Corporate brand image, satisfaction and store loyalty

Abstract

Purpose To study the impact of the corporate store image on customer satisfaction and store loyalty in grocery retailing. Corporate (store) image is defined as the combined effect of how the retailer as a brand, manufacturer brands, and store brands are perceived. The reason for including store brands and manufacturer brands in this definition is that the image and equity of retailer brands depends on the product brands they carry and the equity of those product brands. Design/methodology/approach A mail survey to consumers, 1,000 usable answers. The test of the proposed model was based on a simple path model that related the latent variables to the dependent manifest variable store loyalty. Findings Most important for customer satisfaction is the store as a brand. Retailers must be good at retailing. Customers are satisfied when the store is neat and pleasant and when they feel that the store understands their needs. Only certain customer segments are interested in store brands. Satisfied customers are loyal. Research limitations/implications A limitation is the way store loyalty was measured, i.e. as an estimate of how much the respondent's household spent in the main store. Another limitation is the fact that the study is based on “manufacturer brands” and “store brands,” rather than specifically mentioned real brands. Practical implications The growth rate for store brands in grocery retailing is twice as high as for manufacturer brands. Wisely launched, store brands may be profitable to retailers. However, although gross margins are much higher for store brands than for manufacturer brands, net margins are equal. It is therefore important to find out how important store brands are in a customer perspective. After all, retailers prosper when they have satisfied and loyal customers. Originality/value The paper is based on a more holistic definition of corporate store image than prior studies, which should give a more accurate picture of the relative importance of the store as a brand, and manufacturer as well as store brands.