Factors influencing customer intent to switch supermarket brand in the UK – A case of Sainsbury supermarkets (Research).


Factors influencing customer intent to switch supermarket brand in the UK – A case of Sainsbury supermarkets (Research).

Chapter 1: Introduction

1.1 Research Background

Global service providers are mostly concerned with the aspects of attracting and retaining customers in organisations (Nguyen and Leblanc, 2001). The escalating development in technology and innovation has spurred the competitive nature of organisations leading to a stiff fight for more customers in the organisations (Prahalad and Ramaswamy, 2013). In reference to this, it is rather difficult to attract and retain customers if there are inconsequential frameworks and inconsistent distinctive features in the organisations (Morden, 2004). According to Morden (2004), establishing a long lasting relationship with customers is a critical strategy for a competitive organisation in the current technological market environment. Ideally, customers seek to switch from one service provider to another perhaps in case their needs are not addressed. Service quality is a cardinal factor of attracting and retaining the customers as outlined by Machado (2012). Excellent service quality to the customers may result to customers’ contentment which eventually translates to customer’s loyalty in the organisation (Jobber, 2010). Based on this assertion by Jobber (2010), organisations seek to devise strategies focused at improving the service quality in the organisation in order to render the organisations highly competitive. In reference to the study carried out by Feenstra (2010), the type of the products offered in a company can equally affect the customers’ switch behaviour leading to a low market share in the total market. Technically, this implies that if an organisation fails to offer standard products, it can translate to the customer’s discontentment hence switching to another organisation in search for satisfaction. Scholars have argued that it is more profitable to provide products and services to the regular customers than having to acquire new customers (Hill and Alexander, 2006).

 According to Lawler (2003), customers who express satisfaction are less likely to switch service providers. On that note therefore, it is crucial for an organisation to ensure that its customers are well catered for in order to foster satisfaction and retention.  As such, satisfied customers tend to exhibit long-term relationship with the company (Szymanski and Henard, 2001). According to Machado (2012), customers’ intention to switch brand barley occurs in the event of proper service quality provided to the customers. On the same footing, Machado (2012) shed light by arguing that the effect of ineffective service basically affects the overall trust and loyalty of the customers to the organisation. However, a recovery process as pointed out by Kurtz and Boone (2006) can be initiated in an organisation to transform service quality and make it effective in boosting the level of customers’ trust and loyalty. Kurtz and Boone (2006) continued to argue that building trust and loyalty fosters the level of customers’ satisfaction which is considered to be a requisite factor in attracting and retaining customers.

In the effort to minimise the customers’ intention to switch brand, it is important for an organisation to understand customers’ early (Decker, 2000). Some scholars such as, Evans, Moutinho and Raaij (1996) affirm that not all switching customers are dissatisfied because they may express a need for change though such cases are rare. As such, organisations should seek to identify such group of customers since the loss can greatly affect the performance level of the firm. Keen attention ought to be embraced by the firm since such group of customers do not give complains and therefore may be difficult for the management to prevent the customers’ switching behaviuor (Decker, 2000). Therefore, it is important to carry out this research in order to account for the factors that influence the customers’ intention to switch supermarket brand in UK’ supermarket.

1.2 Sainsbury Supermarket.

Sainsbury ranks the third largest food-retailer after Tesco and ASDA supermarkets in terms of share in UK ( IGD, 2014). Currently, it has about16.3 percent market share in the total market.  The holding company, J Sainsbury plc has got three major subsidiaries namely, Sainsbury’s supermarkets Ltd, Sainsbury’s Convinience Stores Ltd and Sainsbury Bank (J Sainsbury plc, 2014). Sainsbury has got about 145, 000 employees and this has credited the supermarket with an appalling fame in the supermarket industry making it one of the key players in the economy in UK (IGD, 2014). Sainsbury is known for its quality services and appealing prices to the consumers (J Sainsbury plc, 2014). The aspects of standardised products and attracting price have made the supermarket to attract and retain customers for long in the grocery sector ( Verdict Consulting Research, 2007). There are about 440 stores offering services to its consumers in the UK (J Sainsbury plc, 2014). This has made shopping rather convenient and consumers are likely to remain shopping at the supermarket for quite sometimes.

A striking feature in Sainsbury supermarket is its online home delivery shopping service which currently has attracted more customers to shop at Sainsbury (J Sainsbury plc, 2014)? On the same footing, Sainsbury sells home goods, such as bedding and cookeries online. Sainsbury has embraced diversity in strategic policies in regard to customer services in order to maintain customers’ retention. For instance, organisations strive to offer quality products at affordable prices which is deemed to be its market entry strategy in the competitive market. Additionally, Sainsbury has embraced low-pricing strategy. This strategy aims at offering quality products at a relatively lower price than the rivals in order to attract and retain more customers in the face of competitive environment (Harry, 2014). The company also adopted product differentiation which is charaterised by product variants (J Sainsbury plc, 2011). The company has strived to come up with varied products in order to suffice the needs and the desires of its customers leading to low perception of brand switch to its competitors. As a result of product differentiation strategy, Sainbusry has developed a broader market attracting consumers from all corners of the market sphere (J Sainsbury plc, 2014). All these strategies are set to maintain Sainsbaury at the top notch in the competitive supermarket environment by way of reducing customers’ brand switch to the existing key players (IGD, 2014).

1.3 Research rationale

This study has well defined theoretical and practical research rationale. Both of these perspectives are discussed below.

