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The IUP Journal of Management Research :
Drivers of Customer Satisfaction and Loyalty in Indian Retail Supermarkets: An Exploratory Study
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A number of research studies have been conducted in the field of retail services in different countries in order to measure customer satisfaction and loyalty, but all these studies mainly focus either on service quality or service features. Hardly any research exists that attempts to take into account both service quality and features and measure their impact on customer satisfaction as well as loyalty. The importance of such a study is immense in one of the fastest growing retail markets like India, where the impact of service quality and features on customer satisfaction and loyalty from the retail users' point of view is a very crucial field of discussion. After extracting different variables of service quality and features from studying a body of literature on services like retail, banking, fast foods, etc., done in the similar context of exploring drivers of customer satisfaction and loyalty, this study attempts to find out the underlying constructs (using factor analysis) of these service variables for the Indian retail supermarket customers. Then the variables (factors) extracted have been used as independent variables and an attempt has been made to explore the impact of these factors on customer satisfaction and loyalty as dependent variables, and also to explore the effect of satisfaction on loyalty.

 
 
 

According to Abubakar et al. (2001), satisfaction is basically a post-purchase evaluation by the consumers of their overall experience of the service. It is an affective reaction of the consumers when their desires and expectations have been either met or exceeded in the course of experiencing the service. In the context of a retail supermarket, satisfaction could be interpreted as just meeting the expectations of the customers, not any sort of exceeding or falling short of the expectations. Most of the retailers try to achieve competitive advantage by taking the responses of the customers beyond the level of `just satisfied' towards `exceeding their expectations'.

Service quality has been measured in previous researches (Parasuraman et al., 1988) by the gap between the consumer expectations of a service and their perceptions after they have used the service. Customer satisfaction is expected to be achieved when the value of customer service provided through a service experience is either meeting or exceeding consumer expectations. If the expectations are not met, the consumer will be dissatisfied. Another consequence can be that if the satisfaction scores are very low, the service provider might be susceptible to attacks by the competitors who are prepared to deliver superior value to the customers.

Customer satisfaction has become a crucial point of differentiation in a retail store, where consumers make weekly, fortnightly or monthly trips (to preferred supermarket) and then spend more on these trips than other times, especially in countries like India when competition in retailing is very fierce. Unfortunately in retail industry, most of the unsatisfied consumers do not complain, they just go shopping somewhere else. So the lesson for the retailers is that customer expectations always move upward and it is only the satisfied customers that are more likely to remain loyal in the long run.

 
 
 

Customer Satisfaction, Indian Retail Supermarkets, Service quality, Retail sector, Supermarket industry, Banking sector, Post-purchase evaluation, Foreign Direct Investments, FDI, Gross Domestic Product, GDP, Transnational Companies, TNC, Exploratory Factor Analysis, EFA.