Customer loyalty

Customer loyalty marketing research: A comparative approach between hospitality and business journals

Abstract Businesses, including the hospitality sector discovered the importance of customer retention as a key success factor. Thus, customer loyalty is a topic that has received much attention since the 1990s as relationship marketing has become a popular marketing scheme. The purpose of this study was to review published research on customer loyalty to better understand its evolution and development in the hospitality industry. Specifically, the study took a comparative approach by examining published research from academic hospitality journals and business journals. A total number of 262 articles were reviewed. Topical areas, industry application, and research methods were discussed. Lastly, study limitations were discussed. Keywords     

Business research; Consumer behavior; Customer loyalty; Hospitality research; Relationship marketing

1. Introduction Hospitality marketers recognize that it is difficult for businesses to survive just by attracting new customers as most industry segments are mature and competition is so fierce. Additionally, service, as the core product of hospitality businesses, is distinctive with goods especially for being considerably affected by the customers‟ involvement and experience. The experience that exists in the consumer's mind is what creates a differentiation point from competitors so businesses strive to provide such products and services to satisfy the consumer's demand (Pine and Gilmore, 1998). Thus, hospitality marketers make eminent efforts to provide good experiences and ensure consumer delight by engaging in relationships with customers (Berry, 1983 and Morgan and Hunt, 1994). Many organizations progressed relationship strategies intended to maintain and enhance customer relationships and further obtain long-term competitive advantage. Hospitality marketers also believe that relational engagement leads to customer longevity, which is ultimately associated with customer loyalty (Berry, 1983 and Morgan and Hunt, 1994). Businesses, including the hospitality sector discovered the importance of retaining their existing customers as a key success factor. Thus, customer loyalty is a topic that has received much

attention since the 1990s as relationship marketing has become a popular marketing scheme. The attention toward loyalty marketing has not declined and businesses are still trying to find various ways to enhance the effectiveness of loyalty marketing (McCall and Voorhees, 2010, Sheth and Parvatiyar, 2000, Shoemaker and Lewis, 1999 and Srinivasan and Moorman, 2005). All in all, marketing research, including customer loyalty topics, in the hospitality industry has been consistently growing and many scholars made efforts to provide the research status quo (Bowen and Sparks, 1998, Dev et al., 2010, Oh et al., 2004 and Svensson et al., 2009). Based on the previous hospitality marketing research, this study attempted to take a closer look on a specific topic of customer loyalty. More recently, such an approach on narrowed area of interest has been employed in various hospitality and business review studies. Scholars such as Leung and Law (2007) analyzed research particularly on information technology within the hospitality industry, Lu and Nepal (2009) on sustainable tourism, Anderson and Xie (2010) on hospitality revenue management, Kusluvan et al. (2010) on human resources management issues in the tourism and hospitality industry, and Hesford and Potter (2010) on hospitality accounting as well. The purpose of this study was to review published research on customer loyalty to better understand its evolution and development in the hospitality industry. Specifically, the study took a comparative approach by examining published research from academic business and hospitality journals. This study analyzed topical areas and research methods by examining the prominent trends and further suggested directions for future research. 2. Literature review 2.1. Significance of customer loyalty Customer loyalty is described as a customer's repeat visitation or repeat purchase behavior while including the emotional commitment or expression of a favorable attitude toward the service provider (McAlexander et al., 2003, Petrick, 2004 and Shoemaker and Lewis, 1999). Numerous studies emphasize the value of customer loyalty to be significant. It is known that loyal customers‟ visit frequency is higher and make more purchase than non-loyal customers do. They are also less likely to switch to a competitor brand just because of price and other special promotions and bring in new customers through positive word-of-mouth which can sometimes save a huge amount of the expenses for advertising (Haywood, 1988, Oliver, 1999, Petrick, 2004 and Shoemaker and Lewis, 1999). Petrick (2004) argued that repeat customers are more than just a secure source economically, but they can also be information channels that casually create a linkage to their friends, relatives, colleagues, and other probable consumers and thus enable businesses to uphold a clientele base. One of the most essential theories of loyalty marketing is that a small increase in loyal customers can bring a significant increase in profitability to a business (Reichheld, 1993 and Reichheld and Sasser, 1990). Reichheld and Sasser (1990) found that a 5% increase in customer retention resulted up to a 125% increase in profits in their study in the service industry. Moreover, it has been known that it is six times more expensive to plan marketing strategies to attract new customers than it is to retain existing customers (Petrick, 2004). Companies realized they need to do all they can to retain the top 1% of the customers of the pyramid top as it was discovered that they generated as much profit as 50% of those at the bottom end of the pyramid (Forte, 2011).

