Effect of Customer Loyalty on Fast Food Brand Retention

Topics: Demographics, Fast food restaurant, Demographic profile Pages: 7 (2201 words) Published: May 11, 2013

1.0 Background of Research

2.1 Problem Statement
Based on the analysis from Euromonitor International (2010), the report indicated that consumer spending on food has increased over the years, from RM 32,317.8 million (2005) to RM 44.121.5 million (2010).

According to Abdul Rehman Muhammad, Zia-ur-Rehman and Dr. Waheed Akhtar (n.d.), creating loyalty about any brand and to retain customers is an essential and crucial element and factor that influence overall performance of the company. Brand loyalty is amongst the key factors critical for managers so that they can improve their customers’ retention that in turn puts its favorable impact on the overall profits. Therefore, this research is to study what factors effecting customer loyalty on fast food brand retention.

2.2 Research Objective

Based from the research problem, the objective of this study is to explore the effect of customer loyalty on fast food brand retention. The objectives of this study were to:

* Explore factor that effect customer loyalty on fast food brand retention. * Broaden the research by setting by incorporating different age group of customer loyalty on fast food.

2.3 Research Question
* Does brand effect customer loyalty on fast food?
* What is the relation between the customer loyalty and fast food brand retention? * What is the factor that effect customer loyalty on fast food?

2.4 Proposed Theoretical Framework

Kwek Choon Ling, Yeong Wai Mun and Hiew Mee Ling, (2011) suggested to broaden the research setting by incorporating different age group of customers and drawing more respondents from different regions in the country. This may enhance the validity and generalization of the research finding. Lastly, it is suggested to utilize probability sampling technique to evaluate customer loyalty in the future research.

Age and income level can be conducted in the studied variable for future research. As age and income level effect can be analyzed on customer loyalty, as different income level groups can view price perception factor differently similarly different age groups loyalty level with restaurant and hotel can be different. (Fozia Malik, Sara Yaqoob and Abid Samih Aslam, 2012)

According to Melanie Hammond (2012), fast food restaurant use many different pricing tactics, but the most common strategies they used include value pricing, penetration pricing, customer pricing and bundle pricing. Price play important role to grab customers. If the price of food is affordable but the quality of food is zero, people will not buy it. It is not worth it for them.

Customer loyalty attribute :


Income Level


Fast Food Brand Retention
Figure 1. Proposed conceptual framework

2.5 Research Hypothesis
* Influence of customer loyalty attribute on fast food brand retention

Chaudhuri and Holbrook (2001) supported that trust will help to reduce uncertainty in consumers if they know that they can rely on their trusted brand.

Therefore, customer loyalty attribute and fast food brand retention will be used

2.6 Significant of the Research

* Ling. K. C., Mun. Y. W., and Ling. H. M. (2011), Exploring factors that influence customer loyalty among Generation Y for the fast food industry in Malaysia, African Journal of Business Management Vol. 5(12), pp. 4813-4823. *

2.0 Literature Review
2.1 Literature on the Setting of the Research
Fast food means that the food can be prepared and served quickly. However, the term is usually been used for food sold in restaurant which is prepared with precooked ingredients. Nowadays, fast food becomes first choice for people to eat because it is easier and quick. They can save their time. Brink and Berndt (2004:32) states that customer loyalty, the objective of CRM, is more than...
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