1.3.1 Theoretical rationale

In the previous studies, many researchers have done a lot of research on customer’s intention to switch behaviour. In response to the literature reviewed, theoretical rationale on the influence of customer’s loyalty, satisfaction and service quality greatly influence customers’ intention to switch supermarket brand in UK. As such, the performance level of the firm is largely pegged on these factors influencing the customers’ intention to switch brand. A company that fails to implement strategies aimed at improving the level of customer’s satisfaction, loyalty and service quality among other factors is likely to lose its esteemed customers to its competing rivals (Morden, 2004). These measures provide customers with compelling attitude to remain loyal to a particular organisation translating to a high perception of retention in the (brand and Alexander, 2006). The key rationale for this study is to contribute to the existing knowledge by providing more new knowledge and ideas in the field of business on the platform of retaining and attracting customers. The literature reviewed will help in filling the existing theoretical gaps by conducting the research. The findings will be crucial since they will form the basis for theoretical insights on the topic of influence of customers’ intention to switch supermarket brand. Similarly, the information will be helpful for the other scholars intending to undertake a similar research study topic in the future.

Much has not been done regarding factors that influence the customer’s intention to switch brand. However, the research study done by scholars like Prahalad and Ramaswamy, (2013)  justify that factors such as service quality, customers’ loyalty/trust, perceived customer’s satisfaction all positively influence the customers’ intention to switch supermarket brand. In this light, this study seeks to determine the factors that influence customers’ intention to switch supermarket brand in UK in a rather more elaborate manner. As such, the study will focus on expounding on the relationship between variables from a comprehensive view to enrich the extant literature.

1.3.2 Practical rational

 On practical ground, most of the organisations strive to make customers satisfied with their services at all times in order to improve the customer relation with the firm. Technically, the research will be useful as the senior management will get the requisite information on the appropriate strategies and policies on how to improve on the customers’ retention and attraction hence higher performance level in the firm. Additionally, the management will also use the research information as a referential point in determining the level of customers’ intention to switch brand in the competitive market. Additionally, the service providers will get the crucial information and insight about the influence of the key factors influencing the customers’ brand switch in the supermarket industry. Lastly, this study will form basis for the customers’ requisite information on the factors influencing the customers’ intention to switch supermarket brand in UK.

1.4 Research aim and objectives

Customers’ intention to switch brand has been affected by so many factors in supermarket business environment. Nguyen and Leblanc (2001) asserted that organisations seek to establish a good customer relation that enhances a conducive environment to retain and attract customers in the premise. One key factor that greatly influences the customers’ intention to switch brand is customer satisfaction (Hill and Alexander, 2006). Hill and Alexander (2006) defined customer satisfaction as the feeling of pleasure or disappointment that results from comparing the quality and performance of the products offered to the expectation of the customers. If the performance of the products fails to meet those expectations, the customer is dissatisfied and vice versa. Due to such perceived dissatisfaction, customers will develop a feeling to switch brand to the existing rivals in the bid to search for more satisfying products (Szymanski and Henard, 2001). Customer service is equally a factor that influences the customers’ intention to switch brand. This refers to the way customers are handled before, during and after purchasing and using goods and services (Machado, 2012). According to Machado (2012), an excellent customer service leads to high satisfaction of customer hence resulting to high perception low customers’ intention to switch brand. Additionally, satisfied customers are likely to exhibit repeat purchase behaviour. Customer loyalty is the customers’ relationship between customers and the company, persons and products offered (Dick and Basu, 1994). A strong bond should be established by the company in order to improve the customers’ repeat purchase behaviour that will result to low intention to switch brand. Finally the aspect of switching cost has a significant impact on the influence of customers’ intention to switch brand. This refers to the cost incurred when a consumer opt to change from one service provider to another (Burnham, Frels and Mahajan, 2003). In the supermarket industry, the higher the cost of switching it is, the more difficult it is for the consumers to switch brand.

Therefore, based on the above discussion, the main aims or objectives of this research will be to examine the factors influencing the customers’ intention to switch supermarket brand in UK a case study of Sainsbury and the specific research objectives are as follows:

  • the current situation of the UK supermarket market
  • To determine the key factors generating customers’ intentions of brand switching in the UK supermarkets
  • To propose the appropriate key measures to be taken in order to reduce customers’ intentions to switch supermarket brand.

1.5 Research Question

The main research questions are:

  • How is the current situation of UK supermarket?
  • What are the key factors generating customers’ intentions to switch barand in the UK supermarkets?
  • What are the appropriate key interventions that can be employed to reduce customers’ intentions to switch supermarket brand?

Chapter 2: Literature Review

2.1 Introduction

This section offers a discussion on the previous literature findings and conclusions regarding the topic factors influencing customer intent to switch brands in the UK supermarkets . Pertinent secondary information from credible sources including peer reviewed articles, credible books, and online sources are included in the review of factors influencing customer intent to switch brands in the UK supermarkets. Customer is the most important player in any industry. The efforts generated by the companies are generally directed to the potential customers in the market. Customer can either remain loyal to a particular product or tend to switch from the same to another preferred one.  This chapter presents the reviewed work of other scholars regarding customers’ intention towards brand switching with the aim to identify existing gaps that form the relevance of the study.

2.2 Consumer brand switching in the UK supermarket industry

The current food retail market exhibit a stiff competition and pressure to deliver and maintain the customer value with more challenging trading conditions. This shows that the industry should strive to ensure that customer retention/loyalty is highly observed to increase the chances of consumers’ re-purchase intention. Tesco has recently reported that its sales read below the expected volume in the market (Tesco plc, 2014). In UK, Tesco has spurred to expand its market share and capitalization Tesco Plc (2014). Tesco has maintained its lead in the food retail industry because of its loyal club program called Club Card (Sharp, and Sharp, 1997).  This club has been initiated to help to reinforce the customer and other business relationship in the web and in the process enhances the brand experience and value (Rowley 2007).While meeting the required needs and doing some important activities, customers can earn points. In this regard, Tesco has been competitive and other supermarket like Asda, Sainsbury are trying to emulate the loyalty initiative in the bid to achieve a competitive edge Tesco (2014). However, establishing and maintaining the loyalty programs for food retail firms is very expensive (Rowley, 2007). According to Smith et al., (2004) The club card by Tesco supermarket requires a considerable amount of investment to set up.

