Impact of Consumer Perception On Customer Loyalty in Sainsbury PLC (United Kingdom)

IMPACT OF CONSUMER PERCEPTION ON CUSTOMER LOYALTY IN
SAINSBURY PLC (UNITED KINGDOM)

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CHAPTER TWO: LITERATURE REVIEW
2.1. Introduction
Scholars have recognised the significance of consumer perceptions and consumer loyalty as
an essential factor for a firm’s success and for enhancing its relationship with customers.
Inculcated by He, Li and Harris (2012), when companies understand and act according to the
customer perception and buying behaviour, customer loyalty significantly increases which
leads to sustainable competitive advantage. Particularly, researches on consumer perception
and consumer loyalty are available, however the complexities of consumer perception has not
been extensively studied (Chang and Chen, 2009). This ignites the need for further research
to extensively analyse the gaps in the previous literature in light of the topic. This research
highlights the significant impact of consumer perception on consumer loyalty. Customer
loyalty phenomenon has received significant attention in organisations.
In the previous chapter, a thorough detail about the research objective has been mentioned.
This chapter aims to study the key literature available on the topic and relate its finding to
this research accordingly. Furthermore, this chapter will utilise the information obtained from
previous literature for the theoretical framework, which will be incorporated throughout the
study. It helps the researcher in understanding the past researchers’ perspectives. In the
literature review of this study, relevant information regarding consumer perception and
customer loyalty is provided with more interlinked variables literature review.
2.2 Significance of Customer Loyalty

Brand interaction is examined to be an integral part of the customer engagement strategies as
assessed by Rutter et. al., (2016). Moreover, the study observes businesses to predict
consumer behaviour to enhance customer loyalty. Repeated purchases made by customers is
a clear indication of customer loyalty (Deng et al., 2010). Moreover, customer loyalty is
measured with customer retention to the brand and its continuous association with customers
plays a crucial role in market competition (Lin and Wu, 2011).There are numerous tools to
measure customer retention, for instance, the study by Estrin (2013) has devised that the
measure of customer associated with the brand and customer services review with which the
loyalty can be measured. According to the study by Pepe et al (2011), the mismanagement of
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the customer relationship with the brand leads to loss of a potential customer in their
purchase of products. Furthermore, this will disrupt the brand image (Hussain, et al, 2015);
Pepe et al (2011). It is also evident that customer loyalty and interaction, the management
practices are also linked with brand positioning because the effective positioning of a brand
provides the competitive edge to the brand in the industry (Khan, 2012). Moreover, it is also
believed that it has become more challenging for businesses to compete effectively in the
highly intense competition where hundreds of brands are operating. Therefore, the
competitive advantage for depends upon customer loyality (Vivek, et al, 2012; Khan, 2012).
Furthermore, according to Edward and Sahadev (2011), brand loyalty and trust is gained
through the brand quality and brand image. The profit maximisation in business has been
directly affected through different factors including customer loyalty and customer
satisfaction (Pan, et al, 2011). One of the research conducted by Glanz (2012), has described
marketing and pricing strategies as an important factor which catalyses profit maximization.
Nevertheless, the research conducted by Martínez (2013), argues that customer loyalty is the
pivotal factor that substantiates the profit maximization and is not influenced by marketing
policies or strategies. The authenticity of the latter research leads this paper to study the
importance of customer loyalty as a key factor for profit maximisation within this industry.
According to Khan (2012), customer loyalty towards the brand, the safety of products and the
quality of services are responsible to attract customers further develops the customer
satisfaction. The effect of customer loyalty could be examined by referring brands to the
customers through various means of communication including speech, which leads to a
positive brand image. In spite of the positive brand image developed through the word of
mouth, the negative image of a brand also spreads and leads towards the customer’s
resistance in purchase intention of that brand (Sahin, et al, 2011). Therefore, this spread of
negative opinion about brands also reduces customer loyalty and its trust with the brand
association.
2.3 Conceptualization of Consumer Perception

The sharing of opinion or the shared views from one customer to another customer about a
product that effects the future buying behaviour of consumer is called customer perception
(Eklof et. al., 2017). The customer perception always differs from person to person as it
reflects an individual’s experience regarding the product. Moreover, the experience with the
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product and services examines how the customer perceives the brand (Angelova and Zekiri,
2011); (Coelho and Henseler, 2012). According to the past research by Vesel and Zabkar
(2009), the optimal level of a business can be achieved by optimal level of customer
satisfaction. However, the dissatisfaction of the customer services leads to the development
of a negative brand image (Hussain, Al Nasser, and Hussain, 2015). Hence it impacts the
brand image of an organisations accordingly. Moreover, the customer perception about brand
remains with the subject of study for over the years. However, the present business and
sustainability rely highly on the customer perception about the brand and its satisfaction after
the brand experience. Thus, the extreme focus of the management practices is to gain
customer loyalty in order to become dominant in the company’s sales generation which leads
to increased revenue (Vesel and Zabkar, 2009).
In addition, there is an association between the brand perception of the customer and the
customer satisfaction level of the brand. The actions according customer perception ignites
the betterment in quality of products and services which leads to a positive change in brand
image (Coelho and Henseler, 2012). In spite of the fact that the brand experience develops
the brand perception, the negative experience also causes resistance to profitability. Similarly,
a negative impact towards the brand image does significant damage to company’s revenues
which is initiated by negativity in customer perception. (Sparks, et al, 2016). Moreover, the
satisfaction level of the customer increases the purchase intentions and thus develops a
positive customer perception. Furthermore, the positive perception influences customers to
purchase products on premium pricing as well. Understanding customer perception is
important as it develops a competitive advantage due to enhanced feedback of customers
spreading a positive marketing wave among target demography (Khan, 2012; Chen and Hu,
2010).
2.4 Factors associated with Customer Perception

Consumer perception basically refers to how customers perceived things. Therefore, if
consumers have a good perception about a certain product it would be affecting the firm’s
profitability (Wu and Lo, 2009).
2.4.1 Price Perception

Price is one of the most significant factors for any product or services. Price of a product
highly impacts the perception of the consumer regarding a particular product or service
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(Anuwichanont and Rajabhat, 2011). It has been observed that price have a persuasive
influence on the consumer as it is presented in every purchase circumstance and also
represents customers the economic expense amount which would be sacrificed while
engaging in a purchase deal. According to this perception, price signifies the amount which
should be given off. Furthermore, it has been observed that greater prices critically affect the
buying decisions (Christandl, et al, 2011). However, various scholars have presented that
price is considered as a difficult stimulus and a wide population of customers perceives it
more importantly rather than just focusing on its negative aspects. It is also observed that the
price set by the brands is perceived to be the level of quality delivered by the brand (Liu and
Lee, 2016). Similarly, it is also discussed that perception of price level had a direct adverse
impact on the consumer buying perceptions and also have an indirect optimistic impact on the
buying perceptions through the perceptions of product or service quality. Likewise, one
significant criterion for acknowledging how customers approach at such types of price
estimations consist the perception of price reference, which is explained as the price in
contrary to which customers compare the given price of a service or product (Andrés-
Martínez, et al, 2014). These types of comparison apparently present if a price is thought to
low or too high.
2.4.2 Perceived service quality

Service quality is described as the direction and degree of inconsistency among the
consumer’s expectation and perceptions (Gorla, et al, 2010). Moreover, researchers have
studied the understanding of standards customer’s uses for assessing any service quality.
Similarly, there are a few problems which are faced while assessing the service quality. It has
been suggested by the studies that for comprehending the consumer’s perception of the
service quality, the manager of the service should ponder over the perceptions of process and
input of service, as well as also on the outcomes of service (Akbar and Parvez, 2009).
However, the perception concerning the quality of the product is often misunderstood by
businesses due to limitation and biasness of their views. The reason for this has been
suggested by Steg (2014) the perceived value is often related to the changing psychological
factor which is generally difficult to understand and predict correctly. Furthermore, it has
been observed that service quality has become vitally important from the past two decades,
because of the distinctive features of services including inseparability, intangibility,
perishability, and variability. Although it has been seen that there is no agreement in the
definition and measurement of service quality and due to this the concept has obtained huge
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attention in the literature. This signifies that the evolving the quality in respect to consumer
perception is of utmost importance for sustainable competitive advantage (Hu, et al, 2009). In
addition, service quality has also been linked with several dimensional benefits which lead
toward modifying consumer perception. Similarly, it has also been viewed that service
quality also has an impact on sales. Udo, et al, (2010) stated that the more the service quality
is enhanced it would be having a more impact on the perception of consumers. Moreover, if a
consumer’s perception for the service quality is disappointing, they might shift their attention
to other service providers. Therefore, offering greater service quality refers to the success in
beating other services providers.
2.4.3 Customer experience

The perception about the customer experience has been resonated with academic and
practitioners and several managers as well as researchers (Verhoef et al, 2009). However, it
has been observed that studies on customer experience seem to be less in number in contrast
to the topics related to customer loyalty and service quality. Moreover, customer perception
is essential for the growth of the brand in the highly competitive industry due to the
experiences and buying behaviour of the customer which will decide their repetition as loyal
customers (Lemon and Verhoef, 2016). Particularly, for service providers as services are
constantly linked with experience. Similarly, due to the increasing attention towards customer
experience, an issue that is being faced in the development of strategies in companies for
enhancing their customer’s experiences.
According to Peppers and Rogers (2016), the significance of customer experience is that it
offers new ways for competition. Offering a worthy experience is also significant as it
impacts the customer’s perception for a certain service or product which also has an impact
on the expectations of consumers. According to various firms’ survey, they claim to provide
high-quality customer experience whereas their consumer contradicts with their statements.
2.4.4 Online service reviews

