The Impact of Price-Related Incidents on Store Loyalty

Abstract

Customer satisfaction and loyalty are in the focus of many retail companies. Customers, however, often focus on price (Zielke 2010). Accordingly, previous research has analyzed relations between price perception, overall satisfaction and loyalty (e. g. Varki and Colgate 2001; Voss et al. 1998). Other studies identified price-related incidents, which cause satisfaction or dissatisfaction with a retailer or a shopping situation (Bell et al. 1997; Hare et al. 2001; Kelley et al. 1993; Sundaram et al. 1998). Examples for negative incidents are price increases, situations where customers received low value for money, where prices were higher than expected, where the price was reduced after the purchase or where an individual item price did not coincide with the price charged at the cash register. Examples for positive incidents are unexpectedly low prices or substantially reduced prices through sales, discounts, and coupons.