Reminiscing of a childhood friend : study of customer loyalty towards Vero supermarkets in the city of Skopje

Abstract

Customer loyalty as a phenomenon has gained interest not only for the academia but for the majority of the companies, as a way to deal with competition. The aim of this dissertation was to provide insights in customer loyalty in the retail sector. Specifically for the Vero supermarkets in Skopje. The theoretical vehicle used in this thesis is that developed by Paavlova. Factors such as socialization routines, impulse.ethics, trust, and loyalty games were also examined in order to gain in-depth understanding of customer loyalty, what drives it and what is the application of it in a supermarket scene. To introduce the topic, the first part discussed the retail sector and customer loyalty in Macedonia, the historical and future trends as well as the place of Vero supermarkets in the market. Furthermore, development of the topic followed in the literature review where critical points of view in regards to customer loyalty were discussed, as well as various models for measuring it. Moreover, a theoretical model for customer loyalty designed by Paavlova was examined, upon which the research was based. Apart from observations, ten interviews were conducted on loyal customers of the Vero supermarkets, which were further on qualitatively analyzed. The main findings based on the analysis were that a loyal customer could not be categorized within one category of loyalty of Paavlova's model: one could rather fit within many categories, depending on the social, economical and other factors - thus a new category of loyalty should be made - a hybrid loyalty. It was concluded in the end that loyalty could not be bought: instead it is something that had to be earned. A supermarket in a metaphorical sense could be seen as a friend, and this could be applied in Vero's marketing strategy for obtaining customer loyalty. In the end, a table of analogies was made in order to illustrate the metaphor of Vero as a childhood friend to the customers.