Online methods for obtaining consumer reviews are universal and are a part of several
consumers buying journey. Moreover, it has been viewed that most of the top online shops
gather and present customer reviews for their goods. Similarly, this method is followed by
most of the online stores as well as other stores (Black and Kelley, 2009). Organisations such
as Google, Rotten Tomatoes, Facebook and IMDb offer platforms for customers to submit
their reviews which are displayed and aggregated to other customers. Moreover, the reviews
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of customers in the present time are also being used to develop trust among consumers in
distributed marketplaces such as Uber, Airing, and eBay. Furthermore, it has been anticipated
that for online customers, reviews are not only a choice, but it has become an expectation
which is directly affecting other consumer perception for a particular brand (Browning, et al,
2013). In fact, it has also been observed that after price, reviews play a significant role in
influencing the consumer purchase decision.
Figure 3.1 Different online Reviews channels and their Rating
Source: Trackers (2019)
According to Zhou et al. (2014), increasing demand for eWOM (electronic word of mouth)
and the internet has become a significant instrument for consumers in sharing and obtaining
information on services and products. In addition, the online reviews of customers in the form
of electronic word of mouth have also become the most significant source for information in
the decision-making process of consumers (Ye et al., 2011). Furthermore, these online
reviews of product or service are more effective in influencing the behavior of consumers in
contrast to the traditional techniques such as information offered by the product or service
providers (Yang and Mai. 2010). Despite the significant dependency of customers on these
online reviews, it has also been developed an uncertain position for businesses to predict their
customer perception accurately using these reviews. The main reason presiding the
ineffective usage of the reviews are due to customers not being able to convey their issue
properly which disrupts the authenticity of their complaint to the brand. However, addressing
to each concern has proved to bring positive change in several organisations like TESCO.
Even though social media marketing has emerged as a challenging and dynamic field in the
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businesses, there are some definite limitations and constraints in the process that are diluting
it are the effectiveness of the process.
2.5 Impact of price perception on Customer Loyalty

It has been viewed that delivering and creating superior consumers value perception is
considered as a strategic tool in retaining and attracting consumers which have also become
an important factor in the success of services and products businesses. Moreover, it has been
discussed as a factor for gaining competitive advantage by Hennigs, et. al. (2013).
Furthermore, price plays a significant role in effecting consumer decision. It is notable that
customers are becoming more conscious about the quality and price (Anuwichanont, and
Rajabhat, 2011). Customer loyalty is described as a strengthening of association among an
individual’s intention and attitude. Though consumer loyalty is an important factor for firms
however, maintaining and creating customer loyalty is highly difficult (Koller, et al, 2011).
However, Price has a significant role in influencing the decision of customer for purchasing a
product and in determining the achievement of marketing a good. Price is the quantity of
money which is charged for a service or product or it is the amount of worth switch for the
customer for acquiring the benefits of utilizing service or product (Kim and Park, 2010).
While seeing a price, fair, high, low consumer perception for product or service is highly
influenced.
Pricing has been acknowledged in the marketing studies as a strategy for effecting the service
or product demand as well as firm profitability. It has a major role in influencing consumer
perception while selecting a service or product and creating customer loyalty. Currently,
customers are more concerned regarding the price of a service or product while purchasing
and this perception about the price have an impact on building consumer loyalty
(Anuwichanont, and Rajabhat, 2011). Price perception of consumer influences their decision
while selecting a product or service and in creating their loyalty with a specific service or
product. According to Rompas et al. (2018) when a consumer perceives the advantages and
perceives the value of a service or product higher than the price for acquiring it, the consumer
would become more loyal to the provider of service or product and would like to build long-
lasting relationship. Correspondingly, Consumers are more loyal to a service or product
which have less or no hidden costs and if the price doesn’t fluctuate rapidly. Similarly, Price
perception of consumer would assist service or product suppliers in creating strategies that
would be influencing consumer loyalty (Allender, and Richards, 2012). Price perceptions of
the consumer have an impact on consumer loyalty and the association among price
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perception of consumer and consumer loyalty is positive. Ferreira and Coelho (2015) have
stated that the price of a service or product can determine if service or product is considered
by customers, for gaining consumer loyalty. Consumer loyalty with a specific brand is linked
with how a consumer perceives its price. For instance, the price of a product or service which
is too high will create a good and positive perception in consumers mind regarding its quality
which will be affecting the customer loyalty for a specific brand. Consumer price perception
makes them loyal or unroyal to a brand (Bowen and Chen McCain, 2015). Researches have
shown that the perception of a price has an impact on consumer loyalty. Lastly, it has also
been presented that a more appropriate price perception of consumer would raise consumer
loyalty. Thus, the price is one of the significant strategies of firms in building customer
loyalty.
2.6 Impact of perceived service quality on customer loyalty

Service industries nowadays are creating a high impact on the market industry as it is
associated with providing quick services; hence this brings satisfaction and loyalty to the
customers as they trust on the quality and efficiency of the brand. Moreover, the better and
quality services provide sustainability to a business in the market competition thus it requires
continuous innovation and creativity for providing efficiency in services (Shin and Kim,
2008); (Carlson and O'Cass, 2011). The service quality as per the research study of Santos
(2003) is explained as the performance in business which is perceived as a priority to
customer expectations (Ishaq, I.M., 2012). Therefore, this result as the improved
organisations performance and productivity in order to satisfy customer needs whereas it
engages loyal customers with the level of trust and expectations (Kyoon Yoo and Ah Park,
2007); (Ishaq, I.M., 2012).
The perceived service quality is the behaviour that is evaluated by the customer as an
opinion about service quality and is developed due to the brand image and perception of a
brand. Therefore, the perceived quality of service leads to customer satisfaction. It has been
suggested that consumer perception is an integral factor for customer satisfaction. However,
studies have also incorporated the importance of other factors in developing customer
satisfaction for the brand. Customer satisfaction is associated directly with the customer
loyalty of a brand (Kheng et al., 2010). However, the loyalty of the customer always relates
to the perceived risk. Moreover, any gap experienced in the expectation and reality of the
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purchase intention decreases the perception of a positive brand image and thus it resists
towards having a trust of customers on the products (Gabisch and Gwebu, 2011). Therefore,
this resistance in trust becomes a challenge for the business due to which the brand loses its
loyal customers as well. The studies from past relate customer satisfaction as positively
associated with the brand loyalty, whereas the research study identifies according to Park et
al., (2006); Ehigie (2006) as referred by Kheng et al (2010), customer satisfaction as playing
a middle role between perceived service quality and customer loyalty. The perceived quality
also relates to customer loyalty as it is the stimuli that compare customer satisfaction through
which the researchers evaluates and measures customer loyalty (Kheng et al., 2010).
Moreover, the relationship and its impact further examine that the higher the perceived
service quality of the customers results as the high expectations of customers with the brand
which increases the customer loyalty towards the brand (Malik, et al, 2012); (Kheng et al.,
2010). The perception of the customer about the brand is due to the positive experience of
customers with the brand, thus it convinces the customer to increase its brand loyalty.
2.7 Relationship between customer past experiences and customer loyalty

Customer loyalty is defined as a strongly build commitment for purchasing a
particular preferred service or product in the future which produce a repetition of the same
brand. Regardless of the marketing techniques and influences which have the potential for
activating the consumer switching behaviour (Ramaseshan and Stein, 2014). Moreover, the
competition in acquiring new consumers in the market is becoming more intense in every
coming year. Therefore, retaining and capturing consumer loyalty is significant for
organisations for being a competitive player in the market and it also has a positive impact on
the long run sustainability and profitability. Furthermore, it is presented that having loyal
consumers would be more profitable in the long term in contrast to attracting new consumers
(Evanschitzky et al., 2012). So, the enhancement and development of consumer loyalty have
been converted into a strategic goal for several firms. Furthermore, it has been highlighted
that consumers have become more loyal due to the experience they have obtained in past.
Thus, many organisations in the present times are emphasizing on building consumer
engagement and also on creating the everlasting customer experience.
However, improving consumer experience is significant for consumer loyalty as well

as also for the company’s profitability (Kumar, et al, 2013). According to Slåtten, et al,
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(2011) consumer experience includes a critical aspect which influences the consumer’s
readiness for repeating their experience or recommending it to other individuals.
Furthermore, customers’ experiences have a positive relation with consumer loyalty.
Similarly, the significant features which would have a direct impact on consumer experience
are the customer collaboration with the brand, services, and price, and the result of this
collaboration would be consumer loyalty (Lemon and Verhoef, 2016). According to Peppers
and Rogers (2016) creating customer experience has become the utmost priority for managers
of marketing in the service companies. Customer experience is a way for securing the loyalty
of customers, raising the firm’s profitability, enhancing the consumer base, developing a deep
connection and ensures the firm's survival with its consumer. Thus, marketing managers are
required to offer a long-lasting and compelling consumer experience. Also, customer
experience is a critical factor which influences the willingness of consumer for repeating a
particular experience. Moreover, it has also been stated by Zhao et al, (2017) that customer
experience is the defining factor that significantly impact customer’s loyalty. Also, numerous
service companies are in quest of developing long-lasting association with their consumers
and offers best services for pleasuring their customers with the main objective of creating
brand loyalty as good consumer experience makes their customers loyal to their brand.
According to Iglesias, et al, (2011) great customer experience is highly associated with
customer loyalty. It has also been observed that consumer loyal toward a brand would least
probably switch to a different brand. However, companies also face some challenges while
developing an excellent customer experience for securing consumer loyalty, driving
awareness of the brand and eventually raising the profits. Customer experiences are viewed
as an innovative economic contribution. Rose, Hair, and Clark (2011) stated that consumers
in the present time are putting more worth to experience despite price that means consumers
are less likely to be affected by the low price of a service or product. Whereas, a good
consumer experience while interacting with a specific brand would make the consumer feel
more satisfied and eventually this satisfaction of consumer would result in building consumer
loyalty. Furthermore, the association between consumer experience and customer loyalty
have an impact on building loyalty. According to Brakus, et al, (2009), customer loyalty is
affected by consumer experience.
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2.8 Effect of service online reviews on customer loyalty

