Saturday, September 21, 2019

Consumer Loyalty in UK Sports Leisure Industry

Consumer Loyalty in UK Sports Leisure Industry The sports leisure industry in UK is booming with possibilities. The consumer spending pattern across the entertainment hubs such as online casinos, outdoor sports and other holiday sports has been growing as a sweeter spot for both consumers as well as service providers (Skills Active, 2009). The core purpose of this study is to analyze through research findings if the consumers are loyal to a type of leisure sport based on socio-economical factors such as income, education and occupation etc. The sport and recreation industry as a whole employs around 621,000 people. This is spread across the public, private and voluntary sectors. (Skills Active, 2009) In such a highly competitive environment, customer loyalty has become an increasingly effective means for securing a firms profitability (Reinartz Kumar, 2002). Consumer loyalty refers to a customers repeated same brand purchase within a given category, based on a favorable attitude toward and preference for the particular brand. Empirical findings have revealed that increased market share and decreasing price sensitivity among customers are particular contributions of customer loyalty to a firms profitability (Chaudhuri Holbrook, 2001). The establishment and maintenance of a loyal customer base should, therefore, be (and in many cases already is) a key objective for service providers, since it promotes a sustainable competitive position in the market place. Customer loyalty rests in particular on the brand, which plays an important role in customer retention. A brand can be described as a cluster of functional and emotional values that promises a unique and welcome experience (de Chernatony et al., 2006, p. 819) for its customers. By creating unique associations and feelings among customers that are directly and exclusively connected to the given, the brand helps service providers differentiate themselves from their competitors. In addition to its differentiation function, the brand serves as a potential relationship partner for the customer. The customer brand relationship can evolve and develop through continuous positive interactions between the customer and the brand (Grà ¶nroos, 2007, p. 331) and provides them with the opportunity to offer their customers benefits that go beyond the core service (cf. Hennig Thurau et al., 2002, p. 234). In such relationships, customers perceive a brand as a legitimate partner in the relationship ( Sweeney Chew, 2000;). Customers construct relationships with brands so that they provide and add meaning and value to their lives (Fournier Yao, 1997). This value is generated by the relational benefits resulting from the relationship with the brand as perceived by the customer (cf. Aaker, 2002, p. 95). Ultimately, the customer decides whether the relationship with a given brand generates value or not. Hence, it is fundamental for the establishment of customer loyalty to understand what potential and existing customers expect from their relationship with the brand. However, since customers personalities and lifestyles differ, as does their evaluation of the relationship with the brand, customer characteristics must also be taken into account. With the objective of fostering customer loyalty, sports leisure service providers in UK introduced loyalty schemes. These so called club memberships, sports complex memberships and other hospitality tie ups through credit card providers etc (Plimmer, 2006). While these programs attract a great number of leisure sports customers, skepticism has been expressed whether such programs in fact lead to true customer loyalty based on a positive attitude toward and preference for the brand. Critics assert that the reason why customers repurchase a service again from the service provider rests alone on the rational and economic benefits the hospitality provider offers (Dowling Uncles, 1997). In the past two decades interest in service quality has strengthened as research has shown how improvements in quality can lead to improved organizational performance and competitiveness (Douglas Connor, 2003). To evaluate how well their companies are meeting customer needs, service managers often use measurements of service quality and customer satisfaction (Dabholkar, 1995). Therefore, service quality and customer satisfaction have received much attention from service marketers and academic researchers (Spreng MacKoy, 1996). In addition, Taylor (1997) has noted that the two constructs (service quality and customer satisfaction) have became very important for marketing theory and practice, since many researchers have indicated their relationship to desirable consumer outcomes (Spreng MacKoy, 1996). The majority of services, including sport services, have helped create more demanding and discerning customers. Increasing expectations of sport services have led managers to become customer focused, which in turn has resulted in the introduction of customer care initiatives in order to improve the quality of service provision (Guest Taylor, 1999). A sport service provider can reduce the detrimental impact of effective factors by first ensuring that its customers are as highly satisfied with its services as possible (Javadein, 2008 Sports Leisure