Diego Contreras

Program Benefits, Satisfaction and Loyalty in Retail Loyalty Program: Exploring the Roles of Program Trust and Program Commitment
Nor Asiah Omar1, Che Aniza Che Wel2, Rosidah Musa3 and Muhamad Azrin Nazri4
Investigations to determine whether benefits that members derived from a loyalty program could influence their satisfaction, trust, commitment, loyalty with the program and ultimately storeloyalty are critical to elucidating the roles and significance of constructs and advancing management practice. With this in mind, our research aims to assess the effects of the loyalty program’s benefits offered by one of the leading superstores 1 in Malaysia on its members’ loyalty towards the program. We also attempt to explore the roles of program trust and program commitment in thehypothesized framework. The framework was developed and tested on 167 loyalty cardholders of a particular superstore. The study’s goal of developing a plausible framework to offer a richer insight of how program benefits could finally influence store loyalty was achieved. The results exemplify that program benefits are a strong driver of members’ satisfaction with the program and linkages of programbenefits—program loyalty—store loyalty were established. The mediating roles of program trust and commitment were significant in the model. However, no direct relationship from program satisfaction to program loyalty has been found. Our findings reveal important implications for future research and management practice.

Introduction
In response to the current era of intense competition and demandingcustomers, a new generation of Customer Relationship Management (CRM) tactics have been developed, which is the loyalty program

(Bhattacharya, 1998). Several scholars (i.e., Mauri, 2003; and Leenheer and Bijmolt, 2008) assert that loyalty program has become an important strategy and mechanism for retailers to increase revenue growth and has become a key component

About the Authors
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Faculty,Department of Economics and Business, School of Business Management, Universiti Kebangsaan Malaysia 43600, Bangi Selangor, Malaysia. E-mail: norasiah@ukm.my Faculty, Department of Economics and Business, School of Business Management, Universiti Kebangsaan Malaysia 43600, Bangi Selangor, Malaysia. E-mail: aniza@ukm.my Faculty, Department of Business Management, University Technology MaraMalaysia, Malaysia. E-mail: rosidahm@salam.uitm.edu.my Faculty Member, Business School, Asia Pacific Institute of Technology, Technology Park, Malaysia. E-mail: muhd_azrin@ucti.edu.my A huge combination of supermarket and general merchandise store. The IUP Journal of Marketing Management, Vol. IX, No. 4, 2010

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of CRM, serving a critical role indeveloping relationships, stimulating product and service usage and retaining customers. In addition, Liebermann (1999) observes that loyalty programs are proven to be an effective tool within the relationship marketing framework. Loyalty program is defined as the business process of identifying, maintaining and increasing the yield from best customers through interactive, value-addedrelationships (Capizzi et al., 2004). According to Sharp and Sharp (1997), loyalty programs are structured marketing efforts, which reward and encourage loyal behavior of their members. The use of loyalty program grew exponentially in the US, the UK and all around the world (Bellizi and Bristol, 2004). Recently, it was reported in Malaysian local newspaper that the loyalty program business in Malaysia iscurrently worth RM 2.4 bn and is projected to grow to RM 3.5 bn by 2010 (Ganesan, 2006). In the retail scene, loyalty programs involved a concentrated effort by retailers to build store traffic, increase basket size and increase frequency which created deeper relationship ties with its customer base (Allaway et al., 2003). Today the use of loyalty programs as a technique for firms to enhance...