Applied Innovations in Industrial Management, Vol. 1, No.

1, (2021), 26-35

Applied Innovations in Industrial Management

Journal homepage: https://iscihub.com/index.php/AIIM

The effect of the retail store manager on creating customer loyalty

about the role of brand name in handwoven carpet stores
Azam Hajiaghajania, Maryam Rahmatya,*
a
Management Department, Chalous Branch of Islamic Azad Univercity, Chalous, Iran

Abstract

The purpose of the present research is to determine the effect of the retail store manager on creating customer loyalty concerning the
mediating role of the brand relationship in handmade carpet stores. The statistical sample of this research with the help of Morgan's
table includes 360 employees and 196 customers of the above stores. To check the reliability of the research questionnaires,
Cronbach's alpha coefficient was used with coefficients of 0.810, 0.936, and 0.852, respectively, and confirmatory factor analysis
was used to check their validity. The results using the structural equation modeling method with the help of LISREL software
indicate that the retail store manager has a positive and significant effect on creating customer loyalty both directly and with the
mediating role of the brand relationship. According to the results of the research, it is suggested that customer loyalty can be
improved by creating a suitable management unit in handwoven carpet stores and creating a suitable brand name.

Keywords: Retail store manager; Customer loyalty; Brand relationship.

1. Introduction

Customer loyalty is defined as a deep commitment to buy again or to become a customer to buy products and services
that the customer likes so that they will be repeated continuously in the future. Marketing to change his buying behavior,
don't buy [1]. Loyal customers are more likely than other customers to turn to word-of-mouth advertising and spend
more money on certain services. In addition, loyal customers require less service costs, because they know the products
and services well and need less information [2]. Customer loyalty has a great influence on managers' thinking. Meeting
and anticipating customer needs is the most important source of competitive advantage for companies [3].
The retail store manager, considering the key role in operationalizing the retail strategy through the behaviors and
attitudes that are instilled in the employees, is very important for the more effective performance of a company [4]. Due
to the emergence and creation of a new structure and new technology in the field of retail and stores, the intensity of
competition among them is increasing. The retail industry in the form of chain stores is one of the most important
industries for the supply chain of any industrial and manufacturing company, especially in the field of consumer goods.
One of the characteristics of the current environment of this industry is its increasing competition. The direct result of
this situation is the necessity and serious attention to using effective mechanisms to maintain and improve customer
satisfaction [5].

*
Corresponding author.
E-mail address: rahmaty.maryam61@gmail.com

Received 12 Januarry 2021; Received in revised form 18 February 2021; Accepted 25 February 2021.
 26 A. Hajiaghajani and M. Rahmaty/ Applied Innovations in Industrial Management 1-1(2021) 26-35

Brand relationship develops from a long-term strategic assessment for retail companies that may be required to help
with consumer relationship issues such as consumer retention and profitable consumer behaviors. The brand name is a
suitable signaling tool because the existing consumers recognize that the commitment of the brand can act strongly by
receiving the guarantee and commitment provided by the company [6]. The brand name for the product can have an
effect on the positioning of the product in the market, and this in turn can have an effect on the success rate of the
product and gaining more market share [7]. Due to the interactive nature of retail contexts, the retail manager plays an
important role in creating a positive customer experience and understanding of the brand relationship. The behavior of
the retail manager affects the customer's attitude toward the store's brand by increasing customer satisfaction, which can
increase customer loyalty [4]. Handmade carpets, especially in the east regions of Iran, have an international brand,
although according to the local carpet weavers, every year in the corners of this country, several carpet hangers are
pulled down and the doors of collective carpet weaving workshops are closed, and the skilled craftsmen of this local art
are employed in other jobs. they turn It is hoped that by creating proper management in the retail stores of handwoven
carpets in this area and creating a suitable brand, it is possible to improve the loyalty and satisfaction of customers so
that this industry does not face destruction. Customer loyalty is based on the mediating role of the brand in handwoven
carpet stores.