Social media role has been effective in maintaining the service quality as the
contribution of online services has become significant when associating with the customer
loyalty (Hung, et al, 2014); (Xiang and Gretzel, 2010). Nevertheless, the inefficiency in the
services that occur is mainly due to the technical issues when providing online service
quality. Thus, businesses tend to focus on providing efficient services to customers while
coordinating with them so as to have a better and positive experience in assessing the service.
In addition, social media tools also aid in easing brand interaction with the company (Xiang
and Gretzel, 2010). Therefore, the communication regarding the online services plays a vital
role in shaping the online service experience among individuals which is known as the
service online review. Further, the consideration about this review is crucial in developing
customer’s satisfaction (Guo, Barnes and Jia, 2017; Kusumasondjaja, et al, 2012). The
positive role of service quality that is experienced by the customer spreads rapidly on social
media and thus the review of that service experience by an individual engage others as well.
Moreover, the experience shared online is reviewed and communicated at the global network
which therefore results as developing loyal customers around the world. Thus, global network
communication brings more customers while developing an increased market share.
Moreover, it creates a marginal impact on the business revenue generation as sales increase
business growth. The business operations and services that give positive experience remain
sustainable with a competitive advantage of having a customer online network.
However, the positive experience is not the only element in online services that
affects customer loyalty. According to Bradley (2016), the negative feedback significantly
disrupts the brand image of the organisation. As there are a lot of individuals sharing online
service experiences, therefore, the individual with negative shared experience results as a big
challenge for a firm to retain its customer loyalty (Sparks, So and Bradley, 2016; Sotiriadis
and Van Zyl, 2013). Since there are lots of communication network that brings socialization
at its optimum level, therefore it becomes difficult to manage online complaints about
customers regarding the problems faced in their experience of service (Kusumasondjaja, et al,
2012; Sotiriadis and Van Zyl, 2013). Hence, the tracking of customer’s information regarding
socialization in a business is essential for better results in online service reviews and further
according to Sotiriadis and Van Zyl (2013), the response of business service providers is
crucial for customer satisfaction. It has been discussed in the literature that online service
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reviews have a significant impact on customer’s perception which, therefore, justifies the
importance of online service reviews.
2.9 Conceptual Framework

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Price
Perception
Perceived
Service Quality
Customer Customer
Customer
Perception Loyalty
Experience
Online Service
Reviews
Figure 1: Conceptual Framework
The conceptual framework is used as a research model to explain the subject of the
study where it further displays the factors used in the research study with an arrow showing
the impact of variables. The above figure shows the conceptual framework where the
independent variables are linked with the dependent variable and showing their impact which
supports the objectives of the research study. This conceptual framework examines the
impact of customer’s perception on customer loyalty. Furthermore, the factors that are
affecting the customers’ loyalty are examined in the research study where the impact of price
as perceived by the customer is associated with the loyalty of the customer. Moreover, the
service quality is essential in interaction with the customers, therefore, the service quality
which is perceived by the customer is evaluated. This evaluation of perceived quality shows
the impact on the customer’s loyalty. Furthermore, the experience of customers is also
identified as one of the factors that engage with increased customer loyalty. In addition to the
factor, the online services are also essential in the customer’s satisfaction and loyalty towards
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the brand, therefore, the e-services are also identified as the important aspects affecting the
customer’s loyalty.
2.10 Theoretical Framework

The previous section displays the conceptual framework of the study highlighting the
variables and factors involved. In addition, the theoretical framework used in this section of
the research is the examination of theories that are applicable to the conceptual framework
applied. Therefore, analysing the dependent and independent variable of the research study,
the theory of reasoned action and the expected-value theory applied to this framework and
further examines the variable and factors association used in the study.
2.10.1 Theory of Reasoned Action

The theoretical model of reasoned action was developed by Fishbein and Ajzen
(1975) which is based on the attitude and behavior of individuals, where it explains the
prediction to the nature of the behavior. Furthermore, it explains the expectations that were
regarding the behavioral action before the practical evaluation of that behavior (Fishbein and
Ajzen, 2011). The theoretical framework for this research study involves the independent
variable of consumer perception and the dependent variable of customer loyalty. The variable
in the research study that is related to the forecasted behavior involves customer loyalty,
whereas the variable that includes the measurement of the attitude towards the behavior is
customer perception. Furthermore, customer perception involves the factors which are price
perception, perceived service quality, customer experience and online service reviews.
Therefore, the application of the theory to the variables involves the factors of independent
variables which represent the expected attitude of individuals and further the measurement of
the impact on the forecasted dependent variable regarding the prediction of customer loyalty.
The factors that represent the independent variables examine the perception of price
and the service-quality, which further evaluates the prediction towards the behaviour of
customer loyalty. As the brands involving the premium pricing are expected to have quality
service, therefore the customer satisfaction increases with the customer loyalty which shows
a positive association of the variables. However, the negative results of the perceived
outcomes result as the negative association between variables. Furthermore, the expectation
of positive customer experience and positive online reviews service reviews results as
increased customer loyalty whereas the negative exposure decreases the loyalty of customers.
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Using the application of this theory in the business the expected behaviour with the
forecasted attitude of the customer could be applied and achieved with the desired outcome of
business performance and productivity.
2.10.2 Expected-Value Theory

Another application of theory in this framework is the expected-value theory which
evaluates the values related to the factors is involved in the variables, whereas the expected
significance of the factors is evaluated and explained. Martin Fishbein in mid-1970
represented expected-value theory (EVT) as it is applied to the attitude and the prediction of
attitude is further examined (Liu and Ha, 2010). Thus, applying the theory to the framework,
the attitudes forecast is applied to the customer perception where the perception of the price
and service quality involves. Therefore, this could be forecasted as a negative or a positive
association with the research framework. Moreover, the evaluation of customer experience
and online service review includes the forecast of the positive or negative association of
customer perception. The application of theory in business examines the uncertainty
regarding business growth and further the customer demand in business could also be
examined.
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CHAPTER 3: METHODOLOGY
3.1. Introduction
The purpose of this chapter is to identify the techniques and methods that have been
used in order to conduct the study and attain feasible outcomes that are likely to support the
research. Moreover, the chapter provides a detailed overview of the necessary techniques
used in the presented research. In order to clearly explain the research methodology section
Saunders and Rojon (2014) onion model has been applied which clarifies the stages of the
techniques used to obtain accurate answers which are highly relevant to the problem stated in
the research. Furthermore, the onion model can be used as an effective tool in order to design
strategies that can be implemented in the research methodology section in order to obtain
accurate results (Wahyuni, 2012).
In order to obtain the accurate answers for the topic, which is to identify the impact of
consumer perception on customer loyalty in Sainsbury PLC UK, the Saunders's model has
been used as it incorporates the factors including research philosophy, approach, data
collection methods, etc. Furthermore, the chapter provides the ethical considerations that
have to be taken and the limitations of the research, which discusses the barriers when
conducting the research. Saunders et al.’s (2012) model, which is the research paradigm used
for this dissertation is represented in Figure 1 below.
The research onion is an effective tool to identify the techniques used in the research
methodology section. The research has made use of the research onion in order to identify the
research approaches and techniques used. Due to the systematic guidelines and the set of
beliefs provided, the research onion is understood to maintain the efficiency and effectiveness
of the research process.
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Figure 3.2Research paradigm based on Saunders et al. (2012)
3.2. Saunder’s Onion Model
3.2.1. Research Philosophy

