1

The effects of purchase orientations on perceived

loyalty programmes’ benefits and loyalty

Abstract

Purpose – This article dwells on theoretical, managerial, and

empirical knowledge to improve loyalty programme efficiency. We try

to understand how economic, hedonist, relational, convenience,

informational rewards enhance or undermine customers' perceived

programme benefits as well as subsequently loyalty according

individual shopping orientations (economical, hedonist, social-

relational, apathetic, brand/loyal).

Design/methodology/approach – The research uses self-

determination theory (SDT) and purchase orientations to classify types

of rewards in terms of their effect on perceived programme benefits

and loyalty. Scales are developed through exploratory and

confirmatory factor analysis. To validate the hypotheses, surveys in

two retail chains (grocery/perfumery) are used. Structural equation

modelling confirms the research model.

Findings –Perceived benefits and loyalty vary according to

purchase orientations, in line with the SDT. Intrinsic (extrinsic) rewards

motivate customers to act to obtain a benefit within (apart from) the

target of their purchase orientation and influences loyalty positively

(have low impact on loyalty).

2

Research limitations/implications – Further testing of reward

types, in(ex)trinsic motivation, across multiple contexts is necessary

for validity enhancement as it remains challenging to categorize

purchase orientations and rewards. It is necessary to precisely define

the degree of the relationship among an intrinsic purchase orientation

and perceived loyalty programmes' benefits as orientations might be

multidimensional.

Practical implications – Differentiation through tailored rewards

is necessary in markets with strong competition to appeal to different

segments. Differentiation could be achieved through nonmonetary

benefits. The principal role of loyalty programmes should be to identify

and segment customers as a means to improve resource allocations.

Originality/value – This is one of the pioneer articles in the use

of SDT in marketing research. SDT provides a multi-benefit framework

which identifies the different (non-) monetary rewards customers may

value (in)extrinsically when participating in loyalty programmes. The

development of scales which focus on rewards and the impact of

purchase orientations on loyalty programmes’ perceived benefits is

another contribution.

Keywords Loyalty programmes, rewards, self-determination

theory, purchase orientations, scale development.

Paper type Research Paper

3

Lars Meyer-Waarden, EM Strasbourg Business School, Humans

and Management in Society Institute (EA 1347), E-Mail:

meyerwaarden@em-strasbourg.eu, is a Professor at the EM

Strasbourg Business School (Humans and Management in Society

Institute, EA 1347) and the Center of Research in Management

Toulouse (EAC CNRS 5032). His main research interests are Customer

Relationship Management as well as Retailing Management.

Christophe Benavent, University Paris X, CEROS Institute. E-Mail:

christophe.benavent@gmail.com, is a Professor at the University Paris

X. His main research interests are Customer Relationship Management

as well as Social Media Marketing. He has published lots of articles

about these issues in international journals as Journal of the Academy

of Marketing Science and Journal of Marketing Management.

Herbert Castéran, Ecole de Management, Strasbourg University,

Humans and Management in Society Institute (EA 1347). E-Mail:

herbert.casteran@gmail.com, is an Associate-Professor at the EM

Strasbourg Business School. His main research interests are Marketing

models and Customer Lifetime Value modelling.

4

Introduction

Many firms use customer relationship management instruments, in

which loyalty or frequency reward programmes represent key

marketing activities. For example, the French grocery retailer Carrefour

devotes approximately €80 million of its annual marketing

expenditures to managing its loyalty program. Furthermore, the

popularity of these programmes is evident in the number of

participants: 55% of the U.S. population, 81% of Canadians, 85% of

U.K. consumers, and 90% of French customers are enrolled in at least

one relational programme (Meyer-Waarden and Benavent, 2009).

Yet despite their prominence in the marketing mix and in

customers’ wallets, the benefits of loyalty cards remain uncertain.

Many researchers argue that in a competitive market, good loyalty

programmes simply get imitated, which means that the market

eventually returns to stasis, but with increased marketing costs—a

highly inefficient situation (Dowling and Uncles, 1997; Sharp and

Sharp, 1997; Leenheer et al., 2007; Liu, 2007; Meyer-Waarden, 2007;

Meyer-Waarden and Benavent, 2009; Cedrola and Memmo, 2010).