In the UK supermarket, customer loyalty and retention are becoming significant elements that affect the brand switching behaviour of consumers from one supermarket brand to another. These elements therefore are crucial in determining the survival of UK retail supermarkets in the hypercompetitive retail market.  Tesco, Sainsburys and Asda supermarkets are the renowned supermarkets in the industry and they seek to initiate strategies that are geared towards enhancing the level of customer retention to minimize the level of brand switching from one supermarket to another. Loyalty programs have heavily been adopted by several supermarkets in order to maintain customer loyalty in UK supermarket. The current situation of UK supermarket industry has heavily adopted the loyalty scheme. For instance Sainsbury has implemented a loyalty program called Nectar card program which is used as an example of customer loyalty programme to ensure customer loyalty in the supermarket (Gómez, Arranz, & Cillán, 2006). Nectar card. In the year 2010, Sainsbury reported that Nectar card program had more cardholders than the Tesco Club card programme as observed by Baker (2010). Conversely, Asda, Tesco and Sainsbury supermarket have implemented and used brand imaging and customer loyalty schemes in order to increase their market share and productivity. The UK supermarket chains currently reflect a stiff competition where Tesco, Sainsbury and Asda portray about half of total grocery sales worth around £100 billion (IGD, 2014).

Tesco supermarket has currently announced the biggest price cutting programme in 25 years, with £500m invested in lowering prices (Tesco 2014). This was introduced as a result of Tescos insiders who reported that a notable number of shoppers were switching from Tesco-branded food and household products to lower-margin big-name branded goods. In UK’s supermarket, the level of discounts being offered on the branded goods has greatly increased for the last one year. According to IGD (2014), shoppers have increasingly turned to supermarket brands in recent years. A year ago 30pc of consumers reported that they preferred food from a specialist manufacturer now the figure has increased to 35pc. In UK’s supermarket industry almost a third of consumers are returning to the supermarket brands they know best. They are seeking comfort in brands they have grown up with. This is because they are looking for brands that they trust to offer quality, value, and reliability. According to Emali (2008), there is stiff competition between Tesco, J Sainsbury and Waitrose supermarkets. Tesco emphasizes on its own-label brand from finest to its value range Tesco (2014). It aims to compete against J Sainsbury and Waitrose supermarket. J Sainsbury has launched a scheme that uses point-of-sale technology to award customers with coupons whenever they purchase products from the supermarket (J Sainsbury plc 2014). This is aimed to reduce supermarket brand switching from Tesco to other Waitrose and Sainsbury.

In UK, consumer brands in supermarkets like Sainsbury’s and Tesco remain high and competitive in reference to the study carried by Humby, Hunt and Philips (2008). The industry includes renowned supermarkets such as Tesco, Asda, J Sainsburys’ and Morrisons which have recently recorded a total share of 76% in the whole market and a market share of 57% for private label brands (IGD, 2014)

Supermarkets retailers in UK understand that customers not only are interested in paying lower price but also seek the ‘whole package’ offered by the brand. This has resulted to the increase in customer loyalty in UK supermarket industry. In the same breath, the industry has capitalised in advertising and promotional strategies with the aim of influencing brand switching among consumers. If a supermarket competitively enhance brand switching to attract customers, it will help in growing market share for a given brand or set of brands (Lloyd et al., 2014)

2.3 Factors influencing customers’ intention to switch in the supermarket industry

2.3.1 Service quality

Basically, service quality is the aspect that varies from context to context and therefore is difficult to standardise this aspect (Yanamandram and White, 2006). According to Landrum et al., (2008),  quality of service can be interpreted as the overall result perception of the service delivery conceptualised by the customer. It is the perceived magnitude of discrepancy between the expectation of the customer for a particular service and the realised mode of service delivery and performance. In that regard, it is conceived that service quality heavily depends on the performance of employees in the firm. According to Yanamandram and White (2006), the quality of service determines customer satisfaction in the firm and therefore is treated as a demand on firms. On their the basis of Yanamandram and White (2006) and Landrum et al., (2008),   quality can be perceived as a competitive weapon since it facilitates a firm to win the customer loyalty resulting to the increased level of market share in the firm. In the current supermarket industry, companies are offering exceptional services to the customers in order to gain and maintain a competitive edge against their rivals in the similar market (IGD 2014). This ensures that customers do not switch brand from a particular supermarket brand to another as observed by Kotler and Armstrong (2012). For example Tesco has maintained the competitive edge by introducing loyalty programs that involves club card in order to improve on the customer service offered (Humby,  Hunt and Phillips, 2008). The firm has factored in a considerable amount of time and money to ensure that its customers do not switch to the other brand (Tesco plc 2014). On the other hand Sainsbury supermarket has adopted Nectar card program which has positively enhanced the service quality resulting to increased customers loyalty (Gómez, Arranz, & Cillán, 2006).   On the basis of the above research, service quality affects overall interaction, contextual quality and the outcome quality and this influences the relationship between service quality delivered and customers’ satisfaction. In the line with this observation, service quality has positive impacts on the brand satisfaction, brand trust brand commitment and therefore significantly affect the tendency of customer to switch brand from one particular supermarket brand to another (Kotler and Armstrong, 2012).