Service Loyalty). Sport organizations are better positioned to reap the positive outcomes associated with having a largely satisfied customer base if they have an understanding of those factors that contribute to their customers satisfaction because meeting customers expectations for key service quality attributes should lead to satisfied customers who, in turn, will remain loyal to the service and recommend it to other potential customers (Javadein, 2008 Sports Leisure Service Loyalty). In summary, sport managers should be interested in understanding what it is about their service that specifically influences their customers behavior. They need know that, what specific aspects of their services influence customers in terms of their satisfaction and their perceptions of service quality, which, in turn, lead to behavioral loyalty. Unfortunately, the work that integrates the role of service loyalty within the context of service marketing variables like service quality and customer satisfaction has received less attention. There have been very limited attempts to investigate the relationship between service quality and loyalty in the context of sport (Javadein, 2008 Sports Leisure Service Loyalty). In this research, it is examined if their exists loyalty amongst the consumers for sports leisure services based on their strata segmentation based on their education, income, occupational status and segregated residence. PROBLEM DISCUSSION Leisure sport seekers can get to indulge in sporting and recreation in schools, offices, and while on vacation and at other times too (Mintel, 2009). Briefly the following avenues for leisure sports can be availed by one and all in UK: Outdoor Sports education Outdoor pursuits Area, club and duty management in a range of venues, including casinos and bingo halls; Online games Adventure tourism Managers of sport and leisure organizations are faced with rising customer expectations of their services. As a result of increasing competition, a greater awareness of consumer rights and improvements in service quality, customer expectations of sport and leisure services are in danger of spiraling out of control. Indeed, the ability to manage customer expectations to ensure that they remain appropriate and realistic is a skill that has become increasingly essential for those who manage the industry. Reference Changing social trends will require more effective and efficient management. The population is getting progressively older, couples are having children later, society is becoming more litigious, there is a trend towards sports, home-based leisure is becoming increasingly important and society is becoming globalised. This will have implications for programming, marketing, image and competitive edge. These changes will all require better management (Mintel, 2009). The concept of customer loyalty in leisure sports industry of UK has been not studied properly. The principles of marginality have not been put to use in trying to understand if there exists customer loyalty in this space based on the number of hours spent in the sports leisure activities, types of activities and other such parameters. And also at this point of time it is unknown if there exists some differences between consumers preferences based on their social class segmentation such as income wise, education wise or occupational status wise etc. Reference OVERALL PURPOSE RESEARCH QUESTIONS Based upon the problem discussion the core purpose of the research is to provide an insight on the customer loyalty in sports leisure industry of UK based on parameters such as social class segmentation, consumer leisure behavior towards such options, types of leisure trips selected and to measure or explain these differences through marginality principles. The following are the key Research Questions that will be addressed in the research work: Q1. Are there any significant differences in the leisure behavior of UK population? Q2. Can such differences be measured using Marginality Principles? Q3. What would be the key recommendations for boosting Customer Loyalty in sports leisure industry of UK? LITERATURE REVIEW In this chapter the research work and related entities are discussed at length viz. pertaining to sports leisure industry as a whole, the social classes in UK and other relevant factors which affect a consumers behavior towards the offered services. A conceptual framework for the research would also be presented in this chapter. ELEMENTS IN SPORTS LEISURE With high levels of investment planned by government and employers, mainly in response to the successful London Olympics bid for 2012, there are more graduate career opportunities in the sport and leisure industry than ever before.  The introduction of the Smoking Ban Law in 2006-2007 has had a big impact on the casino and bingo industry.   While many bingo clubs have suffered from falling revenue, there has been a big increase in the number of players visiting online bingo sites and as a result many new job opportunities now exist in the online gaming industry (Mintel report, 2009).  