Investigation into key drivers of customer loyalty of independent coffee shops in the London coffee shop market

Abstract

2018 dissertation for MSc. International Business Management. Selected by academic staff as a good example of a masters level dissertation. In today’s highly saturated and competitive markets, customer loyalty emerges as one of the most important challenges faced by marketers. London’s independent coffee shop market can be identified as one of such complex business environments, where customers are often variety seeking and multi-brand loyal, which raises the question of how independent coffee shops can survive in such a competitive marketplace. This study aims to answer this question through the investigation of key drivers of customer loyalty of independent coffee shops in London’s coffee shop market. This study aims to examine the different groups of loyal customers in the coffee shop market, by examining the drivers and consequences of their loyal behaviours and attitudes, and by establishing the effect of relationship marketing strategies, such as loyalty programmes, on customer loyalty. This study follows the positivist research philosophy and uses the quantitative research methodology for data collection. Data was collected using a self-administered questionnaire and analysed using a combination of quantitative data analysis strategies, including bivariate correlation analysis and multivariate analysis of variance. The research findings showed three distinctive groups of loyal customers in the independent coffee shop market, where levels of attitudes and behaviours displayed differ significantly between the groups. The study also identified that both functional and emotional drivers impact independent coffee shop customers’ loyalty, which then further significantly influences their post-purchase behaviour. The results of the study also showed that relationship marketing strategies have a weak effect on customers’ repeat-purchase loyalty. Based on these research findings, the study was then able to recommend the best practices in loyalty-building strategies for independent coffee shop managers.