Service quality measurement model

According to Parasuraman, Zeithaml, & Berry, 1988), the measurement model of service quality has got five identified dimensions of service quality. These dimensions include: reliability, tangibility, assurance, empathy and responsiveness. Tangibility refers to the physical aspects while reliability, assurance, empathy and responsiveness human involvement through interaction or during service performance. Specifically, reliability refers to the aspect of management personnel providing the expected service to the customers accurately and consistently.  Responsiveness denotes the act of willingness by the management personnel to assist and direct the customers and promote services. Assurance is seen as the act of personnel providing the services politely by ensuring the right things in order to establish trust and loyalty in the consumers’ mind. Finally, empathy refers to the ability of the personnel to share the feelings of the consumers. It also reflects on the individual’s attention of employees on customers. On the basis of this model, supermarket industry has embraced these dimensions in order to enhance the quality of services provided (Kotler et al., 2008). Subsequently, providing high quality services enhances brand image and this leads to customers’ brand loyalty. It also creates a platform for expanding customer base as more customers get attracted in the company as well (Kotler and Armstrong 2012).

Figure 1: Service quality measurement model (Parasuraman, Zeithaml, & Berry, 1988)

2.3.2 Shopping convenience and store environment  

According to Omar (1999) store environment and convenience are major factors affecting the UK supermarket industry. In his study, he argued that the general attribute of the store location and store layout significantly affects the brand loyalty of the customers. On the other hand, Kotler and Armstrong (2012) observed that store locations and outlets are key factors that influence consumers’ shopping convenience in the UK supermarket industry. Tesco, Asda, Sainsbury and Waitrose have various outlets to serve as the branches in various parts in order to increase the consumers’ shopping and purchasing patterns (Oldroyd, 2004). If a customer finds the store to be accessible, this will ultimately increase the chances of becoming loyal to that supermarket since they find it convenient and are satisfied with the stores’ assortment and services (Evans et al., 1996). This shows that stores’ environment is a factor that influences the consumers’ purchase behaviour and so the brand switching intention. If a customer finds it difficult to access a certain supermarket brand, there is the likelihood of switching the brand to the most accessible one because of shopping convenience. Several attribute of the supermarket environment such as the store layout, smells, display designs, noises, colour attributes and shelf spaces affect customers’ brand satisfaction (Evans et al., 1996). On the same breath, the music background offered in the supermarket in UK industry also influences the attitudes and the behaviour of the consumers. This is because of the fact that the slow and soft music contributes to the higher sales volume as customers get facilitated to spend more time and money in the favourable shopping environment. Such cool and attracting environment has facilitated the customer to maintain a particular supermarket brand in UK. Due to the competitive nature of UK supermarket industry, supermarkets strive to create a conducive environment that allows for shopping convenience to acquire and maintain the customers (IGD 2014). Acquiring the new customers cost around five to six times as much as maintaining the current ones. According to Lin and Chang (2003), shopping convenience in the UK supermarket industry has got significance impacts on purchase behavioural intention. This illustrates that in UK supermarket industry customers find it convenient to shop where they can access easily. Their purchase behaviour intention will vary on the basis of the kind of the supermarket environment and the shopping convenience offered by a particular supermarket. Kotler et al., (2008) argued that environment produces specific emotional effects in the consumers’ purchase probability.  According to their research, Kotler et al., (2008) pointed out that environment can be experienced through the senses such as the sense of touch scent and sound. Supermarkets brands are designed in such a way that they fulfil to these senses in order to influence the customers’ purchase behaviour.

2.3.3 Product variety

According to Feenstra (2010), consumers do determine the kind of the product variety to be offered in a certain company. In conjunction to this view, consumers have taste for different product variety. UK supermarkets such as the Tesco, Asda and Sainsbury supermarkets try to satisfy the demands for product variety by seeking to offer a wide range of products.  They are offering product variety in order to capture several customers with taste difference and budget constraints (Press release, 2014).  Chen and Feenstra (2005) looked at the aspect of products variety as a factor that determines the competitive nature of a particular supermarket brand. On the basis of Feenstra (2010) and Chen and Feenstra (2005), product variety, customers’ behaviour to switch brand may be dependent on the kind of variety offered by a particular brand. A good example of such switching is apparent in the current UK supermarket industry where a certain supermarket does not offer a particular product variety whereas another in the similar market offers as observed by Harry (2014). Tesco supermarket offers a great deal of whole foods quinoa at £2.15 while in Sainsbury supermarket the product variety is unavailable. In this case, most customers will tend to switch from Sainsbury to Tesco supermarket because of lack f the product variety of quinoa product (Harry, 2014). The essence of lack of product variety contributes to the aspects of dissatisfaction as the customer fails to get his expectations and aspirations met hence failing to create trust on a particular supermarket brand.

2.3.4 Price

In UK supermarket industry, price is one of the main factors that encourage brand switching intention of the customers (Harry, 2014). According to Tracy, (2014), price scheme refers to the situation that presents a variety of price lists. Additional fee is termed as the charges of the additional services such as charges of value added services, transport fee among others. Ideally, reduction of products price attracts maintains and attracts customers in the industry (Tracy 2014). In addition, lowering price of products and services tends to increase customer loyalty hence low brand switching intention among the consumers (Kotler and Armstrong, 2012).  In other words, the research reflects on the idea that price changes significantly determine the situation of brand switching behavioural intention of the consumers in the supermarket industry in UK. According to Harry  (2014),  price is a principal factor among others that persuades customers’ behaviour to switch brand in UK supermarket industry. For instance in Tesco the price of Crisps and dry vegetable oil (1litre) goes for £2.00 while in Sainsbury the same amount of cooking oil goes for £1.50. This means that customers are likely to switch brand from Tesco to Sainsbury supermarket because of the low prices in that particular product. On the contrary to this view Sokoloff (2008) came up with the idea that price is not always a factor to influence the brand switching intent of the consumer. Rather, he argued that customers who are quality conscious would lobby for the high price in order not to compromise their preferred quality of the brand and services offered by the company. In conjunction to this argument, Sokoloff (2008) observed that price basically influences those customers who have little income. Tesco, Asda and Sainsbury in UK, are using price as a factor of brand switching in order to convince customers to try new products as well as maintaining customer trust by giving customers price comparison (Tracy, 2014). According to Yoon and Kim (2000), the customers who are loyal to a certain UK supermarket brand they are much willing to pay premium to avoid risks of any change in the supermarket despite the increase in price.

