Journal of Management and Marketing Research

A mediating influence on customer loyalty:

The role of perceived value
Mei-Lien Li
Lynn University

Robert D. Green
Lynn University

ABSTRACT

Loyal customers provide firms a consistent source of revenue (repeat and increased
purchases) and for cost reduction (less promotional expenses) that leads to increased profits.
Customer loyalty is the result of successful marketing strategy in competitive markets that
creates value for consumers. This study examines the mediating role of consumer perceived
value in the marketing strategy-customer loyalty relationship. A theoretical framework is
established that is supported by empirical evidence. Based on the literature, the findings indicate
an inconsistent measure for perceived value that does not fully explain its mediating role. The
conclusion is to be valid perceived value should be measured by specific non-monetary scale
items.

Keywords: Customer loyalty, perceived value, marketing strategy

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INTRODUCTION

Customer loyalty plays an important, if not a critical role in an organizations success.

Loyal customers provide firms a consistent source of revenue (repeat and increased purchases)
and for cost reduction (less promotional expenses), thus increasing profitability. Reichheld and
Sasser (1990) find that loyal customers are willing to (1) re-buy products despite the fact that
there are attractive competitive alternatives to cause switching, (2) spend money on trying
products across the firms product line offerings, (3) recommend the firms goods or services to
other consumers, and (4) give the company sincere suggestions (feedback) as to their needs and
expectations. The result of a successful customer loyalty strategy leads to customer retention.
Depending on the industry, an improvement of 5 percent in customer retention leads to an
increase of 25 percent to 85 percent in profits (Kerin, Hartley, & Rudelius, 2009; Reichheld &
Sasser, 1990). Furthermore, firms spend more than five times as much to obtain a new customer
than to retaining an existing one (Kotler & Keller, 2006; Wills, 2009).
In the marketplace, some businesses have been first movers and developed successful
loyalty programs that initially gave them competitive advantages. However, they have become
common in certain industries, e.g., airlines, hotels, in which such advantages have been lessened,
or even lost. A recent airline market research study found wide disparity for available frequent
flyer award seats 99 percent for Southwest to 11 percent for US Airways (Perkins, 2010).
Hence, the value of participating in one loyalty program, e.g., Southwest, is greater than another,
e.g., US Airways, to maintain an advantage in a highly competitive industry. In the hospitality
industry, hotels can increase the required points for a free room that deceases the value of a
loyalty program, as Hilton has recently done (Elliott, 2010). As a result, Hilton now has a less
competitive advantage for its customer loyalty program.
Harley-Davidson has developed a highly successful loyalty program that has lead to a
unique culture Harley Owners Group (HOG). However, General Motors (GM) Saturn car was
established with similar cult-like following objectives as a no- haggle price, focus on customer
service and outreach with driver reunions and email newsletters (that) sparked strong brand
loyalty (Hemlock, 2009, p. 1D). GM made a decision to discontinue the brand due to lack of
market share. The company has been unable to retain most Saturn owners to purchase another
GM brand. Former Saturn owners have turned to the competitors, e.g., Toyota, Ford (Hemlock,
2009) as an indication of a weak loyalty program. In the electronics retail market, as major
competition from Wal-Mart and Amazon increases, market leader Best Buy has targeted a
segment and is developing a loyalty program to retain and attract female shoppers (Bustillo &
Lloyd, 2009). The firm has about 22 percent of the consumer electronics market but only 16
percent of the sales are to women and just 31 percent of the employees are females. Much of
Best Buys current loyalty strategy centers on female shoppers needs, e.g., family and work
demands. One such initiative is that local female groups create a consumer-loyalty plan that
(allows) women (in a local area) to donate loyalty points to schools (Bustillo & Lloyd, 2009, p.
B5).
Customer loyalty is the result of successful marketing strategy that creates competitive
value for consumers, as Southwest Airlines and Harley-Davidson have been able to achieve.
Research (Bloemer & Odekerken-Schrder, 2002; Reichheld & Sasser, 1990; Zeithaml, 1988) as
well as marketplace experiences (Elliott, 2010; Perkins, 2010) have shown mixed or unique
results as to what determine successful customer loyalty strategies. Therefore, the primary
purpose of this research is to advance the understanding of customer loyalty by examining the

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literature and determining consumer perception of marketing strategy and customer value.
Hence, what is the perceived value mediating influence resulting from marketing strategy on
customer loyalty? This study presents a review of the literature, the theoretical framework with
an analysis of the empirical literature to support this framework, and then a discussion and
conclusion of the findings.

