acceptable. The three independent variable which is product quality,
service quality and brand image are positively related to the customer
loyalty.
Interpretation of Objective :
1)
To identify factors that influence customer loyalty.
Variables
Product Quality
Value
0.612
Pearson Correlation
Regression
Moderate Correlation, substantial Rejected Ho
Service Quality
0.602
relationship
0.613
relationship
Brand Image
relationship
Table 4.11 Factor Influence Customer Loyalty
59
From table 4.11, it reveals that product quality (0.612), service quality
(0.602), brand image (0.613) variables positively associated with customer
loyalty. The result is moderate correlation which is substantial
relationship.
2)
To identify the main factor that can ensure customer loyalty.

a. Product Quality (Beta = 0.314)
b. Service Quality ( Beta =0.314)
c. Brand Image ( Beta = 0.222)
By analyzing this result, the variable that give biggest contribution to
the model is product quality and service quality. Product quality and
service quality be the main factor influence customer loyalty towards
Parkson Kota Bharu.
3)
To identify the effort to be taken to encourage customer loyalty.

In order to identify the effort to be taken to encourage customer loyalty,
the researcher provide suggestion or recommendations to Parkson Kota
Bharu to gain customer loyalty towards retail store industry.
60
5.2
Recommendation
Several recommendations are put forward based on the response that had been
made by the respondent. The researcher hope that all the recommendation made
can help other researcher in improving the drivers of customer loyalty especially
Parkson Kota Bharu.
5.2.1
Product Quality
The concept of product quality is regarded as significantly construct for all
marketing managers. It is becoming a strategic tool to make a difference
from competitors. Customers tend to choose the product that is high in
quality. Even though high product quality is costly, it can be used for a
long time. To consumers, a high quality product is one that satisfies their
preferences and expectations. The implies that better quality of product
tends to increase customer loyalty. Parkson has always been known as a
department store that sell high quality and branded products. In sustaining
consumer minds and retention, Parkson should maintain the marketing
strategy in providing the good quality product which meet the customer
needs and wants to retain customers and building customer loyalty.
Researches by Jahanshahi et al. (2011) show that quality has been an
elusive concept in retail store industry. It is the totality of features and
characteristics of a product that bears on its ability to satisfy given needs.
61
If a product fulfils the customers expectations, the customer will be

pleased and consider that the product is of acceptable or even high quality
5.2.2
Service Quality
High service quality is regarded as a key to succeed in competitive service
markets. Customers might be satisfied when a firm provide better services
than their pre-purchase expectations. Parkson should trained their staff to
be more effective, efficient, courteous when attending service to their
customers. Customer trust also emerge when customers perceive positive
service quality from a firm, and believe the service firm would bring
preferable outcome for them. Customers might be satisfied when a firm
provide better services than their pre-purchase expectations. Customer
trusts also emerge when customers perceive positive service quality from a
firm, and believe the service firm would bring preferable outcomes for
them. Offering a high quality service is considered to be a visible way to
create customers trust and satisfaction, as well as obtaining competitive
advantage and building a long-term relationship with customers. Service is
a process where interactions between customer and service provider most
often exist. According to Liao and Hsieh (2011) that improving service
quality was the most important issue for retail store industry, especially
Tangibles, Reliability, Responsiveness, Assurance, and Empathy of
employees to be of the highest quality, therefore the retail store should
62
strengthen service quality. If a retail store wants to maintain the customer

loyalty, it needs to focus on satisfying the customers expectations and
actual experiences.
5.2.3
Brand Image
Brand image was defined by Zhang and Feng (2009) as the perceptions
about a brand as reflected by the brand associations held in consumers
memory. It is thought as the perception or mental picture of a brand
formed and held in customers mind, through customers response,
whether rational or emotional. Parkson should increase customer
preferences regarding brand image. Image can generate value in terms of
helping customer to process information and positive word about the
brand persuading friend and relative to buy the same product. According
to Ogba and Tan (2009) the measurement of brand image and its impact on
other customer related issues like: sales, promotion, and organizations
return on investments are important. Such research is urgently needed and
will provide deeper insight into an area that although very important to
sustainable profit and organizations are depending on brand for survival in
highly competitive environment.
63
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Study on Drivers of Customer Loyalty Towards Retail Store Industry

Study on Drivers of Customer Loyalty Towards Retail Store Industry

Customer satisfaction is important because many researchers have shown that

Market becomes so competitive.