On the whole, loyalty marketing emerged as being necessary and ideal as customer loyalty has been recognized as a major source of competitive advantage for firms by having a powerful impact on performance. It has been recognized that enhanced customer loyalty reduces customer acquisition costs and increases revenue, which ultimately lead businesses to greater profitability (Lam et al., 2004 and Reichheld and Sasser, 1990). Industry operators are fully aware of the positive impact that customer loyalty brings to their businesses and they have been constantly exploring various approaches to increase customer loyalty. Given the interest and its high recognition on customer loyalty, research on the subject expanded to various areas and industries both theoretically and practically. The domain of loyalty was limited to customers‟ repeat purchase behavior in early studies. However, research on customer loyalty evolved appreciably and subsequent studies started to propose the customers‟ psychological attachment to the service provider or the brand as an important aspect (Sheth and Parvatiyar, 2000). Overall, loyalty has been perceived as a multi-dimensional construct and its research progress shows immense development (Bowen and Chen, 2001). 2.2. The construct of customer loyalty To date, customer loyalty has been mostly accepted in the marketing literature as a three dimensional conceptualization: behavioral, attitudinal, and composite (Bowen and Chen, 2001 and Jones and Taylor, 2007). The behavioral perspective measures loyalty as the static outcome of a dynamic process including antecedents such as actual consumption, repeat purchase, duration, longevity, frequency, proportion of market share, and word-of-mouth recommendations (Baloglu, 2002, Jones and Sasser, 1995 and Mechinda et al., 2008). Probability of future purchase of a brand and brand switching behavior are also examples that have been addressed to assess behavioral loyalty (Jacoby and Kyner, 1973 and Ostrowski et al., 1993). Ultimately, behavioral loyalty involves the actual „share of wallet‟ – the degree of buying or using of the service – and their future purchasing intention (Jones et al., 2007, Jones and Sasser, 1995, Kim et al., 2008 and Tanford et al., 2010). Therefore, academic and the real business world both emphasize its importance since it is of utmost crucial to the service provider and it highly relates to revenue and prosperity (Chao, 2008). The attitudinal approach conceptualizes loyalty as a function of a psychological process (Jacoby and Chestnut, 1978) and measures loyalty in terms of a consumers‟ strength of affection toward a brand (Baloglu, 2002 and Petrick, 2004). Trust has been considered as a key factor in building customer loyalty (Bowen and Chen, 2001 and Morgan and Hunt, 1994). Emotional attachment or commitment could be defined as liking the company or the brand, enjoying the stay at a particular property, and having a sense of belonging to the company. Composite loyalty implies that neither the behavioral nor the attitudinal loyalty approach alone describes loyalty. Instead it suggests that loyalty should be simultaneously considered from a behavioral and attitudinal perspective (Backman and Crompton, 1991, Dick and Basu, 1994 and Petrick, 2004). Dick and Basu (1994) proposed repeat patronage (behavioral dimension) and relative attitudes (attitudinal dimension) to conceptualize loyalty. Relative attitudes were described into three categories: cognitive – those related to informational determinants toward a brand, affective – those related to feelings toward a brand, and conative –

those related with behavioral characters toward a brand. They argued that true brand loyalty exists only when consumers‟ attitude and intention all point to a focal preference toward the brand at the same time. Similarly, Oliver (1999) argued that consumers develop a sense of loyalty in the order from cognitive, affective, and to conative and finally in a behavioral manner. Since composite measurements of loyalty combine both the behavioral and the attitudinal perspective, customers‟ preference of product, frequency of purchase, recency of purchase, total amount of purchase, and propensity of switching brands are taken into consideration for measurement (Bowen and Chen, 2001). 2.3. Factors that influence customer loyalty Numerous studies attempted to identify the determinants of customer loyalty (Dick and Basu, 1994, Lee and Cunningham, 2001 and Yang and Peterson, 2004). Researchers may have distinctive ideas in conceptualizing loyalty, thus, resulting in different discussions in verifying the antecedents of loyalty. Nonetheless, it has been suggested that customer loyalty may be fostered with distinctive outcomes depending on its factors and therefore, it should be managed and integrated strategically (Shoemaker and Bowen, 1998). Overall, factors that influence customer loyalty were categorized into two big sets in this study: one related to internal factors, and the other related to external factors. Internal factors are described as factors associated internally, which affect the organization to serve its customers directly. The firm holds the ability to facilitate with the strategies and tactics. In contrast, external factors are conditions external to the firm and relate to how consumers recognize the brand with respect to the brand competition. These are often formidable as control is limited from the firm (Duffy, 2003 and Kotler et al., 2010). 2.3.1. Internal factors Examples of internal factors include the product itself (brand), service quality, promotion mix, and costs. A brand is the genuine value that customers demand today, thus a product that creates an extraordinary experience becomes a loyalty-enabling brand. Promotions and marketing tactics are utilized not only to create a strong brand from enhancing customer experience and building relationships, but also to efficiently manage competition. Service quality is a component of the product that customers perceive and it is known as a critical determinant of loyalty. Recovery strategies and service determinants are highly related to service quality as it has been measured as a form of attitude often linked to satisfaction (Duffy, 2003 and Kotler et al., 2010). Whereas satisfaction is either an end state or appraisal process resulting from exposure to a service experience (Oliver, 1993), quality refers to the evaluation of the service attributes that is primarily controlled by the service provider (Baker and Crompton, 2000). On the whole, it is expected that the better the perceived quality of services, the higher customers‟ intention to repatronize that service provider (Baker and Crompton, 2000 and Lee and Cunningham, 2001). Costs can be categorized into economic and transaction costs. Economic costs are costs that customers have to sacrifice to acquire a product or service (Monroe, 1990). Transaction cost is a type of nonmonetary cost that exists in exchange processes as a consequence of the interaction among various factors. The intangible characteristic of service makes such difficulty prevailing and gives rise to differences in the transaction costs (Williamson, 1987). Consequently,