Furthermore, those researchers argue that the rewards commonly

provided in association with such programmes might not change

consumers’ motivations or behavioural patterns effectively. Yet little

research investigates customer perceptions on programme rewards

5

(Bridson et al., 2008; Mimouni-Chaabane and Volle, 2010; Meyer-

Waarden, 2013), even if studies suggest that loyalty programme

effectiveness depends on the design of those rewards (Kivetz and

Simonson, 2002; Yi and Jeon, 2003; Kivetz, 2005; Kivetz et al. 2006;

Demoulin and Zidda, 2008; Smith and Sparks, 2009a; Bagchi and Li,

2011; Drèze and Nunes, 2011).

This article therefore dwells on theoretical, managerial, and

empirical knowledge in order to improve loyalty programme efficiency

and differentiation. We try to understand how economic, hedonist,

relational, convenience, informational rewards enhance or undermine

customers' perceived programme benefits as well as subsequently

loyalty according individual shopping orientations (economical,

hedonist, social-relational, apathetic, brand/loyal). We first develop a

typology describing the relationships between individual shopping

orientations, rewards and the different levels of customers' perceived

programme benefits as well as loyalty. We provide a multi-benefit

conceptual framework, based on the self-determination theory (Deci,

1971; Deci and Ryan, 1985), as well as the purchase orientation

theory (Stone, 1954; Moschis, 1976), which identifies the different

monetary and non-monetary rewards customers may value when

participating in loyalty programmes. As one of our main theoretical

contributions, we introduce the concept of intrinsic and extrinsic

6

motivation into the discussion about rewards’ benefits, because we

posit that intrinsic or extrinsic motivation may be contingent on

customer heterogeneity and individual purchase motivations.

Accordingly, we develop conclusions pertaining to how differentiated

rewards, moderated by (ex)intrinsic consumer purchase orientations,

affect perceived loyalty programme benefits and loyalty. Intrinsic

(extrinsic) rewards motivate customers to act to obtain a benefit within

(apart from) the target of their purchase orientation and influences

loyalty positively (have low impact on loyalty). For example for

economical shoppers who are most motivated (intrinsically) by budget

optimizing economic rewards influence strongly loyalty intentions.

However, recognition and social relationships, hedonist, as well as

convenience rewards are extrinsic and have no impact on loyalty

intentions.

The ability to measure the perceived benefits of these rewards

offers researchers and managers a better capacity to study the

behavioural impacts of loyalty programmes. We secondly demonstrate

that the common belief stipulating that intrinsic rewards are not

material and extrinsic ones are, does not necessarily hold (Deci and

Ryan, 2000). For one customer, an intrinsic reward can be material or

immaterial and intrinsically motivating, depending on the purchasing

situation. Finally, our findings contribute to a better loyalty programme

7

management by recommending customer portfolio segmentation

through purchase orientations in order to target diverse (non)-

monetary rewards more accurately.

In this article we first present our conceptual framework and

hypotheses. Then the methodology and empirical investigation in

French grocery and perfumery chains are explained. We then present

the results, and finally, we discuss the theory development

implications, weaknesses and some further research directions.

Conceptual framework

We require a better understanding of how rewards influence

perceived benefits, and then affect loyalty. Therefore, we define the

concepts clearly and turn to theories pertaining to self-determination,

as well as purchase orientations to suggest some theoretical

possibilities for improving extant loyalty programmes.

Loyalty programmes, rewards and perceived benefits

Loyalty programmes comprise integrated systems of marketing

actions and communications that aim to increase loyalty, repeat

buying, and switching costs by providing economical, hedonist,

informational, functional, and sociological or relational rewards

(Gwinner et al., 1998; Gable et al., 2008). They are thought of as

activities that offer incentives (rewards) to customers based on

8

evidence of loyalty (purchase frequency or amounts). These rewards

refer to any abstract (e.g., virtue, pleasure, novelty, self-esteem) or

concrete (e.g., miles, points, discounts) stimuli granted by the loyalty

programme that launch consumers’ internal cognitive efforts and

thereby help (1) create perceived benefits, (2) improve economic

decision-making and motivation outcomes, and (3) strengthen the

intensity of approved purchase behaviours, such as loyalty (Tietje,

2002; Drèze and Nunes, 2006; Demoulin and Zidda, 2009; Drèze and

Nunes, 2011; Kwong, Soman and Ho, 2011).