2. Literature review

2.1. Retail store manager

Retail store management is one of the ways to supply goods in the way of consumption. Today, retail stores have a
growing trend and have influenced the competitive market. Every business needs change to grow and succeed. In order
to develop and expand quickly and correctly, retailers are looking for new business territories and to achieve this goal,
they must use appropriate and efficient strategies according to the needs and structure of Iranian markets [8]. Retail store
managers, considering their key role in operationalizing the retail strategy through the behaviors and attitudes that are
instilled in the employees, are very important for the more effective performance of a company [4]. Due to the
emergence and creation of a new structure and new technology in the field of retail and stores, the intensity of
competition among them is increasing.
The retail industry in the form of chain stores is one of the most important industries for the supply chain of any
industrial and manufacturing company, especially in the field of consumer goods. One of the characteristics of the
current environment of this industry is its increasing competition. The direct result of this situation is the necessity and
serious attention in using effective mechanisms to maintain and improve customer satisfaction [5].The retail store
manager plays the most important role in the store. This person maintains the culture of the business, protects the brand
name, inspires the employees and cares for the customer. Appropriate and strategic location for retail stores is of
particular importance, which should be determined by the manager of the retail store [4].
The demands of retail stores are shaping new plans for the combined use of urban centers and adapting to the
conditions of today's world, which is a very challenging task because retail and new urbanism have mutual effects on
each other. Thus, in many new urban communities, retail stores have played a significant role in creating more complete
neighborhoods and selling residential houses faster, and modern urban planning has provided retailers with new methods
for planning and development [9].
The retail industry in the form of chain stores is one of the most important industries affecting the supply chain of any
industrial and manufacturing company, especially in the field of consumer goods, and one of the most important features
of the current environment of this industry is the increasing competition that can be seen every day with the emergence
and development of new competitors in this industry.
The direct result of this situation is the necessity and serious attention to the use of effective mechanisms in
maintaining and improving customer satisfaction and, accordingly, sales through improving the quality of services and
 27 A. Hajiaghajani and M. Rahmaty/ Applied Innovations in Industrial Management 1-1(2021) 26-35

value. It is more creative for customers, considering the increase of competition in the retail market and the emergence
of chain stores and supermarkets in the last few years, it is very necessary to review and analyze the status of chain
stores and predict the status of old and new competitors [10].

2.2. Costumer loyalty

Since in today's competitive world, the business environment has changed from product-oriented to customer-
oriented, understanding customer behavior has become more important, and one of the most important challenges in
customer-oriented organizations is knowing customers and understanding their differences. With the trend of companies
towards customer orientation, certain complications have appeared in customer relationship management. One of these
issues is customer loyalty. The higher costs of attracting new customers compared to the costs of maintaining existing
customers lead businesses to devote their limited resources to maintaining their current and key customers instead of
spending on acquiring new customers. For this reason, designing and implementing loyalty programs is one of the topics
that organizations have become interested in [11].
Larson and Solana believe that loyalty is creating a commitment in the customer to do business with a particular
organization and buy goods and services repeatedly. Assail defines loyalty as a behavior towards a brand; Therefore, this
leads to continuous purchase of that brand. Jacoby and Chestnut show the psychological meaning of loyalty in an
attempt to distinguish it from behavioral definitions (repeat buying). Their analysis shows that continued purchase is
worthless as an indicator of loyalty. That's because of the shopping method and priority of convenience and the fact that
if consumers remain loyal to several brands, continuous purchases can mask loyalty. Past and present loyalty is defined
as the frequency of repeated purchases or the relative volume of purchases from a brand. Much of the existing literature
in this field is concerned with what the customer does and less with the psychological meaning of loyalty. Loyalty
includes a psychological process that includes the evaluation of different options based on different criteria [12].
Loyalty occurs when the consumer shows a strong preference for the supplier and the rate of repurchases is always
high. In order to have customer loyalty, the presence of both conditions is necessary at the same time. In fake loyalty,
the rate of customer repeat purchases is high, but the customer has a weak tendency towards the supplier. In hidden
loyalty, the customer has a relatively strong tendency towards the product and may be associated with his few purchases
or no purchases. Lack of loyalty is when the customer has a relatively weak attitude towards the supplier and rarely buys
from the supplier [13].