transaction difficulty negatively affects customer loyalty. The service provider's increase in understanding customers‟ tastes and preferences speeds up the transaction process and further increases customer satisfaction and loyalty through customization (Lovelock, 1983). 2.3.2. External factors Examples of external factors include switching costs, situational factors, perceived value, satisfaction, commitment, and trust. Switching costs are the costs involved in changing from one service provider to another (Heide and Weiss, 1995). Switching costs are the costs that are expected to encounter in the future, whereas economic and transaction costs are those incurred in the present (Lee and Cunningham, 2001). Switching costs include monetary, behavioral, search, and learning related, thus can be economic and emotional (Yang and Peterson, 2004). Once a customer is involved in a transaction relationship, he/she is more likely to become behaviorally loyal because the cost of switching transaction partners gets higher. Customers often become “locked into” their service provider after considering information search cost, perceived risk, and substitutability of the service provider (Dick and Basu, 1994 and Lee and Cunningham, 2001). Marketing literature also suggests that consumers make purchases based on situational factors (Wicker, 1969). Situational factors can be understood as the “actual or perceived opportunity for engaging in attitude-consistent behavior (e.g., in the case of stockouts of preferred brands), incentives for brand switching through reduced prices (i.e., deals) of competing brands, and effective in-store promotions that might increase the salience of a competing brand over one normally preferred by the consumer (i.e., by impacting on the evoked set in a decision environment)” (Dick and Basu, 1994, p. 105). Perceived value is defined as a customer's opinion of a product's value. It has been associated with loyalty either directly or indirectly as it is essential for various marketing activities. Customers are strongly motivated to repeat patronage when they are provided with high value (Yang and Peterson, 2004). In context, one's intention to repeat patronage to a service provider will be lower when perceived cost is higher, as well as when service time is longer (Dodds and Monroe, 1984 and Zeithaml, 1988). Satisfaction refers to the overall affective response resulting from the service experience (Oliver, 1993). Many scholars related satisfaction to customer loyalty as a positive loyalty determinant (Bowen and Chen, 2001, Lam et al., 2004 and Yang and Peterson, 2004). The concept of trust is derived from the analysis of personal relationships because it is considered an inherent characteristic of any valuable social interaction and has become a popular issue due to the relational orientation in loyalty marketing (Morgan and Hunt, 1994). Trust may include various meanings, nevertheless, all the terms share the same idea that trust is a feeling of security based on the belief that the customer's behavior is guided and motivated by the favorable and positive intentions toward the service provider. Therefore, the lesser the doubt, the lesser the risk in the relationship, and thus, enabling the development of a valuable relationship (Ballester and Aleman, 2001). Commitment has been characterized in a variety of ways that can be classified into affective (emotional), continuance (obligation), and value-driven (benefits). Affective commitment is an

emotional attachment to the brand that creates a sense of belonging (Baloglu, 2002 and Jones et al., 2007). Continuance commitment is based more on relational motives, focusing on termination, or switching costs. It carries a sense of actual or perceived obligation that could engender negative emotions such as the feeling of “locked in” or “stuck” (Jones et al., 2007). Value commitment is the value of benefits received, yet distinctive from positive tangible benefits of reward membership, for being loyal to a specific brand (Mattila, 2006). 3. Methodology The hospitality journals that were reviewed were selected based on the study by McKercher et al. (2006). Hospitality journal rankings were decided on the aggregate importance scores in their study. The four journals that received the highest scores were selected and they are mentioned below. The business journals were selected based on the study by Hult et al. (1997). Scholarly marketing journals were reviewed from a marketing doctorate-/non-doctorate-granting institution criteria. The selected four journals for this study were overall ranked the highest. The hospitality journals included Cornell Hospitality Quarterly (hereafter, “Cornell Quarterly”), International Journal of Hospitality Management (hereafter, “IJHM”), Journal of Hospitality and Tourism Research (hereafter, “JHTR”), and International Journal of Contemporary Hospitality Management (hereafter, “IJCHM”). The business journals included Journal of Marketing (hereafter, “JM”), Journal of Marketing Research (hereafter, “JMR”), Journal of Consumer Research (hereafter, “JCR”), and Journal of Retailing (hereafter, “JR”). In total, 117 loyalty marketing focused articles published in four “hospitality-oriented” (hereafter, “hospitality”) journals were reviewed, and a total number of 145 loyalty marketing focused articles published in four “business-oriented” (hereafter, “business”) journals were reviewed from 2000 to 2010. Using a similar approach by Oh et al. (2004), one author classified the articles to keep consistency after a comprehensive discussion with the other author along with inter-rater reliability check. Loyalty focused articles were selected based on previous research as it was suggested that customer loyalty is a multi-dimensional concept that consists of various aspects. Thus, based on the literature review, articles with topics related to the construct of loyalty and influential factors on loyalty were chosen. Overall, topics included repeat visit/purchase, customer retention, emotional commitment, favorable attitude, relationship, positive word-of-mouth, and switching behavior (Dick and Basu, 1994, Haywood, 1988, Lam et al., 2004, McAlexander et al., 2003, Petrick, 2004, Reichheld, 1996 and Shoemaker and Lewis, 1999). Only referred papers were included for the review and any type of discussion notes, comments, reviews, and announcements were eliminated. Overall, this study reviewed research subjects, employed research methods, noteworthy research trends, and target industry applications. Several sub-categories had been adjusted for this study because they were redundant or omitted. Finally, comparisons were made between hospitality and business research on customer loyalty. 3.1. Research subjects

