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Linking customer loyalty to customer satisfaction and store image: a structural model for retail stores

Research paper by Sam Thomas

Indexed on: 18 Oct '13Published on: 18 Oct '13Published in: Decision : Official Journal of Indian Institute of Management Calcutta



Abstract

Customer loyalty has become a major concern for retail stores across the globe. A loyal customer is a source of competitive advantage through repeat purchase and positive word of mouth. India is on the verge of a retail revolution with the government planning to allow the entry of foreign retail giants to set up shops in India. The specific objective of this research was to develop an empirical model linking customer loyalty to customer satisfaction and store image. Based on the data collected from customers with leading supermarkets in India, a structural model was developed explaining 76.2 % of the variance in the customer loyalty. The study validated the measurement model of customer satisfaction and studied its impact on customer loyalty. The store image was also seen to have a positive impact on customer loyalty through the mediating variable customer satisfaction.