LITERATURE REVIEW

While customer loyalty is challenging to achieve for marketers and to explain by

researchers, it nevertheless continues to be a great importance and interest. In this study, the
focus is on customer loyalty, and the antecedents of perceived value, and the marketing mix that
creates the value. This relationship is supported in the theoretical literature (McCarthy, 1971;
Oliver, 1997; Zeithaml, 1988), and has been tested in various empirical studies (Bloemer &
Odekerken-Schrder, 2002; Cronin, Brady, & Hult, 2000; Yoo, Donthu, & Lee, 2000). However,
studies have not been inclusive of all variables that better describes and explains the marketing
strategy, perceived value, and customer loyalty relationship, as determined by, and proposed in
this study.

Theoretical Framework

Marketing exists because of unfulfilled needs and desires of people (Kotler, 2005). Thus,
the objective of marketing strategy is to deliver value to customers as well as build a long-term
and mutually profitability relationship with customers (Dick & Basu, 1994; Kanagal, 2009; Rust,
Lemon, & Zeithaml, 2001). Marketing strategies that are successful require market analysis, e.g.,
competitors, consumers, and internal analysis, e.g., marketing mix, which leads to a competitive
advantage, e.g., relationship building, loyalty programs (Kanagal, 2009). As such, the marketing
mix is defined as the mix of controllable marketing variables that the firm uses to pursue the
desired level of sales in the target market (Churchill & Peter, 1995, p. 16).
Developing a marketing mix requires two strategic steps. One is the selection of the
target market. The second is the development of a marketing mix (the 4 Ps) strategy to fulfill the
needs and wants of target customers in which the 4Ps (product, price, place, promotion) are
integrated, interrelated and equally important (McCarthy, 1971). First of the marketing mix
elements, products are either tangible (goods) or intangible (services) that includes services
quality, service facilities, branding, packaging, standardization and grading (McCarthy, 1971).
Second, price is defined as any transaction in our modern economy can be thought of as an
exchange of money the money being the price for something (McCarthy, 1971, p. 596).
Third, place matches supply capabilities to the demands of the many target markets, moving
goods wherever they are needed . (and refers to) all the factors that go into providing the time,
and place, and possession utilities needed to satisfy target customers (McCarthy, 1971, p. 371).
Fourth, promotion is communication between seller and buyer (McCarthy, 1971, p. 513) which
includes advertising, personal selling, sales promotion, public relations, direct marketing, and
various other forms of consumer communications (Kerin, et al., 2009).
Specific to marketing, strategies are based on segmenting, targeting, and positioning
(Kotler & Keller, 2006). For decades, segmentation has been a marketing tool. Marketing
activities require precise utilization of both product differentiation and market segmentation as
components of marketing strategy (Smith, 1956, p. 7) in which the segment must be large