2.3. Brand relationship

Brand relationship is defined as trustworthiness, commitments and goals of an organization, which has two main
components of trust and expertise. This means that, from the point of view of consumers, the brand has the expertise and
desire to continuously provide what it has promised in its controlled and uncontrolled communications [14]. The
customer's perception of the credibility of the organization has a direct effect on his satisfaction and emotional
commitment towards the organization. The brand relationship shows the level of customer trust in the organization's
expertise and ability to fulfill its obligations and provide services that meet the needs of customers [15].
Brand registration in the minds of consumers is one of the methods that successful brands use to create strong
relationships and retain customers. The brand relationship is the credibility of information about the position of products
in the eyes of consumers, which are placed under the name of the brand. This issue depends on the consumer's
perception of whether the brand has the ability and desire to continuously provide the promised products or not [16].
The brand relationship is related to the trustworthiness and believability, the ability and expertise of the brand to
deliver and do whatever is promised. A brand name and brand carries a lot of dignity and credibility, in other words, the
credibility of the name is related to the credibility and expertise of the name in delivering what it promises. This
conceptualization shows that the customer can have a relationship with the name and the name communicates with the
 28 A. Hajiaghajani and M. Rahmaty/ Applied Innovations in Industrial Management 1-1(2021) 26-35

customer in such a way that the validity of the name is the set of name-consumer and consumer-name relationships over
time [17].
The brand relationship measures the value and acceptability of the organization's brand based on the individual's
perception of the organization's expertise, the organization's reliability and its desirability. In other words, the brand
relationship shows the customer's judgments about the organization hidden behind the brand [18]. A brand relationship
reduces perceived risk because it increases consumer confidence in a company's product claims. Credibility also reduces
information costs, because consumers may use authentic brands as a source of knowledge to save on information
collection and processing costs [19].
Brand relationship is a name, phrase, design, sign or a combination of these elements that determines the identity of a
service organization and differentiates it from other competitors and is judged by customers' intellect, logic, senses and
emotions. Also, creating a sense of comfort is planned as the role of a brand, because the brand defines the personality,
lifestyle, ideals and behavior of customers [4].
Branding is developed from a strategic and long-term assessment for retail companies that may be called upon to help
with consumer relationship issues such as consumer retention and profitable consumer behaviors. Within the scope of
the research, we require structured, long-term service relationships that are demanded by consumers. Such relationships
tend to last years; But it is characterized by a relatively low level of relationship between companies and consumers. The
company has an incentive to compensate for distrust by offering their willingness to provide a service commitment that
they will consume.

2.4. Research Background

In 1400, Yamqani et al in a research identified and prioritized factors affecting retail chain stores using geomarketing.
The analytical method used in this article is a combination of fuzzy Delphi method and hierarchical analysis. The
statistical population of this research includes the experts of the retail industry in Iran in 2018. In this research, in the
first part, while explaining the need to address the issue of locating retail stores and the necessity of locating these
centers, it has been explained. In the next section, the most important elements and components of the location of retail
stores are presented. The results indicate that the main effective factors for the optimal location of retail stores in order
of importance are: population structure, characteristics of the commercial area and customers; competition conditions;
ease of access to the store; Location/physical characteristics of the store; economic factors of customers; attractiveness
of the market; Performance Indicators; Determining the cost of the store/economic invoice; the attractiveness of the
location for the store; saturation level. Also, there was a significant difference between the scores of men and women in
the variables of retail manager, ease of use, customer loyalty and reliability.
It was investigated the effect of a retail store manager on the development of employee brand relationship, service
performance, and customer loyalty in South Korea [4]. Data were collected from three sources including store managers,
employees and customers operating in the properties of a large retail management company in South Korea. The results
showed that the quality of the leader-member exchange has a significant effect on the brand relationship, that is, the
level of familiarity of managers with the brand at the beginning of the process (internal brand) should begin with the
transfer of information related to the brand from the organization (manager) to the employee.
Moreovere, the manager's brand knowledge moderates this relationship; That is, by increasing the manager's brand
knowledge, the positive effect of the high quality of the leader-member exchange on the brand relationship is
strengthened. Brand relationship has a positive effect on salesperson service performance, and the positive effect of
brand relationship on salesperson service performance becomes stronger when strategic knowledge diffusion in the store
is high. The data collection tool was also a questionnaire. The results of the research showed that marketing activities of
retail managers and brand equity have a positive effect on recommended advertising and customer commitment.
 29 A. Hajiaghajani and M. Rahmaty/ Applied Innovations in Industrial Management 1-1(2021) 26-35

