Cultures Effect on Store Loyalty

European Journal of Social Sciences – Volume 20, Number 1 (2011)

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Cultures Effect on Brand and Store Loyalty: A Research

in Turkey

Mehmet Ozer Demir

Elmali M.Y.O., Akdeniz University, Antalya, Turkey

E-mail: [email protected] Tel: +90-242-3102023; Fax: +90-242-73102023

Nedim Yuzbasioglu

Tourism and Hotel Management School, Akdeniz University, Antalya, Turkey

E-mail: [email protected] Tel: +90-242-3102023; Fax: +90-242-73102023

Abstract

The study suggests, and tests that culture has an influence on consumers’ loyalty intentions. This study argues that culture may overshadow marketing efforts as consumers are culturally brand and store loyal. Considering consumers are culturally or genetically loyal means marketing efforts are meaningless at some degree. Brand loyalty is a very complex structure, and this study proposes that consumers may tend to be loyal culturally. We are aware that culture does not explain all loyalty intentions, but has influence on consumers’ tendency to be loyal. Studies have shown that culture has a strong influence on consumers’ values, perceptions and actions that shape consumers’ attitudes and behavior. There have been numerous studies on the effects of culture on the marketing mix, this paper examines the influence of culture on consumer brand and store loyalty. Hofstede’s typology is operationalized in this study to empirically examine the cultural effects on consumers loyalty itentions. In this study is used Structural Equation Modelling. Keywords: Culture studies, Brand Loyalty, Store Loyalty, Hofstede, Structural Equation

Modelling.

1. Introduction Marketing practices in general are shaped under marketing environment conditions, specifically culture. Researchers has shown that culture has a strong influence on the values, perceptions and actions of the consumers (Trompenaars, 1994; Chow, Deng and Ho 2000; Chaplin and John 2005; Escalas and Bettman 2005; Fournier 1998; Muñiz and O’Guinn 2001), and that culture can influence advertising, marketing strategies and buying habits (Green, 1999; Grier and Brumbaugh, 1999; Simester et al., 2000; Taylor and Miracle, 1996; Ueltschy and Ryans, 1997), however, research on cultures effect on loyalty remains unsatisfactory. Culture is accounted for loyalty, as a factor that has a significant influence in brand activities (Cayla and Arnould 2008; Eckhardt and Houston 2002; Guzman and Paswan 2009). Brand managers should understand how cultural nuances influence loyalty so that in strategic planning stage they can emphasize brand characteristics effectively in a culture.

Numerous researchers studied loyalty, however, there is no consensus on loyalty; its definition remains pale, and its measurement depend on the study took place. While there are different approaches explaining the mental processes leading loyalty, the question whether consumers tend to be loyal culturally or genetically, or consumers become loyal remains still. Influence of cultural


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dimensions, such as individualism, masculinity, uncertainity avoidance, and power distance based on Hofstede’s cultural typology, a well studied and validated measure in cultural studies (Hofstede 1980, 2001), on brand loyalty and store loyalty is investigated in this paper.

The study suggests, and tests that culture has an influence on consumers’ loyalty intentions. This study argues that culture may overshadow marketing efforts as consumers are culturally brand and store loyal. Considering consumers are culturally or genetically loyal means marketing efforts are meaningless at some degree. Brand loyalty is a very complex structure, and this study proposes that consumers may tend to be loyal culturally. We are aware that culture does not explain all loyalty intentions, but has influence on consumers’ tendency to be loyal.

2. Brand Loyalty Martineau (1958) was first to claim that consumers not only attached to physicall benefits a store offers but also the abstract properties a store transfers under its’ brand. Store loyalty can be defined as loyalty toward a store. Store loyalty is well studied by retailers (Parker et al. 2009; Martos-Partal and Benito, 2009, Ray and Chiagouris, 2009). Advocates of store loyalty claim that consumers are not brand loyal, but store loyal. Consumers may seem to be loyal to a specific branded product, because the store which they are loyal to offers consumers that specific brand. It can be suggested that store loyalty should have a positive effect on brand loyalty, as consumers buy the brands offered by stores. This study also hypothesized the relationship between store loyalty and brand loyalty. Bonfrer and Chintagunta (2004) find a negative relationship between brand loyalty and store loyalty, but a significant relationship is claimed between store brands and store loyalty by Martos-Partal and Gonzalez-Benito (2009). Merillees et al. (2007) studied how retailer brand attitudes and store loyalty are realized accross culture and claimed that culture has an influence on favorable attitudes and it is the major basis of customer loyalty (Merillees et al. 2007).

H1: Store loyalty and brand loyalty are positively correlated.

3. Cultures Effect on Loyalty Culture can be defined as “the collective programming of the mind, which distinguishes the members of one human group from another” (Hosfstede, 1980). Culture refers to the homogene characteristics that distinguish human groups. Culture can influence consumer thoughts and actions (Herbig, 1998; Trompenaars, 1994), thereby affecting decision-making styles and purchase behaviors.