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enough to be profitable. Targeting is merely the selection of specific segment(s), e.g., gender
and/or age in a demographic segment. Moreover, firms must decide on a value proposition on
how it will create differentiated value for targeted segments and what position it wants to occupy
in those segments (Kotler & Armstrong, 2008, p. 203). Loyalty strategies, therefore, are created
by having the suitable marketing mix product, price, place, promotions (McCarthy, 1971)
and a value proposition (Kotler & Armstrong, 2008) to support (connected with) the target
segments and to have the appropriate positioning in the minds of the targeted consumers in
comparison to competitors (Kotler & Armstrong, 2008).
Customer perceived value is defined as the consumers overall assessment of the utility
of a product based on perceptions of what is received and what is given (Zeithaml, 1988, p. 14).
Two essential conceptions are established with customer perceived value (CPV). First, CPV is a
result from the consumers pre-purchase perception (expectation), evaluation during the
transaction (expectation versus received), and post-purchase (after-use) assessment (expectation
versus received). Second, CPV involves a divergence between the benefits received and
sacrifices given. The benefits include customers desired value, e.g., quality (Monroe, 1990).
Sacrifices, on the other hand, include monetary (price) and non-monetary (time, effort)
considerations (Cronin, et al., 2000; Dodds, Monroe, & Grewal, 1991; Monroe, 1990). Monroe
observes, Buyers perceptions of value represent a tradeoff between the quality or benefits they
perceive in the product relative to the sacrifice they perceived by paying the price (1990, p. 46).
Furthermore, non-monetary sacrifice includes customers time and effort in acquiring products
(Cronin et al., 2000). Therefore, to maximize customers perceived value, a firm must either
increase the customers perceived value, e.g., quality, and/or decrease their sacrifice, e.g., price
paid, time and effort to purchase.
Customer loyalty is defined as a deeply held commitment to rebuy or repatronize a
preferred product or service consistently in the future, despite situational influences and
marketing efforts having the potential to cause switching behavior (Oliver, 1997, p. 392).
Olivers (1997) perspective proposes that loyal customers go through four stages. First is a
cognitive sense (belief). For example, sales promotion or high quality products of a firm for first-
time purchase consideration attracts a customer. To be loyal, the customer must consistently
confirm that his or her expectations about the goods or services are met. Second is the affective
sense (favored attitude) in which consumers are repeatedly satisfied from purchasing decisions.
Third is the conative stage that consumers have a behavioral intention committed deeply to
buy. The intention leads to the fourth stage of action. Customers have the desire to overcome
obstacles, e.g., attraction of competitors or price increase by a firm, to achieve the actual
purchase behavior (Oliver, 1997).
With loyal customers, companies can maximize their profits. Loyal customers are willing
to (1) purchase more frequently (price insensitivity), (2) try the firms new products or services
(repurchase intention), (3) recommend products and services to others (word-of-mouth), and (4)
give companies suggestions (complaint behavior) (Reichheld & Sasser, 1990). Furthermore,
Zeithaml, Berry, and Parasuraman (1996) propose a comprehensive multi-dimensional
framework to measure customer loyalty. In their research, loyal consumers have (1) high
purchase intention (repurchase intention), (2) less price sensitivity (price insensitivity), (3)
feedback to the firm (word-of-mouth, complaint behavior), and (4) do more business (frequent
purchase and no switching behavior).

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Product
Price
Marketing Mix
Place
Promotion

Customer Perceived Quality

Perceived Value Cost
Sacrifice Time
Effort

Word-of-Mouth
Customer Price Insensitivity
Loyalty Repurchase Intention
Complaint Behavior

Figure 1 Conceptual Model

For this study, a conceptual model is presented in Figure 1. The marketing mix includes
product, price, place, and promotion. Customer perceived value is shown as perceived value and
sacrifice (cost, time, and effort). Customer loyalty includes word-of-mouth, price insensitivity,
repurchase intention, and complaint behavior.

Empirical Evidence

With loyal customers, companies can maximize their profit by which these customers are
willing to (1) purchase more frequently, (2) spend money on trying new products or services, (3)
recommend products and services to others, and (4) give companies sincere suggestions
(Reichheld & Sasser, 1990). Thus, loyalty is linked to the success and profitability of a firm
(Eakuru & Mat, 2008). Customer loyalty has been measured by (1) cognitive components
(Huddleston, Whipple, Mattick, & Lee, 2009), (2) affective elements (Chowdhury, Reardon, &
Srivastava, 1998), (3) trust and commitment (Haelsig, Swoboda, Morschett, & Schramm-Klein,
2007), (4) purchase intention (Bloemer & Odekerken-Schrder, 2002; Cronin et al., 2000), (5)
positive word-of-mouth communication (Bloemer & Odekerken-Schrder, 2002; Cronin et al.,
2000; Eakuru & Mat, 2008), (6) complaining behavior (Bloemer & Odekerken-Schrder, 2002;
Ibrahim & Najjar, 2008; Zeithaml et al., 1996), (7) price insensitivity (Bloemer & Odekerken-
Schrder, 2002; Ibrahim & Najjar, 2008), (8) switching behavior (Eakuru & Mat, 2008; Ibrahim
& Najjar, 2008), (9) first choice (Lee & Overby, 2004; Zeithaml et al., 1996), and (10) do more
business (Zeithaml et al., 1996).