2.3.5 Supermarket brand image

Czerniawski and Maloney (1999) viewed brand image as an impression of particular product held by a consumer. These scholars argued that brand image influences the behavioural intention of customer. Brand image can determine the level of customers’ brand loyalty of a certain supermarket brand. According to Yanamandram and White (2006), service quality and brand image directly affect each other on the platform of making decision on which brand to go for. In their studies, supermarket brand image provides an assurance about a particular brand and increases the possibility of making a decision on the product. As the definition of Czerniawski and Maloney (1999) suggests, customers creates a mental picture in their mind about a particular brand. The impression created in the consumers’ mind reflects the ideas feelings and consumption experience related to a company about the reputation and the image. The formation of mental picture in the customers’ mind about a particular product may be positive or negative as observed by Yanamandram and White (2006) and Czerniawski and Maloney (1999). They held the view that positive brand image enhances customer loyalty about a particular brand because it becomes easier to make decision. This contributes to the continuous relationship between the brand and the consumer (brand trust). Cadogan and Foster (2000) held a similar view by arguing that customers usually prefer famous brand name. These prestigious brand names such as Tesco Sainsbury Asda take an advantage of their brand names by attracting several customers. This brings about repeat purchasing behaviour that reduces switching intention to other small supermarket brands. However, their study failed to point out the positive and negative aspects of the brand that influences customers’ switch intention.

2.4. Key factors generating customers’ switching intentions in the UK supermarkets

2.4.1 Customers loyalty/trust

Tescos, Asda, Sainsburry and Waitrose supermarket have embraced and maintained a high spirit of customer loyalty in order to maintain the customers’ retention in their supermarket brand (Press Release, 2014). According to Wood (2005), customer loyalty is defined as the act of maintaining customers by use of various strategic schemes and innovative marketing tools. The scheme such as the loyalty card has generated diverse opinions and preferences among retailers as Demoulina & Zidda (2008) observe. According to Gómez,  Arranz & Cillán (2006), loyalty programs are crucial marketing and branding strategy that are initiated to ensure customers’ loyalty in the major supermarket chains like Asda, Sainsburys and Tesco in UK. These loyalty schemes are part of the marketing mix concept that suppose that organisations should be able to assess their customers’ needs and desires and be able to put way forward on how to satisfy those needs. Demoulina & Zidda (2008) argue that this is done in order to ensure that companies do not lose their own esteemed customers. Dick, & Basu (1994) expounded on the idea of Customer loyalty by asserting that it involves the aspect of emotional and behaviour link that exists between the company and their esteemed customers. Thus, loyal customers have the tendency to refer a new consumer in the company and this increases the chances of increasing the market share in the market. According to Jobber (2010), the longer the customer stays in a particular brand of supermarket the higher the profitability. This is influenced by factors such as the need to purchase greater quantities, positive word of mouth recommendations, regular prices and the willingness to pay higer prices because of the already built up trust with the supermarket. This shows that loyal customers with long-term relationship have significant financial influence in the firms.

In UK,  retail food suparmarkets such as the Tesco, Asda and Sainsbury implement loyalty schemes that highly boost loyalty in obtaining customer data (Harry, 2014). The act of awarding double points to club card members and discount vouchers encourage the customers loyalty hence gaining the brand loyalty that results to minimal intent to switch brand (Gómez,  Arranz & Cillán, 2006). Dick, A. S. & Basu, K., 1994 observed that managing customer loyalty is the one of major element of customer relationship management. This points that customers satisfied with the present service of organisation will get dissatisfied if the firm fails to consistently offer the same service later. So every supermarket in UK supermarket industry has been struck with the question how it can increase their loyalty level by adopting the right approaches (Press release, 2014). Loyalty becomes a winning factor for any organisation facilitating with high productivity, solid profit and feasibility for steady expansion, competing in present world (Verdict Consulting Research, 2007). When considering the present states of disloyalty, it is obvious that it would damage the corporate performance by 25 to 50 percent and possibly more (Verdict Consulting Research, 2007). Kotler, Cunningham  and Keller (2008) asserted that delighted customers become loyal to the organisation and customer relationship management (CRM) plays an important role in making customers loyal. Further, among the satisfied customers, completely satisfied customers only can be a delighted one. Thus CRM has to focus on customer delight rather than satisfaction. However, Hill and Alexander (2006) argue that misunderstanding of customer loyalty by the senior managers and marketing executives have misled strategies for securing the customer loyalty where many of them attract the customers by giving some bribes. Ideally, customer loyalty should be achieved when the suppliers satisfy the requirements raised by the customers better than their rivals as Dick, & Basu (1994) asserted.