Ãƒâ€šÃ‚   Types of Leisure Sports There is a growing awareness and understanding of health and fitness activities in the UK. More people than ever are actively taking part in sport and leisure as a hobby and this is also fuelling a growth in the number of available jobs. The major types of sports leisure areas include Health and fitness, Club and duty management, Sales and marketing, Instructing and coaching, Consultancy work based on Group Policy referrals usually with particular sections of the population, e.g. those with diabetes, arthritis, Lifestyle consultancy and nutrition opportunities are increasing as the sector embraces the concept of wellness, Sport development performance, administration and facility management (Lucie Johnston, Sports Leisure January 2010). For those who are employed in sports leisure industry the working hours can be long.   Employees are often required to work shift patterns and weekends. Typical salaries after training range from  £20,000 to  £35,000 (Graduate Recruitm ent Bureau, 2009). Manpower Overview Just over half of the sport and recreation workforce in England is female. It has a higher proportion of young people (16-24) than the workforce across England as a whole (SkillsActive Workforce and Skills Summary 2009). 95% of employees are currently from white ethnic groups, compared to 91% in the whole economy (SkillsActive Workforce and Skills Summary 2009). The sport and recreation industry as a whole employs around 621,000 people. This is spread across the public, private and voluntary sectors. (SkillsActive, 2009) There are a huge number of volunteers working in sport and recreation.   The latest Active People survey estimates that two million people in the UK commit at least one hour a week to volunteering in sport. There are currently just over 140 casinos, employing 14,000 people in the UK. There are 17,000 employees in the bingo club industry and 57,000 in the betting industry. The Gambling Act 2005 permitted online casinos to operate from the UK and consequently there are now over 320 online operators of betting and gambling sites employing almost 8,000 people. (The Gambling Commission Annual Report 2008/2009). There are 3,000 private health clubs and over 2,500 leisure centers in the UK, which together employ over 45,000 staff.   An additional 800 clubs are expected to open over the next few years in this growth in dustry (Skills Active, 2009). CUSTOMER SEGMENTATION In order to define distinct target groups, customers are typically segmented along demographic, psychographic, and/or behavioral dimensions (cf. Peter Olson, 2008, pp. 370; Solomon et al., 2006, p. 9). The sports leisure seekers market is segmented as follows: The upper class in Britain is statistically very small and consists of the peerage, gentry, and landowners. These people were traditionally the wealthiest in the land having inherited money and position. Typically they would speak with Received Pronunciation accent and have been educated at schools. Reference The upper middle class in Britain typically consists of professionals with tertiary education, speaking Received Pronunciation. The higher upper middle class are traditionally educated at more prestigious Public Schools. The lower section of the upper middle class tends to occupy less prestigious public schools. Middle class in Britain typically consists of bourgeois with degrees from the less prestigious universities, or possibly no tertiary education. They would speak in accents which are provincial as well as Estuary English . They would be engaged in owning and running local businesses; working for larger corporations as junior and middle management; teaching, social work an d engineering, accountancy, information technology, nursing and other skilled jobs. Reference Nouveau riche, are people from poorer backgrounds who have made money themselves, primarily in business, middle-class professions, or entertainment. They may retain the mannerisms of their original social group or may imitate the behavior of the traditional upper class by, for instance, sending their children to public school or taking elocution lessons, but often in a way that is seen as gauche by the real upper class and middle classes (satirized as Mr Nouveau Richards by Jilly Cooper). This group is characterized by ostentatious displays of conspicuous consumption. Premier League Footballers are typical of this group. Spiralist Meritocracy as another group was identified by Jilly Cooper in her book Class as people from working class or lower middle class backgrounds who gained an education at grammar school and university and have subsequently obtained professional or managerial jobs wit hin companies or government (Wikipedia, Social Structure of United Kingdom). Mondeo Man group are of people employed in the private sector in a salesman or entry level management position that drives a company car such as a Ford Mondeo. These people would have had limited education and cultural aspirations but are keen to move up in the world .The lower middle class in Britain consists of people in white collar jobs living in less prosperous suburbs. They would typically not have had a university education, at least before the 1980s expansion in higher education. Reference These people would speak in local accents, although relatively mild. Skilled working class in UK represents people who would be in skilled blue collar jobs, traditionally in industry but in recent decades showing entrepreneurial development as the stereotypical white van man, or self employed contractors. Reference