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Of particular interest to this study (Figure 1), word-of-mouth communication as measured

by recommending a company or product (good or service), encouragement to do business, and
saying positive comments to others are frequent considerations of customer loyalty. Another
frequent component is repurchase intention as measured by continuing to doing business, repeat
purchases, and purchase frequently. Third, price insensitivity is measured by the willingness to
pay a higher price, continue to purchase with a price increase, and continue the relationship even
if alternatives are less expensive. Finally, complaint behavior is measured by voice responses (to
sellers), private responses (to others), and third party responses (legal action) (Bloemer &
Odekerken-Schrder, 2002; Ibrahim & Najjar, 2008; Zeithaml et al., 1996).
Therefore, most studies measure customer loyalty outcomes by behavioral loyalty
dimensions such as word-of-mouth communication, purchase intentions, price insensitivity, and
complaint behavior (Bloemer, de Ruyter, & Wetzels, 1999; Bloemer & Odekerken-Schrder,
2002; Ibrahim & Najjar, 2008; Zeithaml et al., 1996). This occurs since the attitudinal
components, such as perceived value, are viewed as the antecedents of customer loyalty (Donio,
Massari, & Passiante, 2006; Hennig-Thurau, Gwinner, & Gremler, 2002; Ibrahim & Najjar,
2008). This supports the findings of Dick and Basu (1994) that viewing loyalty as an attitude-
behavior relationship allows integrated investigation of antecedents of customer loyalty. Such
antecedents of customer loyalty include customer perceived value and marketing mix (Bloemer
& Odekerken-Schrder, 2002; Cronin et al., 2000; Yoo, et al., 2000).
A major objective for delivering value to customers is to develop loyal customers who
can increase purchase frequency, purchase quantity, and avoid switching behavior (Rust, Lemon,
& Zeithaml, 2004). Thus, delivering customer value is a primary method to build a firms
competitive advantage (Kanagal, 2009; Lee & Overby, 2004). Moreover, customer perceived
value is the result of marketing strategy (Moliner, Sanchez, Rodriguez, & Callarisa, 2007;
Sangkaworn & Mujtaba, 2010). That is, a firms marketing strategy should be developed based
on value creation for customers (Bilington & Nie, 2009). Yoo et al.s (2000) study confirms that
marketing strategy positively influences customer perceived value (perceived quality), and leads
to customers (brand) equity.
Perceived value is critical to the success of buyer-seller relationships (Lemon, Rust, &
Zeithaml, 2001), e.g., customer loyalty, and consists of the consumers overall assessment of
the utility of a product based on perceptions of what is received and what is given (Zeithaml,
1988, p. 14), or the benefits received and the sacrifices made (given). Benefits include
customers desired value, e.g., quality (Monroe, 1990). Sacrifices, on the other hand, include
monetary (price) (Dodds, et al., 1991) and non-monetary (time, effort) (Cronin, et al., 2000)
considerations. Therefore, value includes three key factors: (1) quality, (2) price, and (3)
convenience (Lemon, et al., 2001), where convenience is the time and effort expended by the
customers (Cronin, et al., 2000).
In an empirical study, Dodds et al. (1991) tested the effects of price, brand and store
information with perceived value (quality and sacrifice) as a mediating influence on willingness
to purchase. Results show that while price had a positive influence on perceived quality, price
also had a negative effect on perceived value and willingness to buy. Furthermore, favorable
brand and store information did have a positive effect on perceived quality and willingness to
purchase. However, as with many perceived value studies, measurements focus on price. All
perceived value items were price (monetary sacrifices) related, and no indicators for non-
monetary sacrifices. These included (1) This product is a: (very good/very poor value for the
money), (2) At the price shown the product is: (very economical/very uneconomical), (3) The

