Loyalty programs for the passenger transportation industry: a study of Zimbabwean Companies
Abstract
The paper examined firstly whether companies in the passenger transportation industry have utilised loyalty programs and then ascertained how much value the companies have drawn from them in enhancing market share, operational efficiency and financial benefit. Specifically, the study assessed the influence of loyalty program on customer relationship management, operational efficiency and profitability. The research was undertaken on ten companies who have implemented some form of loyalty programs through applied research’s in-depth interviews with the top executives. The qualitative methodology was utilised to simplify and manage the collection of data without affecting the environment and context. Data collected were further analysed via Chi-square statistics and the three hypotheses were tested at 5% level of significance. The results indicate that companies have begun to utilise loyalty programs in their operations, though not entirely sweating the programs to attain the best possible value from them. Most importantly, the study concluded on the positive significant relationship between loyalty program and customer relationship management, operational efficiency and profitability in the Zimbabwe loyalty program. Both filled a few highlighted gaps in the literature. Research for the road passenger transportation sub-sector offers useful theoretical and managerial implications as few studies have been conducted for the airline industry, which has successfully implemented loyalty programs through frequent flier schemes. It is recommended that companies should ascertain passenger behaviour through passenger registration, thereby enhancing the sustainability of the relationship. This study provides theoretical support for the importance of loyalty programs as passenger relationship management tools if appropriately applied and implemented. Loyalty programs offer companies across industrial sectors with useful benefits such as brand loyalty, business efficiency due to enhanced planning and profitability due to increase in patronage from passengers who are less sensitive to the marketing efforts of competing brands. This knowledge should, therefore, enable transporters to ascertain the value of adopting and using loyalty programs appropriately thereby enhancing their competitive advantage in a fast-paced world economy.
Downloads
References
Atieno, O. P. (2009) ‘An Analysis of the Strengths and Limitation of Qualitative and Quantitative
Research Paradigms,’ Problems of Education in the 21st Century, 13, 13 – 18.
Basera, C. H. (2014) ‘Maximizing Customer Retention through Loyalty Programs in Perfect
Competition Markets: A Case Study of Fast Food Retail Businesses in Masvingo Urban, Zimbabwe,’ International Journal of Education and Research, 2 (2), 1 – 12.
Beck, J. T., Chapman, K., & Palmatier, R. W. (2015) ‘Understanding Relationship Marketing and
Loyalty Program Effectiveness in Global Markets,’ Journal of International Marketing, 23 (3), 1 – 21.
Bergman, M. M., & Coxon, A. P. M. (2005) The Quality in Qualitative Methods, Forum: Qualitative
Social Research, 6 (2), 23-34.
Berman, B. (2006) ‘Developing an Effective Customer Loyalty Program,’ California Management
Review, 46 (1), 123 – 148.
Burnard, P. (2004) Writing a Qualitative Research Report, Nurse Education Today, 24(1), 174 – 179.
Burnard, P., Gill, P., Stewart, K., Treasure, E., & Chadwick, B. (2008) ‘Analysing and Presenting
Qualitative Data,’ British Dental Journal, 204 (8), 429 – 432.
Denzin, N. K. (1989) Interpretive Interactionism, Newbury Park, CA: Sage.
Dick, A. S., & Basu, K. (1994) ‘Customer Loyalty: Towards an Integrated Conceptual Framework,’
Journal of the Academy of Marketing Science, 22(2), 99 – 113.
Easterby-Smith, M., Thorpe, R., & Jackson, P. (2012) Management Research, 4th Edition, London:
SAGE Publications.
Furinto, A., Pawitra, T., & Balqiah, T. E. (2009) ‘Designing Competitive Loyalty Programs: How
Types of Program Affect Customer Equity,’ Journal of Targeting, Measurement and Analysis for Marketing, 17(1), 307 – 319.
Ferguson, R., & Hlavinka, K. (2007) Quo Vadis: Sizing Up the U.S. Loyalty Marketing Industry.
Milford OH: Colloquy.
Hossain, M. Z., Kibria, H., & Farhana, S. (2017) ‘Do Customer Loyalty Programs Really Work in
Airline Business? – A Study of Air Berlin,’ Journal of Service Science and Management, 10 (1), 360 – 375.
Jang, D., & Mattila, A. S. (2005) ‘An examination of restaurant loyalty programs: what kinds of
rewards do customer prefer?’ International Journal of Contemporary Hospitality Management, 17 (5), 402 – 408.
Johnson, B., & Christensen, L. (2008) Educational Research: Quantitative, Qualitative, and Mixed
Approaches (p. 34). Thousand Oaks, CA: Sage Publications.