The perceived benefit created by loyalty programme rewards is the

relationship between the consumer's perceived benefits in relation to

the perceived costs of receiving these benefits, and represents a

positive emotional response (e.g. such as subjective feelings of

pleasure or hedonic enjoyment) and a source of satisfaction and

motivation, because the rewards fulfill a desire or a goal (Zeithaml,

1988; Holbrook, 1996; Bagchi and Li, 2011). By categorizing the

different types of rewards that induce customer perceived benefit, we

can derive specific motivations that induce loyalty programme usage.

For example, utilitarian rewards tend to encompass three fields (Frisou

and Yildiz, 2011): economical rewards and monetary savings, which

correspond to an economic purchase motivation (e.g., price reductions,

purchase vouchers; Gable et al., 2008); convenience, in which case

9

they satisfy commodity motivations (e.g., facilitate purchase, reduce

purchasing time; Kwong et al, 2011); or informational rewards, which

are similar to exploration (Babin et al., 1994; Chitturi, et al., 2008;

Drèze and Nunes, 2011). In contrast, hedonistic rewards have more

emotional benefits (Holbrook and Hirschmann, 1982; Holbrook, 1996;

Arnold and Reynolds, 2003; Chitturi et al. 2008; Dagger and O'Brien,

2010) and correspond to motivations associated with giving or

receiving pleasure and entertainment (e.g., games, sweepstakes;

Mimouni-Chaabane and Volle; 2010). Recognition and social–relational

rewards enable people to gain status, be identified with a privileged

group, or establish a firm relationship, which makes their interactions

more interpersonal and helps the firm satisfy their needs better

(Gwinner et al., 1998; Hennig-Thurau et al., 2002; Lacey et al., 2007;

Drèze and Nunes, 2009; Lacey, 2009; Zhang and Wedel, 2009;

Morrisson and Huppertz, 2010).

Self-determination theory and purchase orientations

Motivation refers to the desire to engage in a goal-oriented

behaviour such as loyalty. Different theories about motivation exist.

Self-determination theory (SDT) is one of these particularly adapted

theories to study human behaviour (Deci, 1971). It suggests that

various rewards and contexts have differential effects on motivation.

Furthermore, the SDT indicates that the nature of the reward itself

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determines whether motivation is intrinsic or extrinsic. Intrinsic

motivation occurs when people engage in an activity because it

provides an internal reward, that is, for its own sake. These rewards

increase the internal gratification associated with a behaviour and thus

the internal reasons for maintaining it. In contrast, extrinsic motivation

results from the offer of external rewards in exchange for the desired

behaviour. Therefore, people engage in the desired behaviour for a

reward other than their interest in the activity and feel pressure to

obtain the offered reward. Economic benefits are the most commonly

cited external reward in psychology research (Deci et al., 1999).

(Ex)Intrinsic motivations have varying impacts on behaviour. Both

motivation and behaviour (de)increase in the long term in response to

an intrinsic (extrinsic) reward. Empirical evidence also shows that

extrinsic rewards can undermine motivation and behaviours, but

intrinsic benefits tend to have a positive effect.

Applied to loyalty programmes, intrinsic rewards motivate people to

act to obtain a benefit that matches their individual purchase goals;

extrinsic incentives motivate them to act to obtain a benefit separate

from their purchase target. Heterogeneous intrinsic or extrinsic

motivations probably depend on customers’ individual characteristics

and purchase orientations, such that purchasers are not intrinsically

motivated by the same rewards (Deci and Ryan, 2000).

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Purchase orientations refer to consumers’ mental predispositions

toward purchasing (Stone, 1954; Moschis, 1976; Kahn and

Schmittlein, 1989). They are based on people’s experiences and

personal value systems. Because such orientations are goal oriented,

they may explain various motivations, preferences, and behaviours

(e.g., search for information, purchase behaviour, loyalty).