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product is considered to be a very good buy: (strongly agree/strongly disagree), (4) The price
shown for the product is: (very acceptable/very unacceptable), and (5) The product appears to be
a bargain (strongly agree/strongly disagree) (Dodds et al., 1991, p. 318). Dodds et al. state that
as price increases beyond the acceptable range, the perceptions of value (will) decline (and)
thus, the relationship between price and perceived value should also be curvilinear (1991, p.
308).
Yoo et al. (2000) propose a framework to explore the relationships between the retail
marketing mix elements (price, store image, distribution intensity, advertising spending, price
deals) and total brand equity through the mediating role of three brand equity dimensions, that is,
(1) perceived quality, (2) brand loyalty, and (3) brand associations combined with brand
awareness. The results show that, first, no direct path between marketing mix variables and total
brand equity. Total brand equity is indirectly affected through the mediating brand equity
dimensions of perceived quality, brand loyalty, and brand associations combined with brand
awareness. Second, frequent price promotions, such as price deals, have a negative relationship
to brand equity. Third, lowing price decreases customer perceived quality. Consumers may
perceive that a lower price is made by reducing product quality to maintain profit margins.
Fourth, customer perceive high quality products as having a direct (positive) relationship from
high advertising spending, high price, good store image, and high intensive distribution.
Many researchers state that value is a tradeoff between benefit (quality) received and
sacrifice made (Cronin et al., 2000; Moliner et al., 2007). Besides receiving benefits of perceived
quality, monetary and non-monetary sacrifices are used to measure customer value. Cronin et al.
(2000) conduct a study to examine the effects of service quality, perceived value, and customer
satisfaction on consumer behavioral intention in service environments. The service value is
received primarily from perceptions of quality. That is, consumers view service quality of greater
importance than the sacrifices they made.
Value includes quality, price, and convenience (Lemon, et al., 2001), where convenience
is the time and effort expended by the customers (Cronin, et al., 2000). Therefore, the marketing
strategy (marketing mix elements) is (are) an antecedent(s) of value (Lemon, et al., 2001).
Perceived quality is viewed as the product quality. Price is monetary sacrifice. Convenience
(saved effort and time) relates to the effort to do business with the firm (time costs), e.g., easy
access (place/location), and search time, e.g., product information (promotion) (Lemon et al.,
2001). Hence, the marketing strategy is essential to increase perceived value, and builds
customer loyalty (Chowdhury et al., 1998; Haelsig et al., 2007; Yoo et al., 2000).
An empirical study by Cengiz and Yayla (2007) tests the relationship between marketing
mix, perceived value, perceived quality, customer satisfaction, and customer loyalty with word-
of-mouth. There are two revealing findings. First, marketing mix elements have an important
influence on customer loyalty. Particularly, price and promotion have significant effects
(indirect) on loyalty. Second, price, place, and perceived quality (product) have positive effects
on perceived value. However, there were limitations in the measurements for perceived value
and customer loyalty. As with similar measurements by Dodds et al. (1991), Cengiz and Yayla
used items that were only monetary sacrifices, e.g., good value for money, acceptable price, to be
a good buy (2007, p. 85), and no items for non-monetary sacrifices. Furthermore, word-of-mouth
was the dependent variable, and hence was not a component of the independent variable of
customer loyalty. Moreover, customer loyalty included items of only repurchase intention
measures re-subscription intention and new services subscription intention (Cengiz & Yayla,
2007, p. 85).

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Therefore, the literature supports marketing strategy and perceived value as antecedents
of customer loyalty (Cengiz & Yayla, 2007; Dodds et al., 1991), and perceived value has a
critical mediating role and a direct (positive) relationship with customer loyalty (Lemon et al.,
2001; Yoo et al., 2000). However, perceived value has not been sufficiently, and completely
measured in the empirical studies. This value is the perceptions of what is received and what is
given (Zeithaml, 1988, p. 14). Quality is received and coupled with monetary and non-monetary
sacrifices are given, such as quality, price, and convenience (Lemon et al., 2001). These
components do not have a linear relationship, but rather curvilinear (Dodds et al., 1991), e.g.,
quality and price (Lemon et al., 2001). As a result, we argue that these constructs should be
included (together) to measure and determine perceived value. This a priori categorization is
consistent with Zeithaml (1988) and Lemon et al. (2001). Hence, as shown in Figure 1, this study
posits that perceived value is the total measure of perceived quality and sacrifices (cost, time,
effort) by the customer and a critical mediating influence between marketing strategy and
customer loyalty.