Kang, J., Alejandro, T. B., & Groza, M. D. (2015) ‘Customer-company Identification and the
Effectiveness of Loyalty Programs,’ Journal of Business Research, 68(1), 464 – 471.
Lawrence, J., & Tar, U. (2013) ‘The use of Grounded Theory Technique as a Practical Tool for
Qualitative Data Collection and Analysis,’ The Electronic Journal of Business Research Methods, 11(1), 29 – 40.
Lichtman, M. (2006) Qualitative Research in Education: A User’s Guide (pp. 7 – 8). Thousand Oaks,
CA: Sage Publications.
Liu, Y., & Yang, R. (2009) ‘Competing Loyalty Programs: Impact of Market Saturation, Market
Share, and Category Expandability,’ Journal of Marketing, 73(1), 93 – 108.
Lovelock, C., & Wirtz, J. (2007) Services Marketing: People, Technology, Strategy. Prentice-Hall,
New Jersey.
Magatef, S. G., & Tomalieh, E. F. (2015) ‘The Impact of Customer Loyalty Programs on Customer
Retention,’ International Journal of Business and Social Science, 6 (8), 78 – 93.
McCall, M., & McMahon, D. (2016) ‘Customer Loyalty Program Management: What Matters to the
Customer,’ Cornell Hospitality Quarterly, 57 (1), 111 – 115.
Morgan, R. M., & Hunt, S. D. (1994) ‘The Commitment-Trust Theory of Relationship Marketing,’
Journal of Marketing, 58(3), 20 – 38.
Orb, A., Eisenhauer, L., & Wynaden, D. (2001) Ethics in Qualitative Research. J Nurs Scholar, 33 (1),
93 – 96.
Singh, R., & Khan, I. (2012) ‘An Approach to Increase Customer Retention and Loyalty in B2C
World,’ International Journal of Scientific and Research Publications, 2(6), 23-34
Sharp, B., & Sharp, A. (1997) ‘Loyalty Programs and Their Impact on Repeat-Purchase Loyalty
Patterns,’ International Journal of Research in Marketing, 14 (5), 473 – 486.
Strauss, A. L., & Corbin, J. M. (1990) Basics of Qualitative Research, 15, Newbury Park, CA: Sage.
Tao, S., Corcoran, J., & Mateo-Babiano, I. (2016) ‘Modelling loyalty and behavioural change
intentions of busway passengers: A case study of Brisbane, Australia,’ IATSS Research,
134(1), 1 – 10.
Temporal, P. (2000) Branding in Asia, John Wiley & Sons, Singapore.
Thompson, F. M., & Chmura, T. (2015) ‘Loyalty Programs in Emerging and Developed Markets: The
Impact of Cultural Values on Loyalty Program Choice,’ Journal of International Marketing, 23(3), 87 – 103.
Warusznski, B. T. (2002) ‘Ethical Issues in Qualitative Research,’ In Van den Hoonaard WC,
Walking the Tightrope: Ethical Issues for Qualitative Researchers. University of Toronto Press; pp 152.
Wicks, A., & Whiteford, G. (2006) ‘Conceptual and Practical Issues in Qualitative Research:
Reflections on a Life History Study,’ Scandinavian Journal of Occupational Therapy, 13 (2), 94 – 100.
Vilkaite-Vaitone, N., & Papsiene, P. (2016) ‘Influence of Customer Loyalty Program on
Organizational Performance: A Case of the Airline Industry,' Engineering Economics, 27 (1), 109 – 116.
Yi, Y., & Jeon, H. (2003) ‘Effects of Loyalty Programs on Value Perception, Program Loyalty, and
Brand Loyalty,’ Journal of the Academy of Marketing Science, 31 (1), 229 – 240.
Yin, R. (2003) Case Study Research: Design and Methods, (3rd Edition ed.). Thousand Oaks CA:
Sage
Copyright (c) 2020 Farium Kautsiro , Prof. Olawumi D. Awolusi
This work is licensed under a Creative Commons Attribution 4.0 International License.
Author (s) should affirm that the material has not been published previously. It has not been submitted and it is not under consideration by any other journal. At the same time author (s) need to execute a publication permission agreement to assume the responsibility of the submitted content and any omissions and errors therein. After submission of a revised paper, the editorial team edits and formats manuscripts to bring uniformity and standardization in published material.
This work will be licensed under Creative Commons Attribution 4.0 International (CC BY 4.0) and under condition of the license, users are free to read, copy, remix, transform, redistribute, download, print, search or link to the full texts of articles and even build upon their work as long as they credit the author for the original work. Moreover, as per journal policy author (s) hold and retain copyrights without any restrictions.