2.4.2 Customers satisfaction

As a result of the competitive environment of UK supermarket, customer satisfaction has become a key factor in determining the customers’ intention to switch brand from one supermarket to another (Verdict Consulting Research, 2007). Due to this stiff competition in the industry, supermarket marketers have made efforts to ensure that their customers are fully satisfied. This is because according to Szymanski, and Henard (2001) customer satisfaction has been proven to have a positive influence on repurchase intention. Similary, Hill and Alexander (2006) pointed out that customer satisfaction is a predictor of customer loyalty. This means that the increase in customer satisfaction in the supermarket can yield significant customer loyalty and this would translate to encouraging customers not to switch brand from one supermarket brand to another. Jobber (2010) observed that customer satisfaction would lead to a positive effect on customers’ brand trust.  Chenget al. (2011) held a different view on the issue of customers’ satisfaction since he argued that customer satisfaction is more important than profit making. On the basis of this research, giving the customer satisfaction exceeds making profit since satisfying them would translate to profit making. According to Bergman and Klefsjö (1994), customer satisfaction is a principal factor affecting consumer’s behaviour intention to switch brand and the overall business performance. Decker (2000) observed that in order to realise customer satisfaction, an organisation should be able to provide exceptional customer service in order to meet customers’ expectations and aspirations. Jobber (2010) held the view that satisfaction of customers occurs when their aspirations, needs and aspirations are met and when their exceptions are not met but they still appreciate the performance. This observation fails to account for the satisfaction experienced by the customers even after failing to get their aspirations and needs met in the supermarket. In UK supermarket industry, the supermarket chains such as the Sainsbury, Tesco and Asda, customers get satisfied by providing shopping convenience and enhancing conducive shopping environment in order to motivate customers gain satisfaction diverse shopping aspects as observed by (Oldroyd, 2004). The conducive environment with soft musical beat, spacious shelves with attracting designs encourages customer satisfaction (Oldroyd, 2004). This is emphasised by Omar (1999) who argued that the atmosphere of place influences the customers’ purchase behaviour more than the product itself. This contributes to the positive influence of the customers to switch brand from one supermarket to another. Generally customer satisfaction occurs when the customer service delivery and performance exceeds consumer expectations (Omar, 1999). This shows that if the expected customer services fail to be met, there will be no customer satisfaction and vice versa. Tariq, Nawaz, Nawaz,  & Butt (2013) held the view that most customers do not complain when dissatisfied rather they switch to shop elsewhere. This study however fails to justify with reasons why customers who gets dissatisfied do not complain rather they shift to other brands. This research seeks to address the issues of dissatisfaction and ways in which supermarkets can improve on the same. In UK supermarket industry, retailers should ensure that customers’ expectations are addressed because fulfilling their expectation will make customers remain loyal in the firm (Hill and Alexander, 2006).

2.4.3 Switching cost

In UK supermarket industry, the stiff competition forces Tesco, Asda, Sainsbury among other supermarket chains are always in the race to search for better alternatives to satisfy their customers’ need (Verdict Consulting Research, 2007). Terminating a relationship with a certain brand for the purpose of trying a new one is basically expensive. For example, in switching Sainsbury brand to Tesco supermarket brand, customer may incur a lot of cost due to the aspects such as the transport cost and other related prevailing cost. This is what is called the switching cost (Kotler and Armstrong, 2012). The added cost does not only refer to monetary aspects but also psychological aspects such as the tension and risks associated with the new brand (Harry, 2014). Similarly, there is the need to incur cost of time and other psychological efforts in order to make a decision about switching from one brand to another (Dick and Basu, 1994). The added cost influences the customers to stay in one brand supermarket in order to save the prevailing charges. Switching cost is positively related to customers’ switching intention from one supermarket brand to another as observed by Yanamandram and  White, 2006).

2.4.4 Customer service

Customer service has got significant effects on the aspect of customer brand switching intention (Machado, 2012). Whether it involves selling of services or the tangible products, the magnitude of the services experienced by the consumer influences the customers’ loyalty in a particular brand company (Cadogan and Foster,2000). However, in most cases customer loyalty is pegged on the low prices of a particular brand. This is depicted in UK supermarkets where customers tend to defect from one supermarket to another if one supermarket offers lower product prices than the other (Harry, 2014). On the contrary to this view, supermarkets that have capitalised on the policy of Every Day Low Prices (EDLP) are likely to be more prone to unhealthy competition than those that have capitalised with ensuring their customers’ loyalty on offering superior and exceptional products or service (Press release 2014). In UK supermarket industry, Asda supermarket has chosen EDLP instead unlike Tesco which has chosen loyalty program as a strategy with great success. This program has worked successfully because Asda supermarket maintains high standards of service delivery and a comprehensive reputable range of products as well as low prices. This aspect of service implemented in the form of EDLP in Asda differentiates itself from other supermarkets’ EDLP programs that rely purely on EDLP to draw and keep customers on the basis of low prices. It is clear that Asda’s customers are mostly loyal not because of the low prices but because of to the whole shopping exercise. In UK supermarket industry, supermarkets are striving to ensure a competitive edge by keeping a superb service in order to attract and maintain customers (Press release, 2014).