Unskilled working class in UK represents people who would work in blue collar jobs with low incomes. They would typically have left school as soon as legally permissible and not value education (Wikipedia, Social Structure of United Kingdom). As per Annual Survey of Hours and Earnings (ASHE), 2007 the socio economic graph as per these roles with the median salary clearly depicts the relationship between occupational and age as variables against the income levels (refer Appendix I). CONSUMER LOYALTY Defining Consumer Loyalty As the comparison of the different definitions of customer loyalty illustrates, two key dimensions exist: a behavioral (cf. Cunningham, 1956) and an attitudinal (cf. Day, 1969) dimension. Both are described below in more detail and an equal consideration of both dimensions is advocated, if true loyalty is to be achieved. Behavioral loyalty refers to the consumers actual behavior of repurchasing specific bran within a given category over time (e.g., Day, 1969; Chaudhuri Holbrook, 2002). Kumar and Shah (2004, p. 318) describe behavioral loyalty as loyalty of a consumer as observed from the customers purchase behavior. This explicitly means that the consumer repeatedly chooses the same brand when he needs a specific product or service. This behavior may be a result of a true preference for the brand. However, repeat purchases of the same brand may also be attributable to mere convenience, habit, or because the barriers to change (i.e. the switching barriers) are too high. While proponents of the one dimensional construct of consumer loyalty argue that attitude is irrelevant in determining loyalty toward a brand and consider the debate on the notion of true loyalty a waste of time (Sharp et al., 2002) opponents claim that behavioral definitions of consumer loyalty are inadequate for explaining how and w hy customers are loyal to a specific brand, and call for an analysis of the individuals dispositional basis for repeated purchase (Dick Basu, 1994, p. 100). Zins (2001, p. 270) further criticizes that the observation of behavioral loyalty alone does not leave room to draw any substantiated conclusions about customers future actions. Only measuring behavioral loyalty actually overestimates the share of true loyalty, since it does not account for those customers who buy a brand simply because no other alternative is available or because a particular brand is offering a special promotion (Day, 1969). Prior research has demonstrated a direct relationship between reasons for liking a particular sport team and loyalty. The current study replicates and extends this line of inquiry by examining the mediating role of attachment, a process by which an individual moves from merely liking a team (attraction) to becoming loyal to a team (allegiance). Data (Collegiate N = 194; Collegiate and Professional N = 402, Favorite Sport Team N = 808) were collected to examine 13 benefits and attributes associated with liking a sport team, 3 attitude formation properties, and allegiance. A three stage test of mediation using MLR revealed that attachment mediated the relationship between allegiance and Vicarious Achievement, Nostalgia, Star Player, Escape, Success, and Peer Group Acceptance. The results indicated that allegiance is the outcome of a developmental process by which an individual places greater symbolic value on, has stronger emotional reactions, and has more functional knowledge in relat ion to attractive benefits and attributes associated with a sport team (Frank Daniel C., 2006 Loyalty, Attachment, Sport Consumers, Attitude Development, Participation). Low attitudinal loyalty combined with low behavioral loyalty indicates an absence of loyalty (cf. Dick Basu, 1994, p. 101). Day (1969, p. 30) categorizes those customers as spuriously loyal who exhibit high repeat purchase behavior, but lack any attachment to the brand and can easily be captured by another brand offering a better deal. Latent loyalty, in contrast, is reflected by high attitudinal loyalty combined with low repeat purchase. True loyalty, firms preferred condition, can be conceptualized as an attitudeà ¢Ã¢â€š ¬Ã‚ based behavioral loyalty toward the given brand (see Kim et al., 2008, pp. 99à ¢Ã¢â€š ¬Ã‚ 100). A direct relationship between customer loyalty and relationship marketing has been proposed by a number of authors. Webster (1994, p. 26) claims that Customer loyalty has meaning only within the context of relationship marketing. Similarly, Aaker (2002, p. 23) proposes that one approach for enhancing consumer loyalty is the development or strengthening of customers relationship with the brand, which constitutes the basic objective of relationship marketing. Relationship marketing thus serves as a concept that contributes to the understanding of the factors that drive customer loyalty. The conceptualization of the loyalty construct has evolved over the years. In todays changing global environment, every organization is searching for innovative ways to achieve competitive advantage, increase customer loyalty, and improve efficiency without sacrificing quality of service (Javalgi Moberg, 1997). Service loyalty, with its final effect on repurchasing by customers, is perhaps one of the most important constructs in service marketing. Indeed, loyal customers that indulge in repeat purchases are the