The purpose of the research philosophy is to support the researcher in order to use the
data that has been obtained in order to effectively conduct the research and reach accurate
answers. Moreover, the research philosophy can also be referred to as the groups of views
that are according to the characteristics of the topic that is being presented in the research
(Saunders et al.’s., 2012). The research philosophy is supposed to be set according to the
aims and objectives of the topic and the best one must be chosen in order to achieve the aims
of the research.
In order to further understand the concepts of the research, it is important to

implement the right type of research philosophy since results that are according to the topic
must be achieved. There are however three types of research philosophies which can be used
according to the research that is being conducted which are positivism, interpretivism, and
pragmatism. The philosophy of positivism is considered to be highly focused upon using only
concrete data such as statistical and numeric data. Positivism, however, supports the use of
facts and figures or data which is already available and not based upon views of others. The
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philosophy of positivism is highly regarded to negate an individual's opinions and detailed

explanations (Mack, 2010).
On the other hand, interpretivism is regarded to be the complete opposite of

positivism and disregards using any statistics and numeric data. This type of philosophy
considers focusing on individual's opinions and views. Furthermore, the interpretivism
philosophy is regarded to be based on observing the behavior of individuals and their
assumptions on the topic presented in the topic. In this type of philosophy, the emotions and
responses of individuals are explained further which support the topic presented in the
research (Goldkuhl, 2012).
The third type of research philosophy is pragmatism which is considered to be a

medium between positivism and interpretivism. Research based on the philosophy of
pragmatism is considered to include both the numeric data and detailed explanations
following a mixed method approach (Smith, et al, 2011).
The research incorporates the use of the pragmatism philosophy in order to analyse
the impact of consumer perception on customer loyalty in Sainsbury PLC UK. The reason for
implementing this type of research philosophy is to understand the experiences, emotions,
and opinions of individuals. Another reason for using pragmatism is because the research is
based upon obtaining views of the customers that have visited the Sainsbury UK store and
also conducting the survey.
The responses collected has been considered to assess the personal opinions and
emotions of the respondents selected for the study. Results of the research are based upon
individual views and opinions and upon the number and numeric data which was obtained
from the survey. Furthermore, it is also important to understand the perception of the
customers towards the environment of the Sainsbury PLC store, thus pragmatism is
considered to be the appropriate research philosophy in order to obtain best quality outcomes
according to the research. The application of the pragmatism philosophy and the research
onion model can be justified as it helped the researcher to understand the nature of the
research.
20
3.2.3. Research Approaches

A correct research approach allows to conduct data in an effective manner and there
are two types of research approaches which are deductive and inductive. The two types of
research approaches enable the research to be conducted in a systematic manner.
Furthermore, the inductive approach is also considered to lead to developing new theories
and disregards the use of any facts and figures. The newly generated theory can be used and
implemented into any existing theory using this approach. Moreover, the inductive approach
is highly associated with the qualitative research design which also follows the interpretivism
research philosophy and is based upon explaining responses obtained from individuals
(Creswell and Creswell, 2017).
On the contrary, the deductive approach is considered to be using the approach which
is based upon the quantitative research design and the positivism research philosophy.
Moreover, following the principles of positivism, it is important to state that the deductive
approach is different from the inductive approach as it disregards the concept of providing
explanations and descriptions and focuses on facts and figures. It is highly based upon data
that already exists and provides specific details not based upon personal opinions and caters
specific information (Bernard and Bernard, 2012).
In order to conduct this research in an appropriate manner, the researcher followed the
inductive approach. The other reason for using the inductive approach is due to the
pragmatism research philosophy being used and the qualitative research design. The reason
for not using the deductive approach since the research is highly entitled as to identify the
feelings of individuals and also focused upon obtaining facts. The interrogative interviews
provided theories and explanations that clarified the emotions and views about the Sainsbury
PLC store in the UK. Furthermore, the inductive research approach will be able to support in
identifying the traits and behaviour of the respondents that have been taken in order to
achieve outcomes for the research. Moreover, another reason for not using the deductive
approach is due to the fact that this research has not been done before and the inductive
approach allowed the researcher to develop new theories and concepts.
3.2.3. Research Strategy

The research strategy identifies the strategies and techniques that implemented in the research
by the researcher in order to attain correct and accurate outcomes. (Verschuren, Doorewaard
21
and Mellion, 2010). In this research, the research has made use of the qualitative research
design and use the inductive research approach. Moreover, the research strategy is also
considered to apply the research philosophy of interpretivism which makes it possible to
achieve results that are based upon opinions, human views, suggestions and respondent
behaviour. Therefore, the research strategy applied in order to obtain responses is that of
interrogative interviews which consisted of questions that are semi-structured and can
provide a complete description of the topic that is to be discussed.
The semi-structured interrogative interviews questions allow respondents to provide complete

details and can be considered to be a part of the qualitative inductive approach. The answers
of the interrogative interviews provide the researcher of the necessary details to understand
the significant impact between the variables that are present in the topic of the research which
is consumer perception and consumer loyalty. Moreover, the responses from the interrogative
interviews provide the researcher of the adequate effect of the independent variable on the
dependent variable utilizing the views and opinions based upon the Sainsbury PLC.
3.2.4. Research Choices

The research choice is considered to be associated with the methods that can be chosen in
order to effectively attain the results related to the objectives of the research study. Moreover,
there are a total of three choices that can be incorporated in research which are mono-method,
mixed method and multimethod. The mono-method choice is considered to be only using
only one type of research design which is either quantitative or qualitative. The mixed
method choice is considered to be using both the research designs i.e. quantitative and
qualitative (Johnston, 2014).
Furthermore, the multi-method choice is considered to be using both the research designs
which can be used to develop a single data set. Moreover, the research choices are highly
based upon the type of research philosophy that has been applied in the research. If the
research is based upon the principles of pragmatism philosophy then the multi-method or the
mixed method can be applied. The multi-method and mixed method, however, allows the
research to not be limited to only one research choice, while the mono method limits the
researcher to only use one of the research designs that are either quantitative or qualitative
(Mayer, 2015).
22
The research that has been applied by the researcher in the research is that of multi-
method since the researcher focuses on using the qualitative and quantitative research design.
Moreover, the topic of the research which is to identify the impact of consumer perception on
customer loyalty in Sainsbury PLC UK only allows using the qualitative design and the
interpretivism philosophy. The reason being is that it is important to understand the views of
the individuals regarding the store, which are further analysed. Moreover, rest of the
strategies would likely be able to lack in providing quality results to aid the topic of the
research.
3.2.5. Time Horizons

The time horizon is used as a time table which defines the period of the dissertation or time
taken for its completion. It further provides the steps and the time taken to complete each
section of the dissertation. The researcher has followed the multi-method (qualitative and
quantitative) design therefore, cross sectional time horizon is the appropriate selection.
23
Figure 3.3: Time Horizon
3.2.6. Techniques and Procedures, and Research Instruments

The last layer of the research onion discusses the possible techniques and procedures that can
be undertaken in order to complete the research. Moreover, the research is however
considered to be using interrogative interviews which provide the researcher to understand
the feelings and views of the individuals. Furthermore, primary research has been conducted
with regarded to understand the impact of consumer perception on consumer loyalty in the
Sainsbury PLC store. The interview questions are entirely based on the objectives of the
research.
The advantage of using the interrogative interviews is to effectively achieve the results of the
research and that they are easy for the respondents to understand and provide a whole range
24
of answers. Moreover, the answers of the interrogative interviews have been useful for
understanding the behaviour and thinking of the respondents.
3.2.6.1. Data Sources

There are however two sources of data, primary and secondary that can be used by a
researcher for the data collection. Primary research is considered to be research that is
obtained directly from the source and has not been used before. On the other hand, secondary
research is considered for obtaining data from sources that have already been used in books,
articles, newspapers and company reports (Taneja, Taneja, and Gupta, 2011). The researcher
has made use of a primary source of data in the form of interviews and survey questionnaire
from the customers of Sainsbury PLC.
3.2.6.2. Research Sampling

There are two sampling techniques that can be used to conduct research that is non-
probability and probability sampling techniques. The probability sampling technique is
regarded to give equivalent chances to all the participants and does not cause any
discrimination. On the hand, the non-probability sampling is considered to be the complete
opposite and does not give a fair chance of selection to the participants (Taherdoost, 2016).
The researcher in this research has used convenience sampling which is a part of non-
probability sampling. The purpose of using this is due to the ease of data collection and the
small sample size of individuals which deliver their views on the questions asked according
to the topic. Convenience sampling made it easy for the researcher to easily access the data.
The population size for this research is 15 for the interviews and 50 for the survey
questionnaire, who are mainly customers that visit the Sainsbury PLC UK. The reason for
choosing this type of sample size is because it provides the researcher with direct access to
the customer's perception of their loyalty towards the Sainsbury PLC.
3.3. Data Analysis
The data collected from the interviews have been analysed using thematic analysis which is
useful for explaining the themes and values presented in the answers of the respondents. The
25
thematic analysis is the widely used analysis technique for qualitative data which the
researcher had been collected by interviews. The researcher through thematic analysis was
able to develop patterns according to the objectives and aims of the study. Then the collected
responses were then placed in the specified themes respectively. The thematic analysis
provides further supports the background of the research and provides extensive knowledge
of the customer's perception regarding Sainsbury PLC. For analysing the data obtained from
the survey, descriptive analysis is used.
3.4. Research Ethics

In order to perform the research in an ethical manner, it is important to conduct the research
in abiding by the rules and regulations imposed. Incorporating with the research ethics, the
research becomes more authentic and reliable. Since the research is focused upon using
interviews and questionnaire, it is important to conceal the identity or personal information of
the respondents. Moreover, the responses of the participants have not been exploited or
altered in accordance to the researcher’s interest.
3.5. Research Limitations

 The research had posed a time constraint since the interviews took time to be
conducted.
 The low sample size provided lack of information and only focused on
understanding the customer views rather than managerial.
 The respondents hesitated to provide interviews since due to their lack of trust.
26
CHAPTER FOUR: DATA ANALYSIS
4.1. Introduction
The main purpose of this chapter is to provide the analysis of data collected from the
survey questionnaire and interviews. The data was collected from customers of Sainsbury
Plc. and in this chapter, their responses will be analysed by using different themes and
justification from previous literature. Furthermore, the survey is analysed by using different
measures such as mean, median, mode and standard deviation. Hence, the chapter has been
divided into sections and subsections where the first section has incorporated thematic
analysis. The thematic analysis has been the chosen data analysis technique and in this
chapter, it has included numerous themes based on the interview questions, aim and
objectives of the study and literature review. Each theme has included different responses and
later on those responses have been analysed and justified by using previously conducted
studies. The second part contains quantitative analysis and responses against 10 questions
which were asked from 50 customers. Lastly, the chapter has incorporated the discussion of
the objectives where findings of survey and interview have been triangulated with the
previous literature to ensure that the research has achieved its main aim and objectives.
4.2. Thematic Analysis
4.2.1. Price Perception and its Impact on Customer loyalty