2.5 Key measures to be taken in order to improve on customer retention

Due to the competitive nature of the UK supermarket industry, several measures need to be taken to ensure that UK supermarkets gain, improve and maintain customers’ retention. Obtaining customers’ retention ensures that customers do not switch brand to other supermarket brands (Kotler et al., 2008). Firstly, supermarkets should establish comprehensive and effective loyalty programs. These programs will involve giving customers a plastic card that earns some credit points every time the customers make some purchases from a particular supermarket. A customer who has joined this program has his/her details in the database and so it is easy to establish the purchase pattern of the customer (Gómez, Arranz & Cillán, 2006). In 2010, Sainsburys supermarket claimed that 10.8 million customers had earned points from their loyalty card program (J Sainsbury plc, 2011). This initiative is likely to significantly increase the customers’ loyalty hence retention in the UK supermarkets (Demoulina & Zidda, 2008). Secondly, UK supermarket should strive to increase and ensure quality customer service in order to keep customers satisfied in such a way that they can even go out telling others how well they get treated in a specific supermarket. Supermarkets should establish a good customer-reception relationship by actually delivering higher than the expectation of the customers. This program should seek to ensure exceptional and quality service that will build customer retention and loyalty. Poor service delivery will cause customers to switch brand to the existing rivals (Kotler et al., 2008). Thirdly, UK supermarkets should come up with the system for taking into consideration complains of the customers who are dissatisfied. Customers who are not given an opportunity to air his/her views will definitely switch to the other brand of the supermarket (Tariq, Nawaz, Nawaz,  & Butt, 2013). Giving a customer an opportunity to complain gives the management a chance to return the customers to a state of satisfaction and giving them a chance to further develop loyalty with the brand. Thirdly, Tesco Asda Sainsbury Waitrose, among other supermarkets should adopt automation tools that will facilitate convenience and efficiency that attracts customers in the supermarkets. As per Hill, and Alexander’s (2006) assertion, this will lead to improved customers’ retention hence reducing the tendency to reduce brand switch intention. Finally, the UK supermarkets ought to set up powerful courtesy system that improves on the interpersonal skills for the enhanced customer retention (Press release, 2014). This program involves speaking and treating customers kindly and politely. It will help customers to feel worthwhile and important creating a pleasant social environment in the supermarket. This will lead to a better, stronger, reinforced relationship hence increasing the level of customers’ retention.

Chapter 3: Research Methodology

3.0 Introduction

This chapter offers the methodology framework employed by the researcher in obtaining data information for analysis. It seeks to discuss and justify the data collection methods and procedures for the purpose of realising the research objectives. This section is structured into nine sub-sections namely: the research philosophy, approach, strategy, instruments, sampling methods, data collection procedures, data analysis, research ethics and research limitations.

3.1 Research philosophy

This research study sought to establish factors influencing customer intent to switch supermarket brand in the UK.  To achieve the objectives of the study, it is important for the researcher to comprehend and interpret the appropriate research philosophy that can be incorporated in the attainment of the research objectives. According to Creswell (2003) research philosophy can be defined as a logical and a systematic search for existing knowledge. In his study Creswell (2003) observed that there are two most commonly used philosophies in the business domain namely: interpretivism and positivism. Positivism philosophy encompasses natural science obtained from ‘positive’ observation in real life experiences (Webber, 2004). Conversely, the interpretivism philosophy refers to the subjective way of presenting the realities and can only be understood through interpretation (Bryman& Bell, 2011).

The nature of this research fitted to employ positivism paradigm because the results from casual interrelationships between variables were easily quantified (Festinger, DeMatteo & Marczyk 2013). Equally, this research fitted into the positivism philosophy because the factors influencing customers’ intention to switch brand could be obtained by looking at the past knowledge. The philosophy also enabled the researcher to determine how the various factors such as Customers loyalty/trust, customers’ satisfaction, switching cost and customer service influence the customers’ intention to switch supermarket brand. By adopting positivism philosophy, observable facts were established on the factors influencing customers’ intention to switch supermarket through the use of scientific measurement tools instead of researcher’s subjective views and opinions. Besides objectivity, the researcher made the final conclusion through establishment of causal relationships (Weber, 2004).

3.2 Research approach

In the process of research study, the research approach helps the researchers to determine the extent to which they comprehend the inherent theory (Creswell, 2003). The two main approaches that can be employed as argued by Mik (2006) are inductive and deductive approaches. Wilson (2010) argues that deductive approach is a process of scientific research that begins with predefined theories from the extant studies. Subsequently, the researcher observes and gathers facts then proceed to analyse the data information through interpretation in order to draw meaningful specific conclusions (Wilson, 2010). On the other hand, inductive approach begins by observing various phenomena then proceeds to make generalisation and develop new theories from the observations (Bryman and Bell, 2003). This research study suited the adoption of deductive approach. This is because the researcher used the existing studies about the factors influencing customers’ intention to switch supermarket brand in UK. The researcher then proceeded to generate new theories and form hypothesis with specific conclusions (Bryman and Bell, 2011)). In drawing specific conclusion the researcher established the platform under which customers’ intention to switch supermarket brand can be addressed in the management. Secondly, deductive approach enabled the researcher to determine the factors that contribute to customers’ intention to switch supermarket brand. As such, the researcher formed hypothesis derived from the extant literature on the customers’ intention to switch supermarket brand.  Inductive and deductive approaches are represented in the figure below.

Figure 3.1 Inductive and deductive approach (Wilson, 2010)

3.3. Research strategy

The main aim of this study was to investigate on the factors influencing the customers’ intention to switch supermarket in UK. In order to achieve the objective of this study, the researcher could adopt any of the three main research strategies which are applicable in the business context as observed by Saunders, Lewis & Thornhill (2009). Three major research strategies include surveys, case studies and experiments. In this case, the researcher adopted survey because the relationship of variables was involved in the topic to attain the research objectives. Secondly, the strategy enabled the researcher to be in a position to control the respondents resulting to a deduction of fundamental information (Saunders, Lewis & Thornhill, 2009). Owing to the fact that large sample size was involved, survey strategy was the most appropriate (Collis and Hussey, 2009). Finally, use of survey strategy enabled the researcher to easily perform analysis and processing (Remenyi, Swartz and Williams, 2008). On the contrary, case study would consume more time and financial resources hence necessitating the adoption of survey strategy (Collis and Hussey, 2009).

3.4 Research instrument

In the process of data collection, the research could adopt either questionnaire or interview method of collection. Based on Simons (2009) view, successful collection of data information is a benchmark of attaining the research objectives.  This study adopted the use of questionnaire as the appropriate data collection instrument in order to garner quantitative data information (Mik, 2006). The major reasons as to why the researcher in this study decided on questionnaire instrument is because; first, survey questionnaires are highly structured resulting to collection of reliable data information (Wilson, 2010). On the same note, the use of questionnaire helped the researcher obtain reliable data information because of considering a large sample size of population under study. Secondly, use of questionnaire saved time and financial resources because the researcher administered questionnaires to a relatively large population and were filled within a shorter time than with the case of interview. Equally, it eliminated the likelihood of biasness perceived in interview method as a result of researchers’ thoughts, opinions and ideas.  Finally, use of questionnaire enabled the researcher to quickly quantify the collected data information using information using computer software packages (Creswell, 2003).