This study classified the research subjects based on the dimensions of customer loyalty and influential factors on loyalty. Consequently, the research subjects were categorized into two main areas with three sub-categories under each. For the construct of customer loyalty, studies that focused their investigation on customer loyalty from the behavioral perspective were classified under “Behavioral” and studies that focused on the attitudinal perspective were classified under “Attitudinal.” Others that included both perspectives were classified under “Composite.” The other main subject area was related to influential factors on customer loyalty, including subcategories of internal factor, external factor, and both. Studies that included internal factors that can affect customer loyalty such as service quality and cost were classified under “Internal” and studies that included external factors such as satisfaction, perception, and situational factors were classified under “External.” Those studies that included both factors were classified under “Both.” 3.2. Industry application Industry application was examined according to which industry the data was collected from. Conclusively, a total number of 12 categories emerged: Airline, Automobile, Casino/Destination, Electronics/IT, Finance, F&B, Hotel/lodging, General hospitality, General/Multiple, Grocery, Retail, and Others. A number of studies collected data from university students or faculty members under the condition that they were consumers. For example, if a study conducted an experiment on undergraduate students to test their perception levels on retail brand loyalty, the target industry was regarded as “Retail.” Therefore, industry application was categorized under “Retail.” Likewise, if a study surveyed data from panels or consultants to investigate a hotel's loyalty program, the target industry was regarded as “Hotel/lodging” since the study aimed that specific industry. “Casino/Destination” included casinos or destination resorts. “Electronics/IT” included computers, cellular phones, television, and online businesses. Finance included banks and credit card companies. Some hospitality studies did not purposely target to a specific industry or business; therefore, were classified under “General hospitality.” On the other hand, many business articles targeted multiple or general industries. Hence, they were classified under “General/Multiple.” Finally, a few other industries such as cruise, spa, cosmetics, newspaper, and telecommunication were categorized under “Others.” 3.3. Main analysis methods Many studies employed multiple data analysis techniques. However, this study only included the main analysis method of each article that was used to test the hypotheses or answer the research questions. Based on Oh et al. (2004), the main research analysis methods were classified into eight categories with some modification. Descriptive method was separated into two categories: “Descriptive/Content analysis” and “t-test/Chi-square/Cross-tabulation analysis/Correlation.” This study separated t-test, Chi-square test, cross-tabulation, and correlation from descriptive analysis because they tested significance. Explanatory methods such as content analysis and importance-performance analysis, used in qualitative studies, were categorized under “Descriptive/Content analysis.” In addition, there were few articles that utilized more than one main method to test the hypotheses or to answer the research question and thus, a category named “Multiple methods” was added. Most of those studies implemented mixed methods as the

research design. All other multivariate statistical methods and qualitative data analysis methods were used occasionally, which were categorized under “Others.” Time series analysis was excluded because none of the reviewed articles employed it. Overall, the eight categories of data analysis method is summarized as the following: Analysis of (co)variance (univariate and multivariate) (hereon, “AN(C)OVA/MAN(C)OVA”), Descriptive/Content analysis, Factor/Cluster/Discriminant analysis, Linear/Non-linear modeling, Structural equational modeling (hereon, “SEM”), t-test/Chi-square/Cross-tabulation analysis/Correlation, Multiple methods, and Others. GLM (general linear model) repeated measures was included in analysis of (co)variance, while regression analysis and logit models were all included in Linear/Non-linear modeling. 4. Findings 4.1. Study topic review and trends Table 1 represents the results of research subject classification by each journal. In summary, hospitality journals published a total of 117 loyalty articles (18%) out of 655 marketing articles. Business journals published a total of 145 loyalty articles (9%) out of 1655 marketing articles. Although the total number of loyalty articles published in business journals was higher, the overall percentage turned out to be lower because two business journals (JM and JMR) were already specifically marketing oriented. Table 1. Customer loyalty research by subject. Hospitality

Subject

Business

Journal Cornell IJHM JHTR IJCHM # % Construct Behavioral 3 1 2 3 9 7 Attitudinal 16 17 15 16 64 55 Composite 14 9 8 13 44 38 Factors Internal External Both

JM JMR JCR JR #

Total %

#

%

21 10 16 9 19 15

5 11 9

9 45 31 54 21 7 43 30 107 41 14 57 39 101 38

17 6 10

16 5 6

9 7 9

10 8 14

51 44 23 17 27 22 7 8 39 33 26 9

6 10 9

14 60 41 111 42 5 30 21 57 22 11 55 38 94 36

Total 33 Table options

27

25

32

117 100 56 34

25

30 145 100 262 100

Consequently, hospitality research studies focused more on attitudinal loyalty, while business research studies indicated a more even distribution among behavioral, attitudinal, and composite

loyalty issues. Both hospitality and business research showed a similar tendency in terms of factors that affected customer loyalty. Fig. 1 represents the comparison on the research subjects between hospitality and business journals. Subsequently, a brief summary is presented about each research subject on hospitality and business studies.