Malik and Ahmad [20], conducted a research on the effect of brand relationship on customer loyalty (case study:
Faculty of Agriculture in Pakistan). The studied population includes confidence (for students and employees of the
Faculty of Agriculture). Different statistical methods such as factor loading (as a data reduction method), analysis and
analysis of the ability to check accuracy among different questions of a variable, descriptive statistics (to check the
central tendency), correlation analysis (to check the relationship between variables) and regression analysis including
model summary and analysis of variance (to check the cause and effect relationship between variables) were used. The
results showed that the brand has a significant effect on customer loyalty.
According to the review of internal and external research conducted on the desired variables, the conceptual model of
the research includes the retail store manager, customer loyalty and brand name, which is presented in Figure 1. This
figure shows the overall picture of the relationships between the hypotheses examined in this research and the
relationships between the retail store manager, customer loyalty, and the brand. This conceptual framework considers
the central role of the brand as an effectiveness-enhancing mechanism that facilitates the link between the retail store
manager and customer loyalty. In this model, the variables are considered based on the model of Jung et al. [4].

Brand
relationship

Costumer Retail store

loyalty manager

Fig. 1. Conceptual model of research.

In this way, by designing a conceptual model, research hypotheses are formulated as follows:
1) The retail store manager is effective in creating customer loyalty due to the mediating role of the brand relationship
in local handmade carpet stores.
2) The manager of the retail store has an effect on creating customer loyalty in the handmade carpet stores.
3) The retail store manager has an impact on the brand relationship.
4) Brand name has an effect on customer loyalty in local carpet stores.

3. Sample and research method

To test the research model, structural equation modeling method with confirmatory factor analysis approach has been
used. Structural equation modeling consists of two parts: measurement model and structural model, and the variables of
the model are divided into hidden and manifest variables. The section of the measurement model includes questions
(items) of each dimension and the relationships between questions and dimensions are analyzed in this section. The
structural model section also contains all the structures mentioned in the main model of the research, and the degree of
correlation of the structures and the relationships between them is the focus in this part; Therefore, the current research
is applied in terms of classification based on the purpose and descriptive in terms of implementation method.
 30 A. Hajiaghajani and M. Rahmaty/ Applied Innovations in Industrial Management 1-1(2021) 26-35

Two research samples have been used to collect information. The first part includes the employees of the local
handmade carpet stores, whose number according to the collected information is 360 people who answered the retail
store manager's questionnaire, and the second part includes the customers of handwoven carpet stores, who are
considered a large and unlimited statistical population and answered the questionnaire of customer loyalty and brand
relationship. To distribute the questionnaire among employees, a random sampling method with proportional allocation
was used with the help of Morgan's table.
According to Morgan's table, at least 186 employees must answer the questionnaire of the retail store manager. In this
research, due to the equalization of the statistical sample of the two studied communities (customers and employees),
196 questionnaires were distributed among the employees.
Cochran's formula was used to determine the sample size from the second part of the statistical population
(customers), and therefore, since customers are considered a large and unlimited population, Cochran's formula for the
unlimited population with an error value of 0.07 is equal to 196 people, and the questionnaire was distributed among
them by two-stage cluster sampling method. (196 questionnaires in 51 branches in seven cities).