base of any business (Caruana, 2002). Some have tagged customer loyalty as a key source of competitive advantage (Bharadwaj et al., 1993) and a key to firm survival and growth (Reichheld, 1996). However, how loyalty has been conceptualized and measured has varied considerably across studies, resulting in calls for more research into the fundamental meaning of loyalty (Oliver, 1999). Three conceptual viewpoints have been suggested to define customer loyalty: the behavioral perspective, the attitudinal perspective and the composite perspective (Bowen Chen, 2001; Zins, 2001). The behavioral perspective, purchase loyalty, strictly looks at repeat purchase behavior and is based on the customers purchase history. Here, the emphasis is on past -rather than on future actions. Moreover, no other loyal behavioral actions such as price tolerance, word of mouth, or complaint behavior can be interpreted. Concentrating on the behavioral aspect of loyalty could overestimate true loyalty. The attitudinal perspective, in contrast, allows gain in additional understanding of loyal behavior (Zins, 2001). Here, customer loyalty is approached as an attitudinal construct. Attitude denotes the degree to which a consumers tendency towards a service is favorably inclined. This inclination is reflected by activities such as the customers recommending service providers to other consumers or their commitment to repatronize a preferred service provider (Gremler Brown, 1996). Based on a favorable attitude towards a service provider, customers may improve preference loyalty (De Ruyter et al., 1998). Lastly, the composite perspective combines attitudinal and behavioral definitions of loyalty. The composite perspective might be considered as an alternative to affective loyalty since using both attitude and behavior in a loyalty definition disputably increases the predicting power of loyalty (Pritchard Howard, 1997). In the present study loyal are defined those customers who hold favorable attitudes toward an organization, recommend the organization to other consumers and exhibit repurchase behavior Consumer Loyalty in Sports Consumer loyalty is of great value to recreational sport agencies in terms of their effectiveness and success. In recent decades, students in the field of recreation and leisure have paid growing attention to the phenomenon of customer loyalty. This paper reviews how exploration of consumer loyalty began, especially in the field of recreation and leisure. There have been three stages of evolution: the one-dimensional approach, two-dimensional approach, and multidimensional approach. The latter two developed out of critiques of an established approach. The authors find the multidimensional approach to be the most comprehensive, and thus the most promising, perspective for future research on consumer loyalty in the field of recreation and leisure (Tian-Shiang Kuo Evolution of Scholars Approach to Studying Consumer Loyalty in Recreational Sport and Fitness Business). Because it is much cheaper to serve loyal customers and easier to maintain their support, customer loyalty is of great value to organizations (Seybold, 2001). Rosenberg and Czepiel, whom Park and Kim cite (2000), claim that attracting a new customer costs 6 times more than retaining an existing customer. To a great extent, the success of a recreational sport and fitness business depends on how the business manages customers loyalty (Backman Crompton, 1991a, 1991b). As Park and Kim note, consumer loyalty is embodied not only in economic transactions with a business but more broadly in general support for the organization (Park Kim, 2000). Glimpsing the importance of consumer loyalty to sport-related businesses, in recent decades scholars in the field of recreation and leisure have paid growing attention to the phenomenon of customer loyalty (Gahwiler Havitz, 1995; Howard, Edginton, Selin, 1988; Park Kim, 2000). What has been the result of this increased focus? For one thing, a gradual evolution in how researchers approach the phenomenon of customer loyalty has resulted. Three stages can be roughly identified. In the very beginning, most investigators focused on only one dimension of consumer loyalty, either the behavioral or attitudinal dimension. Next, as a result of criticism of this initial research model, models that approached both behavioral and attitudinal dimensions of customer loyalty were developed. Finally, the latest studies of customer loyalty incorporate multiple attitudinal or psychological facets. This has led to a deeper, better-integrated understanding of loyalty. The following describes in more d etail each evolutionary stage of the historical development of customer loyalty research. Behavioral Approaches The majority of early studies of consumer loyalty looked only at its behavioral dimension. A customer was viewed as loyal to a product or service if he or she demonstrated consistent purchase of one brand over time (Backman Crompton, 1991b). According to Prichard and colleagues, one-dimensional behavioral approaches were classified in four groups by Jacoby and Chestnut (Prichard, Howard, Havitz, 1992, pp.156-157). The first group comprises researchers who located loyalty in the customers purchasing sequence, for example George N. Brown. The second group comprises researchers such as Ross M. Cunningham