Fig. 1. Research subject comparison between hospitality and business journals. Figure options 4.1.1. Loyalty construct Attitudinal loyalty (55%) received far more attention than behavioral loyalty (14%) among hospitality journals. Some of the most common topics on attitudinal loyalty were related to customers‟ perceived value, repurchase intention, and satisfaction (Bowen and Chen, 2001, Gupta et al., 2007, Hanaia et al., 2008 and Skogland and Siguaw, 2004). Customers‟ emotional perceptions and attitudes (Mason et al., 2006 and Ryu and Jang, 2007), brand image and brand perception (Back, 2005 and Hsu, 2000), and emotional long-term relationships (Hendler and LaTour, 2008, Mattila, 2006 and Scanlan and McPhail, 2000) were some other attitudinal loyalty topics that were given much attention. In general, behavioral loyalty studies included topics related to the effectiveness of loyalty schemes and rewards programs (Lucas and Bowen, 2002 and Taylor and Long-Tolbert, 2002). Yet, results show a considerable focus on composite loyalty (32%) because many studies incorporated the attitudinal perspective (Baloglu, 2002 and Jang and Mattila, 2005). In contrast, not only was behavioral loyalty (31%) more researched than attitudinal loyalty (30%), but it was also more popular within business journals than hospitality journals (14%). Similar to hospitality journals, many behavioral loyalty studies from business journals attempted to understand the financial performance of customer loyalty programs (Liu, 2007 and MeyerWaarden, 2007), or dealt with topics related to schemes such as coupon proneness (Swaminathan

and Bawa, 2005), customized promotions (Zhang and Wedel, 2009), and loyalty cards (Demoulin and Zidda, 2009). Studies on attitudinal loyalty from the business journals turned out to be quite similar to those from the hospitality journals. Gustafsson et al. (2005), for example, investigated the dimensions of satisfaction-relationship commitment and how they impacted customer retention. Brand relationships (Aggarwai, 2004 and Thompson and Sinha, 2008), loyalty program experience (Allaway et al., 2003), and customer relationship management (Auha et al., 2007), and strengthening customer loyalty through emotional bonding (Yim et al., 2008) were investigated. Examples of composite loyalty studies include customers‟ purchase intentions by satisfaction level (Ganesh et al., 2000) and brand experience (Brakus et al., 2009). 4.1.2. Factors influencing loyalty Both hospitality and business journals showed a parallel trend in terms of determining the factors influencing customer loyalty. Overall, studies dealt with internal factors (44% from hospitality journals and 41% from business journals) more than external factors (22% from hospitality journals and 21% from business journals), and a considerable amount of studies covered both factors (33% from hospitality journals and 38% from business journals). In terms of internal loyalty factors, hospitality research concentrated on service failure and recovery strategies (McCollough, 2000 and Namgung and Jang, 2010) or service determinants (McCain et al., 2005), while business journals showed more interest on the products or specific promotions (Ailawadi et al., 2008 and Feinberg et al., 2002). Both hospitality and business research contributed a decent amount of studies related to information technology as well. For example, study topics such as website quality (Bai et al., 2008) and online business (ecommerce) antecedents (Srinivasan et al., 2002) were explored. Customer satisfaction was the dominant subject related to external loyalty factors within hospitality research (Bowen and Chen, 2001, Gupta et al., 2007 and Skogland and Siguaw, 2004). Business research included more various external loyalty subjects such as switching costs (Patterson and Smith, 2003, Lam et al., 2010 and Zauberman, 2003) together with customer satisfaction (Ganesh et al., 2000 and Yim et al., 2008). 4.2. Industry application review Table 2 represents the industry application categorization and Fig. 2 illustrates the comparison between hospitality and business journals. Most of the studies collected data from general consumers targeting all types of businesses as a whole (52%). Such results are due to the fact that nearly all the articles from the business journals were conducted from a broader perspective. In particular, data was collected frequently from business sectors such as retail (13%), followed by electronics (7%), grocery stores (6%), bank and credit card companies (4%), airlines (3%), and automobile (3%). Data collection from other industries such as cosmetics, newspapers, and telecommunication comprised a total of 10%. Table 2.

Customer loyalty research by industry application. Industry application Journal Airline Automobile Casino/Destinati on Electronics Hotel/lodging Finance F&B Retail General hospitality General/Multiple Grocery Others Total

Hospitality

Business

Total

Cornel IJH JHT IJCH J JM JC J # % # % # % l M R M M R R R 1 0 0 0 1 0 3 0 0 1 4 3 5 2 0 0 0 0 0 0 4 1 0 0 5 3 5 2 3

2

1

0

6

5

0

0

0

1 1

0

7

3

0 11 0 7 0

0 9 0 11 0

0 9 0 6 0

0 12 0 8 0

0 41 0 32 0

0 36 0 27 0

4 0 2 2 7

3 0 1 0 3

3 0 0 0 0

0 0 3 0 9

7 0 4 0 13

10 41 6 34 19

4 16 2 13 7

10

3

6

9

28 24 0

0

0

0 0

0

28 11

0 0 1

0 0 2

0 0 3

0 0 3

0 0 9

26 24 3 0 5 2

17 2 3

8 75 52 75 29 4 9 6 9 3 4 14 10 23 9

33

27

25

32

11 10 56 34 7 0

25

30

0 0 9

10 0 6 2 19

14 10 26 10 5 0 2 0

Table options

Fig. 2. Industry application comparison between hospitality and business journals. Figure options