The first is based on the interview question designed for the customer to find their
perception regarding price and to identify if it impacts their loyalty towards the brand. This
theme is also justified by the literature where it was opined that perception of price signifies
the amount which should be given off and thus it has been observed that greater prices
diversely affect the buying decisions and customer loyalty as well (Christandl, et al, 2011).
One of the respondents highlighted,
"In my opinion, the price is the most important element that we as customers check
out when purchasing any product or opting for any service. I would really like to prefer the
product which is available at lower prices and I might also want to buy from the same
brand"
Another respondent said,

27
“I believe that the price has a significant role in influencing the decision for
purchasing a product or service and it can have a similar impact on other customers as
well. It’s also because while we see a price, fair, high or low our perception for product or
service is highly influenced.”
One of the respondents also highlighted the importance of price perceptions for
customers by stating,
“I think, here we must note that in the present time customers are more concerned
about the price of a service or product while purchasing and this perception about the price
have an impact on their purchase decisions as well. You can say that price perception of
consumer influences their decision while selecting a product or service and in creating their
loyalty with a specific service or product”
Another respondent highlighted a very important point,
Oh, the price is very important because I think when a consumer perceives the
advantages and perceives the value of a service or product higher than the price for
acquiring it; the consumer would become more loyal to the provider of service or product
and would like to build a long lasting relationship. This means that if the price is ensuring
all the product benefits, I would definitely like to buy from the same brand"
The findings derived from the survey interview have emphasised on the fact that price
can have a significant effect on customer loyalty. The findings have opined that price has
been playing a substantial role in persuading the decision making the power of customers for
purchasing a product or service and it can have a similar impact on other customer loyalty as
well and this finding is also coincided with the study of Anuwichanont, and Rajabhat (2011)
commenced in the literature review. It has also been supported by the previously conducted
studies such as Hennigs, et al, (2013), Anuwichanont, and Rajabhat (2011) and Koller, et al,
(2011) that stated that price perception has a significant impact on customer loyalty. Ferreira
and Coelho (2015) have also stated that the price of a service or product can determine if
service or product is considered by customers, for gaining consumer loyalty. Hence, the
primary findings of the study have been justified by the previously conducted studies.
28
4.2.2. Perceptions regarding Service Quality and its Relationship with Customer
Loyalty
The second theme is linked with the interview question where customers have been
asked about how they perceive the brand as if it is providing efficient services to them. This
theme has also been supported by the literature where it was commenced that perceived
quality in service leads to customer satisfaction which is associated directly with the
customer loyalty of a brand (Kheng et al., 2010). Regarding this, one of the respondents said,
"I think that I would perceive the brand as highly authentic and credible if the
quality of service is high. It is also because service quality needs a continuous prediction of
what consumers will be expecting from the brand and. I would say it also has an impact on
how much they would purchase from the brand. So, if consumer's perception for the
service quality is disappointing, they might shift their attention to other service providers”
Another respondent highlighted,
“Brands that are providing quick services can be perceived as the ones that can
provide high satisfaction. I believe that this brings not only but also my level of trust in the
quality and efficiency of the brand. Now with this consideration, I believe that the better
quality services show that the company is inclined towards continuous innovation and
creativity for providing efficiency in services”
Another major viewpoint has been shared by one respondent, who stated,
“Well, according to my viewpoint, service quality shows how the brand has been
able to prioritise customer expectations. So the brands that provide efficient service quality
can be perceived as the ones that are engaged in making continuous improvements to
achieve a higher level of customer satisfaction. You can see at this point that service
quality can satisfy customer needs and it engages them in making purchases in future as
well because it is simply a promise of trust and expectations offered to the customers"
One of the respondents also highlighted,
“Well, it the brand is providing efficient service quality then the perceived service
29
quality is the behaviour that is evaluated by the customer as an opinion which can further
develop a strong brand image and perception of a brand. Therefore the perceived quality in
service leads to customer satisfaction”
With respect to the above-mentioned responses, it can be stated that perceptions

regarding service quality can have a positive relationship with customer loyalty. However,
customers consider brands as highly credible if service quality is based on continuous
improvements of what consumers have been expecting from the brand. The previous
literature has also supported the notion that the improvement in service quality brings loyalty
and the level of customer satisfaction (Udo, et al, 2010). Therefore, this result as the
improved organisation performance and productivity in order to satisfy customer needs
whereas it engages loyal customers with the level of trust and expectations (Kyoon Yoo and
Ah Park, 2007; Ishaq, 2012). The perception of the customer about the brand is due to the
positive experience of customers with the brand, thus it convinces the customer to increase its
brand loyalty. The findings can also be justified by the fact that Gabisch and Gwebu (2011)
stated that service quality is important because it is evaluated by the customer as which can
further develop a strong brand image and perception of a brand. Hence, the findings have
been justified by the previously conducted studies indicating that the aim and objectives of
the research have been achieved.
4.2.3. Importance of Service Quality for Customers

The third theme is created for analysing customers’ responses regarding the
importance of service quality and how it can allow them to make frequent purchases. This
theme has also been supported by the literature where Kheng et al. (2010) have identified that
service quality is highly important for customers as it helps them to achieve higher
satisfaction. For this, one of the respondents also highlighted,
"Well, I believe that service quality is highly important for the customers. But, here
it is important to mention that any, if the gap is experienced between expectation and
reality of consuming brand, decreases the perception of a positive brand image and thus it
resists towards having the trust of customers towards the products”
“For me, the quality of service is very crucial and I think that it plays a very
30
important role in customer satisfaction. With respect to your question, I also believe that
the perceived quality also relates with much I would like to purchase from the same
brand.”
Another major viewpoint has been shared by one respondent, who stated,
"I think that with better-perceived service quality, my expectations with the brand
would ultimately increase. It means that this perception about the brand is due to the
positive experience that I had with the brand; thus with the better service quality, I think
that I would be more convinced to make a purchase from the similar brand"
The findings of survey interview have professed that the relationship between service
quality and customer loyalty is evident and the higher the perceived service quality of the
customer's results as the high expectations of customers with the brand which increases the
customer loyalty towards the brand. This is also evident in the findings of the study
conducted by Malik, et al (2012) reviewed in the literature. The perception of the customer
about the brand is due to the positive experience of customers with the brand, thus it
convinces the customer to increase its brand loyalty. Shin and Kim (2008) and Carlson and
O'Cass (2011) have also demonstrated that for customers, service quality is regarded as
highly important. Hence, the findings have been justified by the previously conducted
studies.
4.2.4. Perception of Customer Experience and Customer Loyalty

The following theme is linked with the interview question where customers were
asked to comment on the fact that if the brand is not able to ensure better customer
experience, would they still want to buy from the same brand. The literature has also
supported this notion that great and positive customer experience is highly associated with
customer loyalty (Iglesias, et al, 2011). Hence, while responding to this question, one of the
customers said,
“No! I would definitely not like to buy from the same brand where my customer
experience was not up to the mark. It is because experience with the brand is significant for
us because things which we are purchasing they would encounter a different type of
experience related to it such as indifferent, bad or good and that might be indirectly or
directly affect our loyalty towards the brand"
31
"Well, for service users like us, services are constantly linked with our experience.
Similarly, due to the increasing attention towards customer experience, an issue that is
being faced by is how our experience has been with the brand the first time we opted for it.
So I believe that offering a worthy experience is also significant as it impacts the
customer’s perception for a certain service or product and also has an impact on the
expectations of consumers as well”
One of the respondents also highlighted,
"I think that consumers have become more loyal due to the experience they have
obtained in past consumer experience includes a critical aspect which influences the
consumer's readiness for repeating their experience or recommending it to other
individuals. Additionally, the consumer experience is effective at the time when it is
proficient in promoting engagement of consumer and building memories inside them. So
obviously, if the brand is not ensuring good experience the first time, no one would want to
use it again”
The aforementioned findings of survey interview have been significant for identifying
the customer perception towards those brands that are not able to offer positive customer
experience. It has indicated a strong relationship between customer perception created
through past experiences and customer loyalty. It is also evident in the literature findings of
the study where the research of Kumar, et al. (2013) has professed the same notion. The
findings identified that customers are prone to disregard the brands and would not like to
make the purchase again if are not provided with better experience or if their past experiences
are not positive. This can also be justified by the findings from previous literature.
Cultivating consumer experience is important for achieving consumer loyalty as well as also
for the company's profitability (Kumar, et al, 2013). According to Slåtten, et al, (2011),
consumer experience comprises of a critical feature which impacts the consumer's readiness
for repeating their experience or recommending it to other individuals. With respect to this,
the findings have been justified by the previously conducted studies and hence, the main aim
and objectives of the research have also been achieved.
32
4.2.5. Important of Past Customer Experiences for Customers’ Frequent Purchases

