The role of customer loyalty as a brand extension purchase predictor

Abstract

The paper explores the relationship between customer loyalty to the retail brand and the purchase of non-traditional products and services (NTPS) offered by grocery retailers with their private label (i.e. over-the-counter products, photo printing, mobile communication services and travel booking). Customer loyalty to the retail brand is measured through its behavioral and attitudinal components. A survey was conducted administering a questionnaire to 480 retail customers in two stores belonging to different retail grocers. A binary logistic regression was then applied using the buying of at least one NTPS as the dependent variable (1 = buy; 0 = no buy) and behavioral loyalty and attitudinal loyalty as independent variables. Results show that attitudinal loyalty plays a significant role as buying predictor, but this depends on the NTPS offered. Theoretical and managerial implications are derived.