Conversely, the range of businesses in the hospitality industry is limited so data collection for hospitality articles was specific. The majority of data was collected from the Hotel/lodging sector (36%), followed by the restaurant business (27%), and General hospitality businesses as a whole (24%) mostly from travelers and potential tourists. Additionally, data collection from casinos showed 5% and there was only one study from an airline company. Other industries such as convention/meeting, cruise, and resort/leisure/timeshare received increasing attention while spas were targeted occasionally, showing 9% all together. 4.3. Methodology review Table 3 summarizes the research designs and methods and figures of comparisons between the hospitality and business journals are illustrated below (see Fig. 3, Fig. 4, Fig. 5 and Fig. 6). In summary, 90% of the articles were empirical studies and 85% used a quantitative research design. Also from an individual perspective, empirical studies (85% from hospitality research and 94% from business research) and quantitative research designs (79% from hospitality research and 90% from business research) comprised the majority. While most of the qualitative studies were conceptual, there were a few qualitative studies that attempted to apply empirical research designs. Studies barely utilized mixed methods (see Table 3, Fig. 3 and Fig. 4). Those studies that implemented mixed methods resulted in multiple stages of data collection. Table 3. Customer loyalty research by method employed. Hospitality

Method Journal

Business

Total

Corne IJH JHT IJCH J JM JC J # % # % # % ll M R M M R R R

Type of study Conceptual

8

0

1

9

18 15 5 0

Empirical

25

27

24

23

99 85 51 34

Research design Qualitative

9

1

0

12

22 19 7 0

Quantitative

24

24

25

20

93 79 48 34

Mixed methods

0

2

0

0

2

2

1 0

3 12 8 13 21 27 90 0 2 0 3 2

0 2

0 3

0 1

1 1 10 9

0 0 5 5

0 0 0 0 1 0 20 3 33 23 43 16

2

0

4

6

4 1

2

3 10 7

19

22

19

77 66 20 13

1

18 52 36 12 50

Data collection/orientation Case study 1 Experiment 4 Interviews/focus 0 groups Primary field survey 17

5

2

1 8 6 26 10 13 23 23 29 94 90 7 6 2

34 13 22 85 3 5 2

16 6

Hospitality

Method Journal Secondary data Simulation Multiple Other

Total

Corne IJH JHT IJCH J JM JC J # % # % # ll M R M M R R R 9 2 3 0 7 12 10 24 11 1 6 42 29 54 0 0 0 0 0 0 1 2 0 0 3 2 3 1 1 0 0 2 2 2 2 1 0 5 3 7 8 0 0 1 9 8 0 0 0 0 0 0 9

Main analysis methods AN(C)OVA/MAN(C) 2 OVA Descriptive/Content 10 Factor/Cluster/Discrim 0 inant (Non)Linear modeling 7 SEM 3 t-Test/Chi/Correlation 5 Multiple methods 1 Others 5 Total

Business

33

6

3 4

21 1 3 3

1

3

1

7

0

1

14

25 21 7 0

2

3 12 8

37 14

0

1

0

1

1

0 0

0

0 0

0

1

0

6 12 3 3 2

3 12 2 3 0

9 4 1 0 3

25 31 11 7 10

22 26 9 6 9

21 17 1 6 1

1 0 0 3 0

10 53 13 34 1 2 0 13 0 2

38 23 1 9 1

78 65 13 20 12

30 25 5 8 4

27

25

32

11 10 56 34 7 0

21 4 0 4 1

19 3 29 20 36 14

25 30

14 10 26 10 5 0 2 0

Table options

Fig. 3. Customer loyalty research design between hospitality and business journals. Figure options

%

Fig. 4. Customer loyalty research method between hospitality and business journals. Figure options

Fig. 5. Customer loyalty data collection between hospitality and business journals. Figure options

Fig. 6. Customer loyalty data analysis methods between hospitality and business journals. Figure options The majority of the hospitality articles employed primary field survey (66%) as the main data collection whereas business articles showed a more comparable distribution within data collection methods among primary field survey (36%), secondary data (29%), and experiments (23%). Many business journal articles used secondary data or experiments compared to hospitality journal articles. On the whole, interviews and focus groups (6%) were seldom used and case studies (less than 1%) or simulations (1%) were found to be rarely employed (see Table 3 and Fig. 5). In terms of main analysis methods, SEM (26%), Linear/Non-linear modeling (22%) and Descriptive/Content analysis (21%), were most frequently employed for hospitality research. Overall, causal modeling data analysis techniques were more popular than general significant tests such as t-test, Chi-square test, and cross-tabulation analysis. Casual modeling data analysis techniques were used more often in business research as well. Linear/Non-linear modeling (38%), SEM (23%), and AN(C)OVA/MAN(C)OVA (20%) were the three data analysis methods utilized most commonly. On the contrary to hospitality research, analysis of (co)variance and GLM repeated measures was used more often because a large number of business studies were based on experiments that were aimed to find out the disparity among diverse groups or using stimulus. Despite Linear/Non-linear modeling was used frequently both in hospitality and business research, hospitality research employed more regression analysis while business research employed more logit models. Logit models were particularly employed more frequently by exploiting secondary data within business research (see Table 3 and Fig. 6). The objective of multivariate statistical methods such as factor analysis, cluster analysis, and discriminant analysis is not to test a hypothesis or answer a research question, therefore, was not used often by itself. However, these methods were often used together with other methods such as analysis of variance, regression, or structural equational modeling. Numerous studies used factor analysis or cluster analysis to categorize multiple variables and then used other statistical data analysis methods to test the hypotheses. Some studies used multiple statistical methods