Although there has been some criticism about Hofstede’s research, especially on issues about generalizability of the dimensions (Yeh, 1988), many researchers still utilize this framework when studying cross-cultural influences on attitudes and behaviors. Hofstede’s survey, and his conclusions are not universally accepted (McSweeney, 2002). Hofstede’s cultural dimensions prove insightful and are often employed as the basis for cultural differentiation (Liu, Sudharshan and Hamer, 2000). Empirically and conceptually, Hofstede’s cultural dimensions are the most salient ones and proved to be relevant and robust in numerous marketing applications.

Hofstede’s (2001) cultural difference framework is performed in this study, because, from a theoretical point of view, the framework underlies values that drive attitudes that a consumer decides to remain committed to a brand, or a store. While other frameworks on culture have seven or more dimensions, Hofstede’s framework has the advantage of offering a very parsimonious description of culture limited to five dimensions. This makes it particularly useful in this study setup, as every dimension would increase the number of interaction effects that need to be considered, and thus implies a reduction in the analysis’s degrees of freedom.

The Hofstede’s cultural value dimensions include individualism/collectivism, power distance, masculinity/femininity, uncertainty avoidance:


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• Individualism/collectivism: Individualists are free from collectivistic obligations, but collectivists live in ‘‘a society in which people from birth onwards are integrated into strong, cohesive in-groups’’ with collectivistic bonds (Hofstede, 2001, p. 225). In individualistic societies, the social fabric and group norms are much looser. People tend not to follow social norms, but rather make decisions and initiate behaviors independently of others (Roth 1995). Several authors (e.g., Midgley and Dowling 1978) have emphasized that consumer innovativeness involves a tendency to initiate new behaviors, independently of others. Such predispositions should be valued positively in individualistic societies but valued negatively in collectivistic societies. H2: Collectivism and brand loyalty are positively correlated.

H3: Collectivism and store loyalty are positively correlated.

• Power distance explains the level of hierarchy in a society. Societies with higher power distance enjoy hierarchical order, thus vertically stratified power positions exist is order to create lots of power status. In great power distanced cultures, it is important to demonstrate the status to others. Consumers in high power-distanced cultures enjoy the status quo and are reluctant to accept or adopt accept or appreciate new products (Van den Bulte and Stremersch 2004; Yeniyurt and Townsend 2003), thus consumers in high power-distanced cultures tend to be committed to a brand, or a store. H4: Power distance and brand loyalty are positively correlated.

H5: Power distance and store loyalty are positively correlated.

• Masculinity is a preference for assertiveness, achievement and material success; contrasted with femininity, which emphasizes relationships, modesty and caring for the weak (Hofstede, 1980). More "masculine" societies place greater emphasis on wealth, success, ambition, material things, and achievement, whereas more "feminine" societies place greater value on people, helping others, preserving the environment, and equality (Hofstede 1980). In masculine societies, performance and achievement must be demonstrated, brands are a way to show one's success (De Mooij & Hofstede 2002; De Mooij 2010; Rogers 1983). An important aspect of this dimension is role differentiation: small in feminine societies, large in masculine societies. In masculine cultures, household work is less shared between husband and wife than in feminine cultures. Men also do more household shopping in the feminine cultures. H6: Masculinity and brand loyalty are positively correlated.

H7: Masculinity and store loyalty are positively correlated.

• Uncertainty avoidance is a culture’s level of tolerance with uncertainty. Societies with high levels of uncertainty have more rules, procedures and standards in order to avoid uncertainty and ambiguity. High uncertainty avoidanced cultures are less open to change and innovation, thus consumers resist to change from establisbed patterns. New brands are risky as their performance and use are more ambiguous than established products and brands. H8: Uncertainty avoidance and brand loyalty are positively correlated.

H9: Uncertainty avoidance and store loyalty are positively correlated.

4. Research Methodology In this section of paper we present analysis the results of research hypotheses. 4.1. Data Collection

Research took place in Antalya, a metropolitan of Turkey. Survey data is collected by 15 pre-educated pollsters, all are asked to return 25 surveys, a total of 363 participants participated in the study based on judgement sampling.


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4.2. Sample Characteristics

The sample tended to be male (67.9%), have completed at least a high school degree (68,5%), and be Professional(30,6%) and students (45,5%). The average age of this sample is 29 years and the average annual income $12000. Thus, this sample represents a segment of low socioeconomic status consumers and students. Sample characteritics are given in table 1. Table 1: Sample Characteristics

N %

Gender Female 116 67,9

Male 245 32,1

Age 16-25 214 60,6

26-35 54 15,3 36-50 56 15,9 50-83 29 8,2 Missing 10

Income 1000- 152 50

1001-2000 105 34,5 2001-3000 35 11,5 3000+ 12 3,9 Missing 59

Education Primary Education 71 20,6

High School 237 68,5 Graduate 32 9,2 Missing 17

Ocupation Civil Service 15 4,1

Employee 32 8,8 Not Working* 32 8,8 Student 165 45,5 Profesional 111 30,6 Missing

*Unemployed, housewifes, and retired.

