Balasubramani Ramaseshan

Decision Support Tool for Retail Shelf Space Optimization

Efficient allocation of shelf space and product assortment can significantly improve a retailers profitability. This paper addresses the problem from the perspective of an independent franchise retailer. A Category Management Decision Support Tool (CMDST) is proposed that efficiently generates optimal shelf space allocations and product assortments by using the existing scarce resources, resulting in increased profitability. CMDST utilizes two practical integrated category management models that maximize the total net profit in terms of decision variables expressing product assortment, shelf space allocation, review period, and order quantity. The implementation of the models demonstrates their robustness and that the net profit can be significantly increased when compared to the current industry practice.

Customer Referral Behavior: Do Switchers and Stayers Differ?

In today’s highly competitive market environment, service providers are beginning to recognize that customer referral plays an important role in enhancing firm value through cost-effective acquisition of new customers. While a significant body of research has focused on exploring customer referral, surprisingly limited research to date has addressed how customer referral may vary for different customer groups, particularly among switchers and stayers. This article examines the moderating effect of switchers and stayers on the relationships between service quality and perceived value on customer referral behavior. Actual referral data were collected from 441 customers of an Internet Service Provider in two waves for this study. The results show that the effects of positive changes in service quality and perceived value on customer referral behavior are stronger for recently acquired customers (switchers) than for long-term customers (stayers). The findings of the study suggest that investment in service quality and value improvements yield significantly higher returns (through greater customer referrals) for switchers than for stayers. Based on the findings, the authors recommend that service managers should identify and target newly acquired customers, who have switched from different service providers, right from the outset of the relationship with service offerings that signify higher quality and value in order to maximize customer referrals.

Does employee performance affect customer loyalty in pharmacy services

Purpose – Employees in community pharmacies play a far significant and distinct role compared to the employees in traditional retail stores. The purpose of this paper is to examine the effects of employee performance (EP) on customer loyalty of pharmacy services. Design/methodology/approach – Data were collected through a self-administered survey filled in by the customers of 25 community pharmacies. A total of 679 completely filled-in questionnaires were analysed. The proposed model was tested through structural equation modelling using AMOS 22. Findings – EP positively affects pharmacy customers’ perceived value (PV), trust and loyalty. PV and trust fully mediates the relationships between EP and customers’ attitudinal and behavioural loyalty. Unlike short-term customers, the long-term relational customers’ PV was found to have significant impact on their trust and behavioural loyalty. Research limitations/implications – This study is based on the Australian community pharmacy industries; hence, caution...

Status demotion in hierarchical loyalty programs: effects of payment source

ABSTRACT Hierarchical loyalty programs are being operated currently by many firms to improve customer relationships. While past work has demonstrated the negative effects of status demotion in such programs, research on how these effects may vary across different customer group based on payment source is almost nonexistent. This paper examines the moderating role of payment source (‘own money’ versus ‘others money’) on the effects of status demotion on customer attitudes and behavior in hierarchical loyalty programs. Analysis of data collected from members of airline loyalty programs show that the negative effects of status demotion on customer attitudes, loyalty intentions, and share-of-wallet are stronger for demoted ‘own money’ customers than for demoted ‘others money’ customers. The study provides a deeper insight about the effects of status demotion and points out that firms could possibly be endangering the loyalty of many potentially valuable customers, in particular among the ‘own money’ customer group.

Investigating status demotion in hierarchical loyalty programs

Purpose The purpose of this paper is to extend research on customer loyalty status and customer demotion by investigating if the effect of demotion on customer attitudinal and behavioral responses is the same for top-tier and low-tier customers in the context of airlines. Design/methodology/approach A survey was conducted with travelers intercepted at large airport terminals in Australia. Multivariate analyses examined group differences across status change (no change vs demoted) and status level (high status vs low status). Multi-group moderation structural equation modeling (SEM) analysis tested the moderating role of status (high status vs low status) on the effects of demotion on the relationship between customers’ attitudes and loyalty intention, and between loyalty intention and share of wallet. Findings This study shows that the detrimental effects of demotion on the relationship between customer satisfaction/commitment/perceived betrayal on loyalty intentions, and on the relationship between loyalty intentions and share of wallet are stronger for “high status” than “low status” customers. Research limitations/implications A cross-sectional design was employed to investigate customer demotion in the airline industry. Future studies could investigate different types of demotions in other industries by employing a longitudinal design. Practical implications The study provides new insight about the effects of status demotion and highlights that service firms could be jeopardizing the loyalty of numerous valuable customers, especially among the “high status” customer group. Originality/value This study reveals loyalty status moderates the effect of demotion on customer attitudinal responses and loyalty behaviors. It draws on social identity, social comparison, emotion and equity theories to explain the different effects of demotion on customers from different status level groups.

Combined effects of franchise management strategies and employee service performance on customer loyalty: a multilevel perspective

Abstract Although franchisee performance is likely to be influenced by franchisors’ management strategies, little is known about whether and how franchisors’ strategies affect franchisee employees’ performance. This study examines the combined effects of three franchisor management strategies, namely innovative culture, support services and autonomy on service performance of the franchisee store employees and the loyalty of their customers. Data were collected from a total of 38 employees and 679 customers of 25 franchisee stores. The study employs multilevel analysis on a nested data-set created by matching customer data with employee data for each store. The results reveal that customer loyalty of a franchisee store is positively influenced by the service performance of its employees and the support services received by the employees of the store from its franchisor. On the other hand, it has been found that franchisor management strategy such as innovative culture and autonomy negatively influence customer loyalty of the franchisee store. The paper discusses relevant theoretical and managerial implications of the findings.

Does the Age of Relationship Matter in Customer Referral Behaviour

Prior research has noted key differences between short-term and long-term customers in regards to their referral behaviour. However, these predominantly cross-sectional studies have focused on refer intention and referral likelihood as the primary measure of customer referral. There has been a scarce amount of research investigating actual customer referral behaviour in the relationship marketing literature. Using a combination of transactional and survey data from a local internet service provider (ISP), this research provides an empirical examination of the moderating effect of relationship age on the relationship between changes in the antecedents of customer referral (service reliability, service quality, customer service and perceived value) and customer referral behaviour. The findings offer some interesting implications for both relationship marketing theory and practice.

Factors Influencing Loyalty to Rewards Schemes in Small Businesses

This research is concerned with determining the potential antecedents of program loyalty in the context of small businesses. There are several component attitudes of high order constructs that determine loyalty towards a rewards scheme. These include program satisfaction, program perceived value, program affect and program trust. A multiple regression analysis indicated that the four predictor variables together explain 69.9 per cent of the variance (R-Square) in program loyalty. Program trust has the most influence in predicting program loyalty. This is followed by program affect, program perceived value and program satisfaction respectively. The implications for managers of small businesses are discussed.