Table 1. Number of population and statistical sample

The number of … in City 1 City 2 City 3 City 4 City 5 City 6 City 7
each city (8 stores) (5 stores) (8 stores) (7 stores) (6 stores) (5 stores) (12 stores)
employees of
handmade carpet 58 45 62 49 46 28 62
stores
questionnaires
distributed among 32 24 34 27 25 21 33
employees
questionnaires
distributed to 30 19 30 27 23 22 45
customers

In the present study, the standard questionnaire of Jung et al. [4] was used, which measures the effect of the retail
store manager on customer loyalty by considering the brand relationship. The number of questions, measurement items
and Cronbach's alpha to determine the reliability of the questionnaire are presented in Table 2.

Table 2. Classification of research components and questions related to each component

Variable Question related to each component Variable type Cronbach's alpha
Retail store manager Items 1 to 11 of the questionnaire Independent 0.810
High quality leader-member exchange Items 1 to 7 of the questionnaire Independent 0.839
Manager's brand knowledge Items 8 to 11 of the questionnaire Independent 0.780
Costumer loyalty Items 12 to 14 of the questionnaire Dependent 0.936
Brand relationship Items 15 to 17 of the questionnaire mediator 0.852

Also, in this research, the convergent construct validity technique was used to check the validity of the questionnaire
in the research. For this purpose, the confirmatory factor analysis technique (using Lisrel software) was used, and the
results are presented in Table 3.
 31 A. Hajiaghajani and M. Rahmaty/ Applied Innovations in Industrial Management 1-1(2021) 26-35

Table 3. The results of s-convergent validity of the research questionnaire

Items/indica Factor meaningfulness of Mean variance

Structure Structure-convergent validity
tors load factor loading extracted

Item 1 0.54 Meaningful

Item 2 0.52 Meaningful
High quality leader- Item 3 0.82 Meaningful 0.53
member exchange Item 4 0.84 Meaningful
Item 5 0.76 Meaningful
Item 6 0.84 Meaningful
Item 7 0.71 Meaningful
Item 8 0.51 Meaningful
Manager's brand Validation of Structure-
Item 9 0.63 Meaningful
knowledge 0.468 convergent validity
Item 10 0.80 Meaningful
Item 11 0.76 Meaningful
Item 12 0.86 Meaningful
Costumer loyalty
Item 13 0.89 Meaningful
0.69
Item 14 0.74 Meaningful
Item 15 0.77 Meaningful
Brand relationship Item 16 0.90 Meaningful 0.67
Item 17 0.78 Meaningful

4. Results and discussion

In order to analyze the research data, first the assumption of normality of the data is checked with the help of
Kolmogorov-Smirnov test. Then, in order to test the hypotheses of the research, the path analysis test is conducted using
LISREL software.

Table 4. Kolmogorov-Smirnov test of research data

Variables The meaningdulness level Z Kolmogorov-Smirnov Test result
High quality leader-member exchange 0.081 1.266 normal
Manager's brand knowledge 0.057 1.333 normal
Retail store manager 0.225 1.045 normal
Costumer loyalty 0.101 1.225 normal
Brand relationship 0.074 1.284 normal

According to the table above, the significance level of all research variables is greater than 0.05. Therefore, it is
concluded that the desired variables follow the normal distribution. Also, in order to fit the structural model of the main
hypothesis of the research, a number of goodness of fit indices have been used. One of the general indices is the chi-
square index, which is calculated by dividing the chi-square by the degree of freedom of the model. If this value is
between 1 and 5, it is desirable.

𝑋2 39.82
= = 3.6 (1)
𝑑𝑓 11
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The fit indices can include indices such as CFI, NFI, NNFI and IFI, if most of these indices are higher than 0.9, the
model has a good fit.