DISCUSSION

In todays highly competitive markets, businesses are more challenged to increase, or

even maintain market share. With the globalization and continual technology innovations,
consumers have greater access and more purchase alternatives, and opportunities to be less store
and product loyal. As a result, customer perceived value becomes paramount to being
competitive in the marketplace. For marketers to concentrate or compete only on price is not
only detrimental to profits, but also shortsighted. Generally, price is the marketing mix element
that competitors can react to the easiest, or the quickest to change (Kotler & Keller, 2006), and
provides the least sustainable competitive advantage (Kanagal, 2009).
Furthermore, with the curvilinear price relationship (Dodds et al., 1991), quality
considerations become marginal at certain low and high price points (lower perceived value).
Dodds et al. state, people not only may refrain from purchasing a product when they consider
the price too high, but also may be suspicious of the quality of a product if its price is too much
below what they consider acceptable (1991, p. 308). Consumers may perceive that a lower price
occurs by reducing product quality to maintain profit margins (Yoo et al., 2000). Therefore,
contrary to efforts by marketers and researchers to focus solely on quality (benefits) and price
(monetary sacrifice) as perceived value, other sacrifice considerations are important, e.g.,
convenience (Lemon, et al., 2001) where convenience is the time and effort expended by the
customers (Cronin, et al., 2000). Hence, the mediating influence of perceived value on customer
loyalty can be increased with other marketing mix elements, e.g., product, place, promotion (Yoo
et al., 2000), rather than just the price-quality relationship (Cengiz & Yayla, 2007; Dodds et al.,
1991).
In formulating a marketing strategy, positioning plays a critical role. Positioning is the
firms differentiation of its offerings as perceived by consumers in comparison to competing
products (goods and services). The manipulation of the marketing mix elements to meet, or
exceed the value as compared to competitive offerings for a target market (consumer segment)
establishes not only a consumer (value) market position (Kotler & Keller, 2006), but also a
competitive advantage (Kanagal, 2009).

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The era of mass marketing has past in recent decades with a very different market
environment, e.g., globalization, technology, and has now moved to and focused on specific
needs and expectations of particular target markets (segments). As the worlds largest retailer,
Wal-Mart offers the value of Save money. Live better by not only having a low price from
volume purchasing and a highly efficient supply chain but also with non-monetary value, e.g.,
huge number of stock keeping units (SKUs), many product categories (place/intensive
distribution), and one stop shopping (product assortment). While Wal-Mart moved in and has
established a major position in the retail grocery market, it now has expanded to another product
category by being a major player in the consumer electronics market, e.g., televisions, computers
(Bustillo & Lloyd, 2009). Wal-Mart is not only offering value to the price-sensitive segments,
e.g., low- and middle-income consumers, but also many other segments, e.g., time-constrained
(busy) shoppers (working husbands/fathers, wives/mothers) with one stop shopping as a non-
monetary sacrifice value. To compete, Best Buy appears to have not made price a value
proposition. It has identified an under-served market females, working women, mothers, young
women (girls) in which their needs and opinions have been sought by market research and
female shoppers active participation in developing its marketing strategy, e.g., donating loyalty
points to local schools (promotion/public relations) (Bustillo & Lloyd, 2009).
Customers perceive high quality products as having a direct (positive) relationship from
non-monetary sacrifice value by a good store image (product, promotion), high intensive
distribution (place), and high advertising spending (promotion) (Yoo et al., 2000). To continue
the Wal-Mart and Best Buy comparison of using non-monetary sacrifice to increase value, Best
Buy focuses on customer service (helpful, knowledgeable sales representatives)
(promotion/personal selling), wide aisles (product/store image), and support services (Geek
Squad) (product/service) that is much different than Wal-Mart, e.g., self-service, narrow and
crowded aisles, no available store support services. Furthermore, other promotion strategies
could be implemented to increase value, e.g., increased print, electronic and digital use to inform
and persuade consumers (advertising), personalized emails (direct marketing), short-term
specials and discounts (sales promotions). However, frequent sales promotions, such as price
deals, and loyalty may have an inverse (negative) relationship (Yoo et al., 2000).
Figure 1 presents the conceptual model for this study. Based on this model, a theoretical
framework has been established, and has been supported in the empirical literature. The findings
indicate a need for a better measure for perceived value, a critical mediating construct of the
marketing strategy-customer loyalty relationship. Moreover, the empirical literature provides
measurements for the proposed model. First, the marketing mix items for consumer products
have been developed by Cengiz and Yayla (2007); see page 84. The marketing mix items for
retail stores have been developed by Yoo et al. (2000); see page 203. Second, customer
perceived value includes two measures perceived quality and sacrifice (monetary and non-
monetary). The perceived quality items have been developed by Yoo et al. (2000); see page 203.
The sacrifice (monetary and non-monetary) items have been developed by Cronin et al. (2000);
see page 212. Third, customer loyalty items have been developed by Bloemer & Odekerken-
Schrder (2002); see page 75.
However, this study has specific limitations. First, a model is developed conceptually,
and remains to be tested and confirmed empirically. Second, the study has focused on customer
loyalty and the antecedents in consumer markets and may not, or does not represent industrial
(business, business-to-business) markets. Third, perceived value is the only mediating influence
for the marketing strategy-customer loyalty relationship, and others, e.g., satisfaction (Bloemer