This theme is associated with finding if the customers agree to the fact that positive
past customer experiences are highly important for making frequent purchases from the same
brand. This notion has also been linked with the findings of literature review where it has
been identified that consumers have become more loyal due to the experience they have
obtained in past (Ramaseshan and Stein, 2014). Therefore For answering the question, one of
the respondents highlighted,
“I think that the most important thing for me while buying any product is to find
what past experiences it has provided me. I also believe that past experience is a way of
identifying if I really would like to become their regular customer. But of course, if past
experience is good then it can be developing a deep connection with the brand"
"You know, consumers in the present time are putting more worth to experience
despite the price that means we are less likely to be affected by the low price of a service or
product and are more influenced by our experiences. Whereas, a good consumer
experience while interacting with a specific brand would make us feel more satisfied and
eventually this satisfaction would result in what you called building consumer loyalty."
“Obviously, my past, experiences with the brand are critical for influencing my
willingness of repeating a particular experience; meaning buying the same product again.
So I believe that customer experience is a key reason why I would like to make frequent
purchases from the brand.”
The findings from the survey questionnaire have identified that positive customer
experience is highly important for achieving higher customer loyalty. It has been opined that
better customer experience can incline customers to perceive the brand being able to fulfil
their demands and provide satisfaction which is also evident in the study of Iglesias, et al,
(2011) reviewed in the literature. It has also been identified in the literature that creating
customer experience has become the utmost priority for managers of marketing in the service
companies (Peppers and Rogers, 2016). Customer experience is a way for securing the
33
loyalty of customers, raising the firm's profitability, enhancing the consumer base,
developing a deep connection and ensures the firm's survival with its consumer (Lemon and
Verhoef, 2016). Hence, the findings have been justified by the previously conducted studies
indicating that the aim and objectives of the research have been achieved.
4.2.6. Impact of Online Service Reviews on Customer Purchase Decision from the
same Brand
This last theme is generated from an interview question where customers were asked
about their opinion regarding online review as to how much online service reviews can
impact their purchase decision from the same brand. This notion is taken from the literature
where it has been identified that online service reviews can impact customer loyalty towards
the brand (Guo, et al, 2017). Hence, for providing their viewpoint, one of the respondents
commented,
"I think that the use of online service reviews has introduced the new way of
finding how a certain brand has been able to provide quality-based services at a fast pace.
But you know, if the customers provide an online review regarding the inefficiency in the
services, I would definitely avoid buying from such brands"
"Well, you know how the world is transforming and how technology has made it so
easy for us to find about the brands and their quality. So, the communication regarding the
online services plays a vital role in shaping the online service experience among
individuals and this evaluation about this review is crucial in developing customer's
decision of buying from the similar brand.”
Oh, I believe that the positive role of service quality that is experienced by the
customer spreads rapidly on social media and thus the review of that service experience by
an individual engage others as well. The positive experience is not the only element in
online services that affect customer loyalty, the negative shared experience also becomes
crucial for us to make purchases”
34
One of the respondents also highlighted
“There are lots of communication network that brings socialization at it best

possible level, therefore it becomes easy to find online complaints about customers
regarding the problems they faced in their experience of service or product. I think that the
tracking of customer’s online service reviews is convenient for finding if I would really
like to make a purchase from the same brand"
The aforementioned findings of the study have opined that online service reviews are
important for customers to create a perception of the brand. Most of the customers obtain
information about the brand through different channels of social media. It has also been
justified by the previously conducted studies such as Kusumasondjaja, Shanka and
Marchegiani (2012) and Sotiriadis and Van Zyl (2013) that emphasised on the notion that
customers either generate positive or negative perception about the brand through online
reviews available on numerous channels. The positive role of service quality that is
experienced by the customer spreads rapidly on social media and thus the review of that
service experience by an individual engage others as well. Hence, the findings of the research
have been justified by the findings of previous studies providing that the main aim and
objectives of the study have been achieved.
4.3. Quantitative Analysis
Question 1: What is your magnitude of agreement that price perception has a positive
impact on the customer loyalty?
Price perception
Response Total No of Responses
Options
s respondents (in %)
Strongly
Disagree 5 50 10%
Disagree 4 50 8%
Neutral 6 50 12%
Agree 18 50 36%
Strongly Agree 17 50 34%
Standard
Mean Median Mode
deviation
3.76 4 4 1.29
Table 1: Price Perception
35
Figure 4: Price perception

Finding and analysis
From the feedback gathered during survey, it was identified that the customers
strongly agree with the fact that the price perception has a positive impact on the loyalty. The
mean of the question represented the value of 3.76, which shows that if the prices of the
products are affordable, the customers would remain attach with the business. Sainsbury Plc.
has a strong competition in UK and therefore, this positivity is a good sign. However, as the
standard deviation is showing the value of 1.29, the company should pay attention to its
pricing strategies for improving the customer satisfaction.
Question 2: How far do you agree that the perceived service quality can positively
influence the customer loyalty?
Perceived service quality

Options
Strongly
Disagree 7 50 14%
Disagree 5 50 10%
Neutral 2 50 4%
Agree 11 50 22%
36
Standard
Mean Median Mode
deviation
3.84 4.5 5 1.49

Table 2: Perceived service Quality
Figure 5: Perceived service quality

Finding and analysis:
From analyzing the above table it can be identified that the perceived quality can
positively influence the customer loyalty as the results for the mean are showing the value of
3.84. The percentage of positive responses is also 72%, showing the importance of this factor.
Furthermore, the standard deviation of this question is also exceeding the value of 1 which
can create issues for company in future. Therefore, it is important that the Sainsbury should
design strategies and policies which can improve the quality of the services so that the
customers can be retained.
Question 3: Do you believe that the customer experience helps in developing the
customer loyalty?
Customer experience
Options
37
Strongly
Disagree 4 50 8%
Disagree 6 50 12%
Neutral 4 50 8%
Agree 14 50 28%
Standard
Mean Median Mode
deviation
3.88 4 5 1.32
Table 3: Customer experience
Figure 6: Customer experience

Findings and analysis
Through the observations collected during the questionnaire, it was determined that
customers fully agree that the experience of customers has a positive impact on loyalty. The
average is 3.88, which indicates that if the customers are provided with good experience, it
will increase their satisfaction level and also influence the loyalty. Sainsbury has strong
competition in the United Kingdom and, therefore, this is a good sign. However, given that
the standard deviation shows a value of 1.32, the company must pay attention to the provision
of good experience to improve customer satisfaction.

38
Question 4: Do you think that online service reviews are important to be satisfied for
improving customer loyalty in Sainsbury PLC?
Online service reviews

Options
Strongly
Disagree 4 50 8%
Disagree 8 50 16%
Neutral 5 50 10%
Agree 15 50 30%
Standard
Mean Median Mode
deviation
3.7 4 5 1.33
Table 4: Online service reviews
Figure 7: Online service reviews

Findings and analysis:
The initial investigation, presented by independent representatives, shows that the
satisfaction of online service reviews has an impact on the customer loyalty. For this query,
the responses collected were true, as can be found in the table provided. It tends to evaluate
that of the 50 respondents, the reaction was 15 and 18 categorically when choosing the agreed
39
and strongly agreed options. This means that 66% of the respondents said that their reaction
was affirmative, while the rest was resolved by a negative and impartial reaction.
Question 5: How far do you approve the fact that Sainsbury strives to offer its
products and services at reasonable price?
Reasonable price
Options
Strongly
Disagree 7 50 14%
Disagree 8 50 16%
Neutral 2 50 4%
Agree 15 50 30%
Standard
Mean Median Mode
deviation
3.58 3.58 5 1.47

Table 5: Reasonable price
Figure 8: Reasonable price

Findings and analysis:
Other question which was designed to identify the reasonability of price on the
customer loyalty, showed that it has a positive impact on the loyalty of customers. For this
40
consultation, the responses collected can be identified from the provided table. It tends to
evaluate that of the 50 respondents, the answer was positive in 15 and 18 when choosing
separately the options agreed and strongly agreed. Standard deviation shows that the risk is
high as the answer is greater than 1. Therefore, it is important that Sainsbury should pay
attention on these strategies for improving customer loyalty.
Question 6: Do you believe that Sainsbury works diligently to handle and solve its
customers’ complaints?
Customers’ complaints
Options
Strongly
Disagree 5 50 10%
Disagree 5 50 10%
Neutral 3 50 6%
Agree 17 50 34%
Standard
Mean Median Mode
deviation
3.84 4 5 1.33
Table 6: Customer complaints
Figure 9: Customer complaints

Finding and analysis:
41
It can be observed in table 6 that the resolution of the customer complaints have an
optimal impact in the loyalty of customers. It is also considered as one of the major
advantages for Sainsbury. The value of standard deviation, which is showing the figure of
1.33, represents that the company has a high risk in this area. The mean of the question is also
presenting the positive responses gathered from the customers.
Question 7: As compared to the other competitors, Sainsbury values its customers.
Do you agree with this fact?
Valuation of customers
Total No of
Responses
Options Responses respondent
(in %)
s
Strongly
Disagree 5 50 10%
Disagree 5 50 10%
Neutral 7 50 14%
Agree 12 50 24%
Standard
Mean Median Mode
deviation
1.35962179
3.78 4 5 6
Table 7: Valuation of customers
Figure 10: Valuation of customers