who defined loyalty on the basis of the proportion of the customers purchases that featured the brand in question. Jacoby and Chestnuts third group includes the scholars who applied probability models to analyze consumers purchasing behavior. To this group belongs Ronald E. Frank, who in the early 1960s investigated repeat-purchase probabilities using a simple chance model. The fourth and last of Jacoby and Chestnuts group integrated several behavioral variables for generating definition of customer loyalty (Prichard et al., 1992). Burford, Enis, and Paul (1971), as an example, put forward an index combining three behavioral measures of customer loyalty: proportion of resources spent on brand or store, amount allocated to switching, and the number of alternative brands or stores. While operationalizing such behavioral approaches is easy enough, at the same time they may exhibit fatal weaknesses as theoretical frameworks upon which to hang studies of consumer loyalty. Beginning in the late 1960s, some consumer loyalty researchers began to criticize behavioral approaches to their task (Howard et al., 1988, p. 42). They pointed out, for example, that because the associated measures relied on overt, observable behaviors, behavioral conceptualizations of consumer loyalty were doomed to such error as the classification of particular consumers as loyal in one study and non-loyal in the next (Backman Crompton, 1991b, p. 206). Moreover, failure to identify relations between loyalties measured by different patterns of use brought many researchers to the conclusion that brand loyalty encompassed more than repeat use (Backman Crompton, 1991b, p. 206). Attitudinal Approaches Conceptually, behavioral models could not, Day noted (1969), discriminate between true or intentional loyalty and spurious loyalty (Backman Crompton, 1991b; Prichard et al., 1992). Day (1969) and Jacoby (1971) proposed an attitudinal conceptualization of customer loyalty in order to better understand it. According to Jacoby (as cited in Prichard et al., 1992), a customer who shows brand loyalty by implication repeat[s] purchase based on cognitive, affective, evaluative and predispositional factors: the classical primary components of an attitude (1971, p. 26). Prichard et al. (1992) also briefly review those early researchers who looked at psychological aspects of consumer loyalty as well as behavioral. Guest, Monroe, and Guiltinan; Bennett and Kassarijia; and Jain, Pinson, and Malhotra all made an effort to study consumers attitudes or intentions. Just like approaches focused one-dimensionally on consumer behavior, however, approaches focused one-dimensionally on attitudinal loyalty had limitations. According to Prichard et al., the early studies of the attitudinal components in consumer loyalty, when they were reviewed by loyalty theorists, were often found to lack adequate theoretical conceptualization. A result of this was a multitude of measures that confounded research. Examination of the theoretical and empirical rigor underlying the development of various attitudinal measures raised certain questions about construct validity (Prichard et al., 1992). Overall, then, early definitions of customer loyalty as solely a behavioral construct or solely an attitudinal construct could be accused not only of superficiality but also of insufficiency. In time, a two-dimensional approach would replace these flawed perspectives. Reference Consumer Loyalty in Leisure Leisure activities could be said to be more important than ever before. International comparisons show that the British work long hours, and lengthy commuting times only add to the burden. It is increasingly likely that both partners in a household work full time, and household duties such as food shopping and cleaning must be shared, placing a premium on the time available for more enjoyable activities. Reference There is also the increasing problem of sedentary occupations, with many people spending their working day sitting in front of a computer terminal or talking on the telephone. This produces a demand for active leisure or recreation, but developments in technology mean that there is also an increasing temptation to sit in front of the television or to spend hours on the Internet or playing video games (Research Markets UK Leisure and Recreation Market Review 2002). The Most Popular Leisure Activities The survey, which was carried out on a nationally representative sample of 1,012 adults in August 2002, simply asked people about the leisure activities they considered `enjoyable, either in the evening or at the weekend. Unsurprisingly, the leisure market is dominated by in-home activities, with 92% of people content to spend their evenings or weekends watching television (or, with some more initiative, watching bought or hired videos). Listening to music or the radio at home is another popular choice (80%). Even when they wish to socialize, most people now think first of entertaining friends or family at home (79%), rather than going out. Venues providing entertainment and cultural services have to work harder than ever to persuade people out of their comfortable homes. Most consumers (77%) are content to go out for a meal as their main leisure experience outside the home (Research Ma

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