Nowadays, businesses competing to cater

Study on Drivers of Customer Loyalty Towards Retail Store Industry

Study on Drivers of Customer Loyalty Towards Retail Store Industry

Nowadays, loyalty programmes have become an increasingly popular choice of

Study on Drivers of Customer Loyalty Towards Retail Store Industry

quality elsewhere. Therefore, customer satisfaction is not an accurate indicator of

Regarding to the Parkson Kota Bharu Trade Centre, in attracting customer to

Month (Year 2011)

Total sales (RM)

Table 1.1 : Amount of Sale on Members Day

Study on Drivers of Customer Loyalty Towards Retail Store Industry

Study on Drivers of Customer Loyalty Towards Retail Store Industry

Study on Drivers of Customer Loyalty Towards Retail Store Industry

To identify factors that influence customer loyalty.

To identify the main factor that can ensure customer loyalty.

To identify the effort to be taken to encourage customer loyalty.

What are the factors that influence customer loyalty?

What is the main factor that gives impact to customer loyalty?

image in their business?

Study on Drivers of Customer Loyalty Towards Retail Store Industry

1.5 Theoretical Framework

Figure 1: Theoretical Framework

Study on Drivers of Customer Loyalty Towards Retail Store Industry

Therefore, this research tests whether there is a significant relationship between

Brand image awareness perceives by customer would increase customer

Study on Drivers of Customer Loyalty Towards Retail Store Industry

Significant of the Study

Study on Drivers of Customer Loyalty Towards Retail Store Industry

Study on Drivers of Customer Loyalty Towards Retail Store Industry

The limitation of this research is the difficulties likely to be faced by the

Study on Drivers of Customer Loyalty Towards Retail Store Industry

1.10.1 Company Background

that entitle by Parkson such as stationery, toys, household, home

furnishing, electrical, hardware and gifts.

Study on Drivers of Customer Loyalty Towards Retail Store Industry

Having positioned customers as the forefront of business, Parkson KBTC was

Study on Drivers of Customer Loyalty Towards Retail Store Industry

Study on Drivers of Customer Loyalty Towards Retail Store Industry

2.0 LITERATURE REVIEW

2.1 Overview of customer relationship in Customer loyalty

Al-Rousan et al. (2010) states that customer loyalty as being a customer

Study on Drivers of Customer Loyalty Towards Retail Store Industry

Customer loyalty in service industry consists of three causally related

For Buttle and Burton (2001) customer loyalty is a by product of a dynamic

Study on Drivers of Customer Loyalty Towards Retail Store Industry

Perceived value expressed as the ratio of perceived benefits to perceived costs

Regarding to Lawson and Limayem (2004) the development of loyalty

Study on Drivers of Customer Loyalty Towards Retail Store Industry

2.1 The Important of Variable in Sustaining Customer Loyalty

According to Kumar et al. (2011), perceived value expressed cost is can

Study on Drivers of Customer Loyalty Towards Retail Store Industry

Product Quality encompasses the features and characteristics of a product

In accordance, the product quality dimensions can be divided into three

Private label brand supplement a retailers image and strengthen its

Study on Drivers of Customer Loyalty Towards Retail Store Industry

According to Al-Rousan et al. (2010) feelings and attitudes experienced by

Study on Drivers of Customer Loyalty Towards Retail Store Industry

SERVQUAL is probably the most popular service quality framework. One

Study on Drivers of Customer Loyalty Towards Retail Store Industry

Later, based on integrating previous studies and conceptual works, Zhang