Table 5. The final research model

Fitness function 𝑿𝟐 ⁄𝒅𝒇 CFI NFI NNFI IFI GFI
Acceptable values <5 >0. 9 >0. 9 >0. 9 >0. 9 >0. 9
Calculated values 3.6 0. 98 0. 97 0. 97 0. 98 0. 97

According to Table 5, because all the fit indices are above 0.9, the model has a good fit. In order to check the
acceptability of the value of the path coefficient, the t-test is used. In the t-test, the assumption of zero is expressed as
follows: the parameter (path coefficient) in the target population is not significantly different from zero, or the path
coefficient in the target population is equal to zero. If the value of t is between 1.96 and -1.96, it shows that the
parameter obtained at the 0.05 level is not significantly different from zero and of course cannot explain the changes in
the dependent variable. If the value of t is not in this range, that is, it is larger or smaller, it means that at the significance
level of 0.05, the amount of the obtained parameter (path coefficient) is different from zero, and of course it can explain
the changes in the dependent variable; Therefore, the null hypothesis is rejected. Table 6 shows the results of the
research hypotheses.

Table 6. Path coefficients and t-test statistics

Direction The value of the t
The coefficient value Test result
statistic
Retail Store Manager → Brand Relationship → Customer Loyalty 0.24 4.29 confirmation
Retail Store Manager → Customer Loyalty 0.19 2.00 confirmation
Retail Store Manager → Brand Relationship 0.47 4.44 confirmation
Brand Relationship → Customer Loyalty 0.51 4.32 confirmation

Fig. 2. The t-value statistics of the results of confirming the final model of the relationship between the main components of the research
 33 A. Hajiaghajani and M. Rahmaty/ Applied Innovations in Industrial Management 1-1(2021) 26-35

Fig. 3. The results of confirming the final model of the relationship between the main components of the research

5. Conclusion

This research was conducted with the aim of determining the effect of the retail store manager on creating customer
loyalty with regard to the mediating role of the brand relationship in the local handmade carpet stores.In order to achieve
this goal, after checking the validity and reliability of the questionnaire, the normality test of the research data was
conducted, which showed that the research data follow the normal distribution. In order to analyze the data and test the
hypotheses, the method of structural equations was used. According to the values obtained for the path coefficient and t-
statistic, the first hypothesis was confirmed at the confidence level of 99%, and it was concluded that the manager of the
retail store has a positive and significant effect of 24% in creating customer loyalty with regard to the mediating role of
the brand relationship in the handwoven carpet. In fact, it can be said that due to the interactive nature of the retail
environment, the retail manager plays an important role in creating a positive customer experience and understanding
the brand relationship. The behavior of the retail manager affects the customer's attitude towards the store's brand
through increasing customer satisfaction, which can lead to the growth of customer loyalty. The second hypothesis states
that the manager of the retail store has a positive and significant effect of 19% in creating customer loyalty in the
handwoven carpet stores. In fact, it can be said that the retail store manager plays the most important role in the store.
This person maintains the culture of the business, protects the brand name, inspires the employees and cares for the
customer. Appropriate and strategic location for retail stores is of particular importance, which should be determined by
the manager of the retail store. The findings obtained from this hypothesis are consistent with the research results of
Jung et al. [4] and Esmaili and Taheri [21]. The results of these studies showed that there is a positive and significant
relationship between retail managers and the variable of customer loyalty. The third hypothesis also shows that the
manager of the retail store has a positive and significant effect on the brand relationship. The fourth hypothesis is
proposed as follows: brand name has an effect on creating customer loyalty in the handmade carpet stores. This
hypothesis was confirmed. In fact, it can be said that the brand name at the beginning of the process (internal brand
name) should start with the transfer of information related to the brand name from the organization (manager) to the
employee, which promotes customer loyalty. The findings obtained from this hypothesis are consistent with the research
results of Malik and Ahmad [20]. The result of this study shows. Brand has a significant impact on customer loyalty.
 34 A. Hajiaghajani and M. Rahmaty/ Applied Innovations in Industrial Management 1-1(2021) 26-35

Funding

This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.

Conflicts of Interest

The authors declare no conflict of interest related to this publication.

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