42
The mode value of this question is 5 which shows that the participants of the survey
responded positively towards the question. It means that customer loyalty is influenced with
the valuation of the customers. Standard deviation of the question is high and greater than 1,
which is indicating the risk factor. Sainsbury values its customers as it keeps providing them
with free vouchers and discounts so that their satisfaction level can be maintained. The
average for this question is also positive showing that the customers are happy with the
treatment from the company.
Question 8: Do you believe that Sainsbury understands the needs of customers and
satisfy them diligently?
Customer needs
Total No of
Responses
(in %)
s
Strongly
Disagree 6 50 12%
Disagree 8 50 16%
Neutral 4 50 8%
Agree 10 50 20%
Standard
Mean Median Mode
deviation
3.68 4 5 1.48
Table 8: Customer needs
43
Figure 11: Customer needs

Findings and analysis
In table 8, the mode value is 4, which indicates that the fulfilment of customer needs
creates a positive impact on the loyalty. Without the fulfilment of their needs, the business
cannot grow as the retail companies are designed to satisfy the daily needs of the people.
Sainsbury is striving hard to design certain strategies, which can fulfil the requirements of the
consumers so that the business can observe growth. However, it can be seen that the standard
deviation is high which poses risk for this area.
Question 9: What is your magnitude of agreement regarding a fact that the services
of Sainsbury have a positive impact on your loyalty?
Services of Sainsbury
Total No of
Options Responses Responses (in %)
respondents
Strongly
Disagree 11 50 22%
Disagree 2 50 4%
Neutral 2 50 4%
Agree 17 50 34%
44
Mean Median Mode Standard deviation
3.58 4 5 1.55
Table 9: Services of Sainsbury
Figure 12: Services of Sainsbury

The services, which are provided by Sainsbury, are positively influencing the
perceptions of the customers as shown by the responses. The average of 3.58 shows the
positive response against this variable and the mode is also showing strongly agreed answer.
As for the standard deviation, it is important for Sainsbury that the delivery services should
be made more efficient so that the risk factor can be reduced.
Question 10: Do you approve the fact that Sainsbury appreciate the reviews and try
to resolve any issue urgently?
Appreciation of reviews
Total No of
Response
s (in %)
s
Strongly
Disagree 3 50 6%
Disagree 8 50 16%
Neutral 7 50 14%
Agree 14 50 28%
45
Standard
Mean Median Mode
deviation
3.72 4 5 1.28
Table 10: Appreciation of reviews
Figure 13: Appreciation of reviews

Consequently, the appreciation of the reviews have a positive influence on the loyalty
of customers. Table 10 provides the percentages of 28% and 36% towards agree and strongly
agreed responses, showing the optimal views from the participants of the survey.
Furthermore, the mean value is also representing similar results. Although the responses are
promising, it will be feasible for Sainsbury that strategies are designed to overcome this issue.
4.4. Discussion
The following discussion section has been conducted by considering the objectives of
the study. The objectives of the study have been scrutinised on the basis the secondary
evidence collected from previous studies and with the first-hand knowledge in the form of
interview questionnaires.
Objective 1: To examine the effect of price perception on customer loyalty in Sainsbury Plc
The first objective of the study was to examine the effect of price perception on
customer loyalty specific to the case of Sainsbury Plc. It has been discussed in the literature
that the price of the product is perceived as one of the significant factors which impact the
46
perception of the customers to a greater extent (Anuwichanont and Rajabhat, 2011). It is

evident that the majority of the customers while making the retail purchase are cost conscious
at prefer to make a purchase of such a product that is affordable and reasonable. It is notable
that customers of the UK are more inclined towards cost-effective products. It has also been
because of the reason that customers are provided by certain options to acquire more cost-
effective products through online stores. It has also been exaggerated by the research of
Christandl, Fetchenhauer, and Hoelzl, (2011) in which it has been discussed that greater
prices discourage customers as the greater prices of product diversely affect the buying
decision of customers.
The collected responses that have been highlighted in the thematic analysis and the
quantitative analysis also discuss the prices of the products forces customers to incline
towards such products that are cost-effective. It has been discussed that prices of products
become important in a manner that customer while making purchasing can either save the
budget of their daily use products or they can also purchase more products once they are
provided with discounts or less expensive products. To this end, this can be stated that once
customers find discounted and low prices products, there is developed a natural desire for the
customers to make to make habit of purchase from such shops which eventually make them
loyal.
Objective 2: To investigate the impact of perceived service quality on customer loyalty

in Sainsbury Plc
The notion of perceived service quality is also perceived as the one important factor
that influences customer loyalty. The terms service quality has been described in the literature
as the extent of consumer expectation and perception regarding the product to the quality of
the product which a product actually possess (Gorla, Somers and Wong, 2010). Furthermore,
it has also been highlighted in previous studies that the more the service quality is greater, the
more it will impact the perception of consumers. On the basis of the responses collected, it
has been expressed by the majority of responses that when customers get products of their
expected desires, then customers likely prefer to adopt such products on the regular basis.
However, it has also been explained in the study conducted by Udo, Bagchi, and Kirs (2010)
that when customers’ perception regarding the service quality is low, then customers tend to
pursue purchases from other retail stores. It can also be validated from the gathered responses
47
that customers also become selective when it comes to the quality of the products. It has been
because of the reason that customers focus more on examining these two tangible factors that
are price and quality at the time of purchase. It is evident that besides the pricing of products,
there are also significant numbers of potential retail customers whose purchase habits are
significantly influenced by service quality.
Objective 3: To assess the relationship between the customers’ past experience and
customer loyalty in Sainsbury Plc
It has been discussed in the literature that customers past experience are referred to as
the memories of the customer regarding the particular product that either made him satisfied
or dissatisfied with the product. There have been conducted plenty of researches that have
related customer experience with customer service. However, it is important to highlight that
customer experience involves the overall experience of the product that is the time soon the
customer strive for availing the product till the customer does not avail the product and
develops a certain perception regarding the product. It is evident from the responses and
analysis conducted above that customer past experience in terms of efficient service, quality
or any other reason that satisfied customer on the previous experience, enable customers to
make frequent purchases. This can be stated on the basis of the collected analysed responses
that customer past experience either satisfied experience or dissatisfied experience influences
a greater extent to customer loyalty. It has also been stated by Jin (2015), that past experience
of customers regarding the product or service is important as it is the blend of different
concepts and perception which such as quality, service, how the product performed with the
inclusion of prices and other. However, of the customers does not have the good past
experience, then customers will likely to prefer to make a purchase from other sources
besides the source that provided customer bad experience.
Objective 4: To find out the effect of service online reviews on customer loyalty in Sainsbury
Plc
The online service reviews have emerged as the one effective source which is being
used by customers in order to develop their perception regarding the product. The importance
of online reviews is constantly increasing as the customers through the eWOM are
considering the reviews as sincere and honest reviews which online users make after
48
experiencing the product (Kandampully, 2015). It has been discussed in the analysed section
and literature as well that customers’ loyalty is being greatly influenced by these online
reviews. It has been identified that customers are more inclined towards these reviews made
on online channels as the reviews in a brief provide customers view regarding how the
product will and whether the product will satisfy their needs. It has also been suggested by
researchers and is evident from the analysed data; the online review has become the more
effective method of acquiring the correct and authentic information regarding the product
even without using the product. In this regard, this can be stated that online reviews
significantly impact customer loyalty as it provides a better picture of the product or service
and enables customers to easily decide whether the product will be beneficial for the
customer or not.
49
CHAPTER 5: CONCLUSION AND RECOMMENDATIONS
5.1 Introduction
The following chapter is the last chapter of the study that is analysing the impact of
customer perception on customer loyalty for Sainsbury Plc (UK). The following chapter
intends to highlight all the major findings which the researcher has obtained in this particular.
This concluding chapter is important in a manner that the chapter in a brief highlights all the
major findings and assumption which the researcher has acquired in this respective study. In
this particular chapter, the researcher also aims to provide recommendations to Sainsbury
regarding how the businesses can engage more customers and force them to make significant
purchases despite the increased competition within the retail sector of UK. The researcher on
the basis of the findings of this intends to provide meaningful recommendation which
Sainsbury can implement for the increased customer loyalty. Moreover, the researcher
through this chapter also intends to provide recommendations to the future researchers
regarding how the researchers can take benefits from this study for their researches. In the
last of the chapter, the researcher has also highlighted some limitations which this study
possesses. The researcher by highlighting these limitations also provides an opening to the
future researchers in relation to how researchers can further improve this research
phenomenon by increasing the scope of this study.
5.2 Summary
The study that is the impact of consumer perception on customer loyalty has been
conducted with the specific aim to analyse the impact of consumer perception on customer
loyalty. The problem of the study has been answered through the qualitative research design
which directed the researcher to acquire first-hand knowledge in the form of interview
questionnaires. The interviews conducted from the customers allowed the researcher to
conduct the thematic analysis which was done by developing specific themes on the basis of
the research objectives integrated with responses. The researcher also conducted the survey
questionnaire, which was analysed by using the descriptive statistics. On the basis of the
analysed results obtained from both the analysis, this can be stated that consumer perception
influences the customer loyalty of the customers of Sainsbury Plc (UK).
50
The researcher through the secondary findings has identified and discussed several
factors that influence customer loyalty. The four factors that have been identified and have
validated from the primary findings are such as price perception, perceived service, customer
past experience, and the online service reviews. There have been highlighted several
evidences from the previous researchers that have described how the identified factors
influence customer loyalty. In order to validate those secondary evidences, the researcher has
obtained has validated the collected secondary evidences with the primary evidences.
The findings of this study suggest that price perception influences the customer
loyalty of the customers availing products from Sainsbury stores in the UK. This is consistent
with the primary research in which researchers have found that price perception is one of the
most important factors that influence customer’s loyalty. It has been because of the reason
that customers of retail products are more inclined towards cost-effective products. The factor
of price perception has also become more important since the development of online retail
businesses that are providing significantly low prices of products and services. It has been
discussed in the study that retail stores that are providing low cost and affordable retail
products are successful in engaging customers thus maintaining the customer loyalty of their
products. Furthermore, it has also been discussed in the study that customers are more
inclined towards such retail stores that provide affordable products. It is evident from the
analysed results that customers make the habits of availing products from such retails stores
that offer discounts offers and their prices are relatively lower. In this manner, this can be
stated that price perception plays a vitally important role in increasing customer loyalty. This
has been because of the reason that customers’ engagement towards such stores significantly
increases which eventually make a customer loyal from a product.
The findings of the study also suggest that perceived service quality is also the one
important integral component of consumer perception that significantly influences customer
loyalty. It is evident from the analysed responses that perceived service quality is important
for the satisfaction and engaging customers which eventually results in enhancing customer
loyalty. The researcher has found several secondary evidences that have found the
relationship between perceived service quality and customer loyalty. It is evident from the
analysed results that service quality is important for the success of businesses in a manner
that service quality is nothing but the expectations of the customer regarding the product
which a customer develop by recognising the performance of the product. The findings of
this study suggest that perceived service quality is important for different reasons in relation
51
to the development of customer loyalty. It is evident from the study that service quality is
vitally important in engaging customers as customers are beside price perception are also
more inclined towards the quality of products. In this manner, this can be stated that the
factors service quality is important to study while examining customer loyalty.
The finding of the study also suggests that customer experience is also the one
important factor which has a significant influence on customer loyalty. This is consistent with
the primary research in which the researcher has gathered responses from the customers of
Sainsbury (UK). It is evident from the analysed responses collected in relation to past
experience. For instance, it has been expressed by different respondents that why the past
experiences of customers are in either driving or lowering customer loyalty from the
particular brand. The validated analysed responses have suggested that past experience of
customers is important in making the customer loyal from the particular product. It has also
been discussed in the study that positive customer experience functions as the most important
driving force which forces customers to repeat their purchases.
The last factor which was identified by the researcher through the secondary findings
and has been validated with the primary evidence collected for this research is the online
service reviews. The researcher in this study has highlighted the importance of online service
views and describes it as the one important emerging factor which influences the customer
perception to a greater extent. It has been discussed in the study that since the development of
the online channels, the customers have been provided with more effective platforms which
are being effectively used for the purpose of sharing and expressing views regarding product
and services. The study has explained how these different online platforms have provided
assistance to customers in developing their perception about the product even if they have not
utilised the product. The newly developed platforms have allowed customers to easily decide
whether they should avail the product by viewing the reviews of the customers that have
already utilised the product. Moreover, the findings of the research have also suggested that
since the development of these online channels, it has become more important for the
businesses to focus on the quality of products. This has been because of the reason that
customers of today’s era are more influenced through the eWOM. In realization to this, it has
become essential for the businesses as well to focus on predicting and examining the
consumer perception as this has channel has provided a better platform to assess what
customers want and to produce or improved the products accordingly in order to enhance the
level of customer loyalty.
52
5.3 Recommendations
The researcher in this study has conducted a detailed and in-depth analysis in relation
to examine customer perception of Sainsbury’s PLC and how it influences their loyalty. The
researcher to this has obtained several meaningful evidences and have scrutinised the
problem from different aspects. Therefore, on the basis of the obtained results, the researcher
aims to provide meaningful recommendations to Sainsbury PLC (UK) through which an
organisation can better strive to examine and understand its consumer perception meanwhile,
implementing those measures that can enhance the consumer loyalty of its products.
 It is recommended to the Sainsbury to focus on providing products at relatively lower