because it was impossible to test a variety of hypotheses with a single procedure. Other methods such as correspondence analysis, multi-dimensional scaling, and ethnography, were seldom used for data analysis (see Fig. 6). 5. Conclusion This study reviewed customer loyalty articles published in four hospitality journals (Cornell Quarterly, IJHM, JHTR, and IJCHM) and four business journals (JM, JMR, JCR, and JR) from 2000 to 2010. In general, study results showed similar research trends in terms of study topic and study design between n hospitality journals and business journals. Both journals examined similar research subjects. The only exception was that hospitality research journals focused on more attitudinal loyalty while business research journals showed more interest in behavioral loyalty. Likewise, the majority of the studies conducted empirical research using quantitative research designs and most frequently selected primary field survey as data collection methods. Linear/Non-linear modeling and SEM were employed quite frequently in both areas, and Descriptive/Content analysis was used dominantly for qualitative studies in both areas as well. One division where the biggest discrepancy existed was that it seemed hospitality research focused more on hypotheses testing or answering research questions by using significance testing methods and regression analysis. For business research, more models using Linear/Non-linear modeling methods with secondary data (actual performance data) were suggested or more experiments using analysis of variance and GLM repeated measure methods were conducted. In sum, hospitality loyalty marketing research progressed by focusing on customers‟ emotion and the cognitive aspect of purchasing. While some research from hospitality journals adopted theories from sociology and psychology, the majority attempted to apply marketing theories and findings to further develop its research scope. For example, the loyalty framework (Dick and Basu, 1994), commitment-trust model (Morgan and Hunt, 1994), relationship marketing theory (Berry, 1983, Gronroos, 1990 and Gronroos, 1994), service quality theory (Reichheld and Sasser, 1990, Parasuraman et al., 1985, Parasuraman et al., 1988 and Zeithaml et al., 1996), satisfaction model (Oliver, 1980 and Oliver, 1993), involvement theory (Beatty et al., 1988), and brand equity theory (Aaker, 1991 and Keller, 1993) were most commonly integrated from business research to develop models. The number of studies that developed models solely based on hospitality research was scarce, which implies that more theory development needs to be done in hospitality. Loyalty research from business journals also focused on the role of satisfaction and commitment and implemented theories from social science and marketing. While theories such as relationship marketing theory and service quality theory found in hospitality research were also commonly adopted in business research, brand extension theory (Aaker and Keller, 1990) and brand equity theory (Aaker, 1991 and Keller, 1993) were recurrently applied. However, business research showed a higher rate of behavioral loyalty articles in an attempt to estimate various types of financial values and applied joint models by combining a considerable amount of theories and models that originated from economics and finance. Studies that adopted models from hospitality research did not exist, yet hospitality research was referred in some studies. Especially, as loyalty programs were first introduced from the airline industry, those studies mainly contained loyalty

program topics and compared loyalty program effectiveness to airline companies (Liu and Yang, 2009) or the type of rewards as customization has been recognized as a success factor in service industries (Agustin and Singh, 2005 and Noble and Phillips, 2004). As mentioned before, hospitality business products are more influenced by customer experience and emotion as service is intangible, heterogeneous, and the production and consumption occur simultaneously. Therefore, while study topics showed similar trends, hospitality research still conducted more research focusing on the customers, while business research focused more on the firm's performance. For instance, even on the same topic of loyalty determinants, hospitality research generally centered on what customers „think,‟ whereas business research normally investigated how customers „react.‟ As a consequence, it seems to make sense for the discrepancy to exist with hospitality research journals focusing more on attitudinal loyalty studies and business research journals more on behavioral loyalty studies. It goes well along with the fact that business research used far more secondary data and experiments to understand consumers‟ actual behavior or discover determinants to build models upon them. However, it is important to note that there exist differences in orientation between hospitality journals and business journals, thus it is complicated to derive certain conclusions from a comparative approach. It was expected that the research scope within business journals would be more diverse as they serve a broader audience than hospitality journals. Accordingly, business journals covered topics ranging from micro-level processes to macro-level issues from psychology, marketing, sociology, economics, to anthropology. JM and JMR were specifically positioned as the leading scholarly journal in marketing discipline covering a wide range of topics. The former focused on issues in marketing and marketing management where the latter focused more on marketing research, from philosophies, theories, to methods. JCR was particularly recognized for investigation on consumer behavior and JR focused more on the field of retailing including both products and services. Although some studies from JCR and JR covered the service industry, hospitality studies were rarely found. JM and JMR relatively had a higher ratio of hospitality studies, but still extremely low. Overall, business journals showed a higher level of being interdisciplinary by targeting a variety of areas. The impact factor for an academic journal indicates the average number of times published papers are cited up to two years after publication. It is calculated based on a three-year period and a higher value signifies higher frequency of being cited in a given period. Business journals showed an impact factor of on average of 2.85 (JM; 3.77, JMR; 2.8, JCR; 2.59, JR; 2.257) while hospitality journals showed 0.82 (Cornell; 0.549, IJHM; 1.382, IJCHM; 0.71, JHTR; 0.653). It is assumed that studies from business journals were cited more frequently because they covered a broad-spectrum and hospitality studies are relatively specialized. Additionally, the majority of business journals were published bi-monthly whereas the majority of hospitality journals were published quarterly (one business journal was published quarterly, and one hospitality journal was published bi-monthly) with an average number of 10 articles in each issue (except for IJHM). Therefore, business journals were superior in quantity. Customer loyalty and customer relationship management earned substantial amount of interest for research especially during the 1990s and early 2000s as chain hotels realized the importance of existing customers through brand extension. Research at that time focused on understanding