4.3. Reliability Analysis

Three reliability statistics were calculated for each of the multi item scales developed. These are Cronbach's alpha, Goodness of Fit Index (GFl) for the Confirmatory Factor model, and t values associated with the individual indicators of the constructs for the confirmatory factor model (Bagozzi, 1980; Bentler & Bonett, 1980).

Cronbach's alpha is used as a measure of internal consistency, it comprises a number of items that make up a scale designed to measure a single construct, and determines the degree to which all the items are measuring the same construct. Cronbach’s alpha values calculated are 0,733 and 0,678 respectively for Hoftede’s cultural dimensions and loyalty intentions, satisfying Nunnally Cronbach alpha criterion of.70 (Nunnally, 1978).

Confirmatory factor analysis support an acceptable model (X2=544,97, df=237, X2/df=2,29, RMSEA=0,60, GFI=0,81), and all the t-values associated with the individiual indicators of the constructs are statistically significant (all t-values are bigger than 1,96). 4.4. Hypotheses Tests

Structural equation modelling (SEM) is operatinalized in order to test hypotheses. In a path analysis, every single one-headed arrow represents a relation. They can be assumed as regression equations, thus they give information about the relations power and significance, and moreover relations direction. The hypothesized model (Figure 1) and emprically derived model (Figure 2) are evaluated according to the


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t-values (t-values smaller than 1,96 represents insignificance, p>0,05) of the one-headed arrows (relations), and the model as whole is evaluated by goodness-of-fit (GOF) indices (Table 3).

Figure 1: Conceptual/Hypothesized Model

Figure 2: Emprically Derived Model


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Values over one-headed arrows are loadings and values in paranthesis are the t-values. Path analysis represent an acceptable model fit (X2=746,87, df=200, X2/df=3,73, RMSEA=0,087, GFI=0,84, CFI=0,89). As every one-headed arrow represents the relationship and relationships directions between latent variables, they are also hypotheses. Empirically derived model suggests that collectivism and masculinity donot influence loyalty intentions. H2, H3, H6, and H7 are rejected. Although unceranity avoidance has an influence on brand loyalty, and power distance has a direct influence on store loyalty, and an indirect effect on brand loyalty mediated by store loyalty, uncertainty avoidance does not effect store loyalty and power distance does not effect brand loyalty. H5, H8 are accepted, but H4 and H9 are rejected. Also, a positive effect of store loyalty on brand loyalty is observed (H1).

5. Conclusion The results of this study suggested that consumers might be culturally loyal. The structural equation model supported the notion that culture has an effect on consumer brand loyalty and store loaylty. Moreover, significant evidence is found between brand store loyalty and brand loyalty.

However, not all cultural dimensions effect loyalty, findings support H5: Power distance and store loyalty are positively correlated, and H8: Uncertainty avoidance and brand loyalty are positively correlated. The results indicate that people with high uncertanity avoidance tend to be brand loyal, and people with high power distance tend to be store loyal. Uncertanity avoidance refers that people are reluctant to take risk. As every new purchase is a risk, people with high uncertanity avoidance stuck to the brands that are experienced and validated with past past purchases, resulting brand loyalty. However, no significant relationship is found between uncertanity avoidance and store loyalty.

The analysis suggests a significant relationship between power distance and store loyalty. High power distance requires strict distinction of peoples status quos. In high power distanced cultures, it is important to demonstrate the status to others. Brands consumed and owned can be used for this purpose. However, the analysis indicate direct significant relationship only between power distance and store loyalty. We suggest that in their daily lifes, people have more opportunity to demonstrate their status quo during their shopping experience. In other words, people can see where you do shopping, however they can not see what you consume at home. Thus, high power distanced people tend to be store loyal as stores shopped can be used to demonstrate status quo more effectively than consumption of a certain brand.

The study also suggested that store loyalty has an effect on brand loyalty. As stores offer certain brands, consumers are limited to make their purchases from a bundle of brands sold in the store. The results support direct significant relationship between store loyalty and brand loyalty.

If the emprically derived model is examined as a whole, it can be suggested that uncertanity avoidance effect brand loyalty, power distance effects store loyalty, store loyalty effects brand loyalty, and power distance has an indirect effect on brand loyalty mediated by store loyalty. We suggest that high uncertanity avoidance consumers tend to be brand loyal in order to reduce risk, and high power distanced consumers tend to be store loyal in order to demonstrate status quo. Moreover, store loyal consumers tend to be more brand loyal.

Hoftede’s cultural typology is well studied concept, but few studies have evaluated the cultures effect on loyalty. However, it should be considered that the study is limited with one country, future researchers should include more countries for cross-cultural comparison and generalizability. Despite of the significant relationships found in this, loadings suggest a weak relation between culture and loyalty intentions. Also it is found thet not all dimensions has an influence on loyalty. Other explanations should be researched in order to understand loyalty concept.


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Cultures Effect on Store Loyalty

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