Customer Satisfaction as a determinant of Customer Loyalty in modern retail - The slip between the cup and the lip

Abstract

Starting 1991, India has experienced major structural and economic reforms leading to a marked shift from protectionist policies to liberal ones. In the light of a lot of changes, there is the growing tendency among retailers to recognise the need to satisfy consumers and delight them to promote repurchase in this highly competitive scenario. It is, thus, imperative for the retailers to understand the drivers of customer satisfaction and customer loyalty as also to ascertain whether customer satisfaction really impacts customer loyalty. The present study, conducted on customers of Big Bazaar, an Indian Retail Chain, has attempted to study this very critical link between Customer Satisfaction and Customer Loyalty. It was hypothesized that Customer Satisfaction has no impact on Customer Loyalty. Primary data was collected through a structured questionnaire from participants from North West Delhi region. An analysis of the data revealed that contrary to hypothesis, customer satisfaction does impact customer loyalty (R2= 0.37). The results, however, reinforce the belief that all satisfied customers are not loyal and there is many a slip between the cup and the lip.

Keywords: Customer Satisfaction, Customer Loyalty, Impact, Retail Chain, Big Bazaar

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