customers and developing closer relationships to retain them as loyal customers (Dev et al., 2010). Although, Internet marketing has emerged as a hot topic during the 2000s as the World Wide Web became prominence, customer loyalty still remains as one of the most frequently addressed topics in hospitality marketing research due to its prime importance (Kumar et al., 2010 and Tanford et al., 2012). It is expected that marketing communications, social media, service scapes, brand management, sustainability will continue to gain interest in the 2010s, but the core idea is to incorporate smart usage of data as hospitality businesses are clearly understanding the need to focus their investments on profitable relationships (Dev et al., 2010). Thus, the main theme of customer loyalty in hospitality marketing research is expected to emerge by incorporating data-driven marketing and a mixture of other marketing subjects. For example, evaluating the effectiveness of loyalty programs and schemes will continue to be conducted using a mixture of data, methods, and industries. Despite that loyalty programs were developed to increase profitability for a firm, it has also been questioned whether these schemes were merely provoked by competition due to negative results (Meyer-Waarden, 2007). More recently, hospitality marketers accentuated the importance of investing in profitable customer relationships (Dev et al., 2010), and many scholars attempted to investigate the effectiveness of loyalty programs in terms of its performance (Liu, 2007 and Lucas and Bowen, 2002). This trend may remain steady as attention on database marketing is growing. The use of integrated data with innovative analytical techniques is expected to support advanced research. As the main objective of loyalty programs is to encourage customers‟ repeat purchase behavior by offering rewards, whether tangible or intangible (Meyer-Waarden, 2007), future research should incorporate different types of rewards from a cost–benefit analysis approach as well. Research on consumer behavior from a dynamic perspective would be necessary to strategically manage loyalty program/schemes as new traveler markets and diverse segments are constantly emerging (Hanaia et al., 2008). Although the number of studies on branding and E-loyalty/IT were considerably smaller, these two research subjects are anticipated to acquire exceptional growth going on forward. Computers are now regarded as commonplace and the Internet serves as the main method for communication for the younger generations (Piccoli, 2010), so research will be needed to acknowledge how to effectively communicate and engage with generations born in the late 1970s and thereafter. Social media is a dynamic field rising as a hot topic and many hospitality marketers are trying to maximize its utilization. Consumers from diverse backgrounds are communicating more and exchanging abundant amount of information through social media (Piccoli, 2010). It is expected that it will continue to receive attention, if not more. Additionally, mobiles are stepping up as practical marketing devices as the usage rate of smart phones is extensively increasing nowadays (Sileo and Rheem, 2010). Therefore, the use of mobile technology is expected to rise as one hot topic for research along with social media. The Internet, social media, mobiles, and further advanced technology are likely to have an impact on customer loyalty and this should be investigated in various phases and aspects. Brand loyalty has developed into diverse areas from brand preference to brand community. However, sub-categories such as brand alliance and brand viability will probably emerge connected to customer loyalty. For example, GHA Discovery (global hotel alliance) is an upgraded loyalty program, where different hotel brands throughout the world participate under

one universal program (Garrido, 2011). Las Vegas Sands Corporation recently announced a 10year brand alliance licensing agreement with Intercontinental hotels (Stutz, 2010), and the Cosmopolitan Las Vegas announced a partnership with Marriott International as well (Benston, 2010). The hospitality industry often engages in a range of brand alliance to enhance revenue and increase market share. With the exploration of brand growth and the role of brands, brand alliances should continue emerging and research on its outcome is more likely to be pursued. Loyal customers have been known to less likely switch to a competitor brand (Petrick, 2004 and Shoemaker and Lewis, 1999) and it has been discovered that loyalty programs play an important role to customers on hotel brand selection (Barsky and Nash, 2003 and Barsky and Nash, 2006). Therefore, it would be interesting to see what type of impact brand alliance would have on customer loyalty and loyalty program performance. In terms of research methods, future academic research is expected to advance by continuously implementing causal modeling data in more dynamic stages as businesses are striving to obtain competitive advantages by understanding their customers more deeply. Besides, it would be beneficial by optimizing other study designs for data collection such as case studies, experiments, and secondary data. The majority of hospitality research exploited primary field surveys, which seems limited and under-utilized. Overall, there should be an implementation of diverse methods of data collection, data analysis techniques in future hospitality marketing research. To our knowledge, this was the first study that specifically reviewed customer loyalty articles within the hospitality industry that additionally took a comparative approach between hospitality journals and business journals. However, there is no study without flaws. Even though this study referred to the studies by Oh et al. (2004) and Hult et al. (1997), the selection of journals, the assortment of articles, and the classification process may be considered may be biased or subjective. Future studies may enhance the inter-coder reliability by including more systematic analysis and ensure the validity of the interpretations. Finally, observing previous studies for a period of ten years may not be enough to recognize its full evolution and development of research in the two areas of customer loyalty discipline. Regardless of the aforementioned limitations, this study is expected to contribute to the growing knowledge of customer loyalty research. Acknowledgement We graciouly acknowledge the support by the Caesars Foundation for this research. References 1. o o o o o

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