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& Odekerken-Schrder; 2002; Cengiz and Yayla, 2007), have not been considered. However,
this study provides several future research opportunity areas. First, of course while an empirical
study was beyond the scope (purpose) of this research, the model should be further examined
(tested). Second, using the conceptual model, price could be measured as objective versus
perceived (Dodds et al., 1991) to further explain its monetary role (and along with the proposed
non-monetary items) in measuring perceived value and the influence on customer loyalty. Third,
the model could be tested between (a) product categories, e.g., computers and household
appliances, or (b) types of retail stores, e.g., convenience and department stores (Kotler & Keller,
2006).

CONCLUSIONS

The purpose of this research was to advance the understanding of customer loyalty by
examining the literature and determining consumer perception of marketing strategy and the
mediating role of customer value. Therefore the study was to answer the question, what is the
perceived value mediating influence resulting from marketing strategy on customer loyalty?
Customer perceived value is critical to driving market share and increase customer loyalty
(Lemon et al., 2001; Zeithaml, 1988). This perception is created by the firms marketing strategy
by having the appropriate marketing mix for the right position in the intended target market
(segment). While Best Buy, as an example, has targeted the rather broad female segment, it must
know that donating loyalty points to local schools will have a different perceived value for a
mother than a single female with no children. Value leads consumers to become a firms
customers, and with higher levels of value for customers to be loyal customers.
However, as argued in this study customer perceived value must be what is received and
what is given (Zeithaml, 1988, p. 14), and what is given is a monetary and non-monetary
sacrifice (Cronin et al., 2000; Lemon et al., 2001). Monetary is obviously the financial cost
(sacrifice) to the customer. Nevertheless, non-monetary factors are also a sacrifice, and must be
measured as a component of perceived value. To be valid, such non-monetary measure should
include scale items for convenience (Lemon et al., 2001) or time and effort (Cronin et al., 2000)
that would increase (or decrease) perceived value and for a customer to purchase a good or
service, just as the monetary sacrifice component does. Hence, for marketers and researchers the
question is, would a customer, e.g., mother, female without children, of a firm, e.g., Best Buy,
with certain incentives (perceived value), e.g., loyalty points to a local school, make the
sacrifices of cost, time, and effort to purchase its products? On the other hand, does a competitor,
e.g., Wal-Mart, offer less monetary and non-monetary sacrifices, e.g., everyday low prices and
one-stop shopping?

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design: An example in mass retailing. Perspectives for Managers, 177, 1-4.
Bloemer, J., de Ruyter, K., & Wetzels, M. (1999). Linking perceived service quality and service
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