Beside the advantages, using the questionnaire was a bit problematic in explaining some possible misinterpreted points as the instrument is normally standardised. To solve this problem, a researcher could have tried out the questions to a small population prior to the actual study (Remenyi, Swartz and Williams, 2008). The research instrument was divided into three sections. The first section entailed warm up questions pertinent to the topic. Part two entailed items to measure customers’ intention on factors such as customer loyalty, service quality, customer satisfactions, switching cost and customers’ intention to switch supermarket brand. The last section entailed questions seeking to obtain crucial information on the respondent’s demographic information.

3.5 Sampling

Sampling is a process of selecting a part of the entire population under consideration (Bryman, & Bell, 2011). The population in this research study included all the customers of Sainsbury supermarket. Therefore, because it wasn’t possible to interview all the customers of Sainsbury supermarket due to time and cost factors, a few customers visiting the supermarket were sampled. The researcher selected the customers through convenience sampling in order to make meaningful conclusion from the conveniently accessed customers visiting the supermarket (Saunders, Thornhill and Lewis, 2009). As such, the researcher was inclined to use the respondents who were easily available and ready to give information. However, convenience sampling failed to incorporate knowledgeable customers possessing relevant information about customers’ intention to switch brand.

3.6 Process of data collection and analysis

In the process of data collection, the researcher approached the persons in charge of Tesco supermarket prior to the actual data collection in order to obtain consent regarding respondents’ involvement. Subsequently, the researcher kindly requested for the respondents’ permission to participate in the data collection exercise and the questionnaires were distributed to the accessible customers at Tesco supermarket for filling. The researcher distributed 150 questionnaires for the sampled size of the population in Tesco supermarket and expected to obtain a valid respondent rate of 90%.

Data analysis is the process of interpreting data information obtained to make meaningful deduction and then applying the knowledge in reference to the research objectives in order to draw meaningful conclusion (Collis and Hussey, 2009). Out of the 150 questionnaires distributed 140 of them were handed in for the analysis.  After getting the filled questionnaires, the researcher did data filtering and cleaning so as to obtain the valid questionnaires out of those that were faulty, spoilt or filled inappropriately. Consequently, 135 questionnaires were valid which eventually formed the basis for the analysis. The data obtained was later analysed through statistical analysis using SPSS and Ms Excel. The SPSS and Ms Excel programs helped the researcher to interpret figure, charts and graphs of the obtained data information to draw conclusions for the research (Bryman and  Bell, 2011). Additionally, the researcher conducted correlation analysis and regression analysis that contributed to the achievement of research objectives (Wilson, 2010).

3.7 Data Validity and Reliability

Data validity can be defined as the ability of the research instrument to measure and give accurate information (Bryman and Bell, 2003). On the other hand, data reliability can be defined as the ability to consistently produce the same results in subsequent research work (Crotty, 1998). The researcher in this study strived to increase and maintain validity and reliability through pre-testing in pilot study. This was realised by trying out few questions based on the topic with a small number of respondents prior to the actual research study. The few questions were framed in such a way that the researcher obtained responses based on the customers’ perceptions on customers’ intention to switch supermarket brand. Further, the validity was increased through the use of standardised questionnaire as opposed to interviews (Mik, 2006). Respondents were assured of confidentiality and anonymity to minimise the possible fear that could have interfered with giving all the relevant information.

3.8 Research Ethics

Certain criteria should be followed by the researcher so as to meet some critical ethical standards requisite in the research process (Wilson, 2010). Research ethics are the moral standards and integrity that the researcher ought to observe during the research process (Festinger, DeMatteo & Marczyk, 2013). In the bid to ensure ethics in the process, the researcher obtained consent from the management of Tesco supermarket in order to collect data information from the customers at Tesco. The researcher maintained the ethics of humbly seeking the customers to participate in giving the information regarding customers’ intention to switch supermarket brand. The researcher deemed it crucial to explain to the respondents the key purposes of the study and the primary need of their participation before administering the questionnaires. The researcher assured anonymity to the respondents hence increasing chances of credibility and honesty due to the perceived confidentiality (Oliver, 2010).  The researcher also thanked the respondents after getting the filled questionnaire. Finally, the researcher assured the respondents that the information obtained would be only for academic purposes.

3.9 Research Limitations

The use of convenience sampling which is a non-probability method of sampling did not give all the customers an equal chance of participating in the study (Bryman& Bell, 2007). This limited the researcher to capture knowledgeable customers who had pertinent information regarding customers’ intention to switch supermarket brand. This problem however could have been solved by adopting a random sampling technique that does not encourage biasness (Festinger, DeMatteo and Marczyk, 2013). Some of the sampled respondents failed to offer information for their own reason. Therefore, the researcher could elaborate further and justify the reasons for offering the information for the study. On the same footing, the researcher could have encouraged the respondents to give truthful information by ensuring anonymity in the questionnaires which boosted confidentiality and privacy as well (Bryman, & Bell, 2007). Use of standardised questionnaire caused a problem of explaining some possible misinterpreted points by the researcher. However, this problem was solved by doing pre-testing with a small number of respondents prior to the actual research study. Time allocated to do the research was in adequate given the timeframe of the research study. As such, the researcher strove to manage the little time by prioritising events in respect to magnitude of activities in the study.


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