prices. It is evident that Sainsbury is already providing products at reasonable prices.
However, there is still a need to further lower its prices or by either introducing
discounts offers so that customers can develop positive perception on its pricing
strategies which can eventually enable Sainsbury to enhance its customer loyalty.
 It is also recommended to Sainsbury to improve its service quality by different means.
It is accepted that Sainsbury provides health and fresh products and other quality
products used in daily life. However, the increased competition in the retail sector and
the development of numerous online stores is forcing the retail business within the
UK to add more efficiency in their business processes. In realsiation to this, it is
recommended to Sainsbury to focus improved processes in terms of technology
advancement in its supply chain, logistics or in advertising and brandings so that
customers can be more engaged in making frequent purchases from Sainsbury. This
will consequently enable Sainsbury to increase its customer loyalty.
 It is also recommended to Sainsbury to pay more attention to its online channel. The
reason for this is that consumer behaviour regarding the retail products is constantly
changing and the consumers of today’s world are more inclined towards the use
online for making purchases and for the purpose of expressing their views regarding
the product performance through eWOM. In realization of this, it is recommended to
the Sainsbury to make good use of the responses that are expressed by its customers
in its online channel. This will allow Sainsbury to work on its weaknesses and will
enable the company to provide better and improved products so that customer’s
loyalty of its customers can be increased.
53
 To the academicians and researchers, it is also recommended to further improve this

research context by either increase the sample size of the respondents or by adding
more variables within the research phenomenon to better understand the concept and
relation between consumer perception and customer loyalty.
5.4 Limitations of the Study

Even though the researcher has tried to conduct this research work in the best possible
manner however, there are still some of the limitations which this study possesses. For
instance, the researcher in this study has dependent on the qualitative and quantitative
evidence collected by taking interviews and survey from the customers. However, the
inclusion of other factors may further add variation to the results. Moreover, by providing
interview questionnaires the researcher will be able to better understand the relationship
between the two variables and could better analyse the impact of the individual factors on the
dependent variable. The researcher while taking interviews have relied on the smaller sample
size that is just managed to conduct interviews from 15 customers. For survey, it was only 50.
Since the availability of the customers visiting Sainsbury would be a problem for the
researcher and this sample size could have also been increased. Therefore, this can be stated
that smaller sample size is also the one important limitation of the study which the future
researchers should focus on.
54
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Appendix
Interview Questions
1. Do you think that price of the products can incline customers towards purchasing
from the same brand? If yes, please explain why?
2. How do you perceive the brand as if they are providing efficient services to their
customers?
3. Do you think that service quality is important for the customers? Please comment on
it.
4. Please comment, if the brand is not able to ensure better customer experience, would
you still want to buy from the same brand?
5. Positive past customer experiences are highly important for making frequent
purchases from the same brand. Do you agree, if yes, then why?
6. How much online service reviews can impact your purchase decision from the same
brand?
63

Impact of Consumer Perception On Customer Loyalty in Sainsbury PLC (United Kingdom)

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IMPACT OF CONSUMER PERCEPTION ON CUSTOMER LOYALTY IN

SAINSBURY PLC (UNITED KINGDOM)

CHAPTER TWO: LITERATURE REVIEW

2.2 Significance of Customer Loyalty

2.3 Conceptualization of Consumer Perception

2.4 Factors associated with Customer Perception

2.4.1 Price Perception

2.4.2 Perceived service quality

2.4.3 Customer experience

2.4.4 Online service reviews

Figure 3.1 Different online Reviews channels and their Rating

Source: Trackers (2019)

2.5 Impact of price perception on Customer Loyalty

2.6 Impact of perceived service quality on customer loyalty

2.7 Relationship between customer past experiences and customer loyalty

However, improving consumer experience is significant for consumer loyalty as well

2.8 Effect of service online reviews on customer loyalty

2.9 Conceptual Framework

Figure 1: Conceptual Framework

2.10 Theoretical Framework

2.10.1 Theory of Reasoned Action

2.10.2 Expected-Value Theory

Figure 3.2Research paradigm based on Saunders et al. (2012)

3.2. Saunder’s Onion Model

3.2.1. Research Philosophy

In order to further understand the concepts of the research, it is important to

philosophy of positivism is highly regarded to negate an individual's opinions and detailed

On the other hand, interpretivism is regarded to be the complete opposite of

The third type of research philosophy is pragmatism which is considered to be a

3.2.3. Research Approaches

3.2.3. Research Strategy

The semi-structured interrogative interviews questions allow respondents to provide complete

3.2.4. Research Choices

3.2.5. Time Horizons

Figure 3.3: Time Horizon

3.2.6. Techniques and Procedures, and Research Instruments

3.2.6.1. Data Sources

3.2.6.2. Research Sampling

3.3. Data Analysis

3.4. Research Ethics

3.5. Research Limitations

CHAPTER FOUR: DATA ANALYSIS

4.2. Thematic Analysis

4.2.1. Price Perception and its Impact on Customer loyalty

Another respondent said,

Another respondent highlighted a very important point,

Another respondent highlighted,

One of the respondents also highlighted,

With respect to the above-mentioned responses, it can be stated that perceptions

4.2.3. Importance of Service Quality for Customers

Another respondent highlighted,

4.2.4. Perception of Customer Experience and Customer Loyalty

Another respondent highlighted,

One of the respondents also highlighted,

4.2.5. Important of Past Customer Experiences for Customers’ Frequent Purchases

Another respondent highlighted a very important point,

Another respondent highlighted,

Another respondent highlighted,

Another respondent highlighted a very important point,

One of the respondents also highlighted

“There are lots of communication network that brings socialization at it best

4.3. Quantitative Analysis