Customer Loyalty Theory Analysis

3.2 CUSTOMER LOYALTY AND THEORIES

It is more economical for a company to keep customers loyal than if the company have to replace them (Marken, 2001). Loyalty as a concept has its roots from the consumer behavior theory and is something that consumers may exhibit to brands, services, or activities (Agyei & Kilika, 2014). Customer loyalty, which is defined as preferring a specified company in repurchases, plays a critical role to be successful in today’s competitive business environment (Durukan & Bozaci, 2011). Nasir et al (2014) stated that the ability to attract the right target market, making them buy/consume the product on a regular basis and in high quantities and advocating for the product enabling more customers to shift from the substitute

This was a conclusion from their study to know the role of individual characteristics on customer loyalty. The results show that some individual factors have positive and significant relationships with the customer loyalty; these factors are masculinity level, agreeableness, self-esteem, emotional stability, internal locus of control and openness to experience. Durukan & Bozaci, (2011) inferred from the research results that giving importance to customer loyalty creating and maintaining activities in societies and cultures, which has high level of masculinity, agreeableness, self-esteem, emotional stability, internal locus of control and openness to experience, would be a more profitable and effective approach for businesses. Loyalty is not determined exclusively by the intrinsic characteristics of service offered; it can also depend on external traditional activities, such as advertising and public relations, well known to those in charge of marketing (Nguyen et al 2013). Nguyen et al (2013) added that “to build customer loyalty and sustain it, relationship marketing can play a key role to influence positively customers’ perceptions of the organization and to enhance customer trust.” Customer loyalty is of prime importance for business

The fundamental works of Day (1970), Jacoby (1971), Newman and Werbel (1973) and Jacoby and Kiner (1973), inspected again in the well-known book of Jacoby and Chestnut (1978), have demonstrated the crucial significance between behavioral loyalty and psychological loyalty (or, just to maintain a strategic distance from disarray with the later dimension between psychological and behavioural loyalty, mental loyalty), in this manner illuminating that repurchase conduct is not an adequate state of customer loyalty. These creators concur in keeping up that loyalty is the non-irregular repurchase conduct (behavioral loyalty) of a brand, or gathering of brands, taking after a procedure of assessment (mental loyalty). They distinguish diverse types of loyalty, characterizing the repurchase practices that are not joined by a relating mental loyalty as "luck" buy. On the premise of these early works, investigations of loyalty have focused on two essential dimensions. From one viewpoint there have been investigations of the confirmation of loyalty practices for more than one brand, described by factor levels of substitutability/complentarity, (Wind, 1977; Jacoby and Chestnut, 1978; Wernerfelt, 1991; Keaveney, 1995), and in this manner the determinants of exchanging conduct. Then again