Many orientations exist in the form of shopping goals, but most

typologies simplify this consideration by citing five main orientations

(Darden and Reynolds, 1971; Williams et al., 1978; Laaksonen, 1993;

Childers et al., 2001). The economic, budget-optimizing orientation

attempts to realize price economies (Babin et al., 1994; Gable et al.,

2008); a hedonist one aims to find pleasure through the potential

entertainment value and enjoyment of the fun and play arising from

the shopping experience (Hirschman and Holbrook, 1982; Arnold and

Reynolds, 2003; Chitturi et al. 2008; Dagger and O'Brien, 2010). An

apathetic or uninterested orientation implies efforts to decrease the

demands associated with purchasing (Mägi, 2003; Kwong et al, 2011);

these buyers dislike shopping and hope to purchase in an efficient,

timely manner to achieve their goals with minimal irritation (Babin et

al., 1994). The brand/store-loyal orientation (Dawson et al., 1990)

corresponds to a motive to remain loyal to favourite brands/stores and

gain reassurance about purchase choices to minimize uncertainty and

12

risk. This orientation implies a significant impact of habit and inertia.

Finally, shoppers with a social-relational orientation desire

personalized, privileged, interpersonal relationships with a brand or a

store (Lacey et al., 2007; Smith and Sparks, 2009b; Drèze and Nunes,

2009; Lacey, 2009; Morrisson and Huppertz, 2010; Zhang and Wedel,

2009).

Depending on these orientations, heterogeneous consumers are

differently motivated and develop coherent shopping strategies, such

as writing down a shopping list, making impulsive purchases,

comparing products and brochures, using loyalty cards, relying on

purchase vouchers, buying branded products, or searching for contacts

with sales staff (Darden and Reynolds, 1971; Babin et al., 1994;

Arnold and Reynolds, 2003).

Hypotheses

These ideas have significant implications for loyalty programmes,

because they suggest that extrinsic rewards might undermine some

consumers’ motivation and brand loyalty. In line with SDT, the intrinsic

motivation for loyalty programme usage and subsequently loyalty

should be largely goal oriented (i.e., to receive a particular reward)

and thus depend on the desired rewards that induce perceived benefits

(Daryanto et al., 2010; Drèze and Nunes, 2011), assuming they are

intrinsic and accord with the individual customers’ purchase

13

orientations (see Figure 1). Therefore, purchase behaviours depend on

specific perceived benefits, which must be coherent with individual and

heterogeneous customers’ motivations (McQuail, 1994).

Figure 1. Conceptual framework: How a loyalty programme works

Individual disparities in loyalty likely result from interpersonal

heterogeneity; customers have different purchase orientations and

should be differentially intrinsically motivated by various rewards that

induce different perceived benefits. Therefore, buyers devote unequal

effort to obtaining a given reward, according to the benefit they assign

to it in comparison with the associated expenses. Loyalty changes only

(Ex)Intrinsic motivation for loyalty

programme usage according to

customer purchase orientation

- Economical, budget-optimizing

- Hedonist

- Apathetic

- Brand/store-loyal

- Social-relational

Loyalty:

(Re)purchase

behaviour intensity

(PI)

Resistance to counter-

persuasion (RCP)

Perceived benefits of loyalty

programmes’ rewards

- Economy

- Hedonism

- Convenience

- Information

-Recognition & social

relationship

Input

Output (Efficiency)

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if consumers perceive that the benefit delivered by the rewards are

greater than the costs (e.g., joining expenses, switching costs) to gain

them (Vesel and Zabkar, 2009). The effect of loyalty programmes’

rewards on customer perceived benefits, as well as their loyalty, should

be moderated by individual customers’ purchase orientations and thus

their (intrinsic/extrinsic) motivation for various rewards. In turn, if the

reward corresponds to a customer’s purchase orientation, which

motivates him or her intrinsically to use the loyalty programme it

should relate positively to his or her perceived benefit and then should

have a persistent, positive impact on loyalty. In contrast, if the reward

does not correspond with a customer’s purchase orientation, it should

not motivate him or her extrinsically to use the loyalty program, and it

should not relate positively to his or her perceived benefit and then

should not have a persistent, positive impact on loyalty. We thus test

the moderating effect of purchase orientations on the link between

perceived benefits of rewards and loyalty. This general hypothesis

leads us to detail the testable sub hypotheses we summarize in Table

1.

Table I : Hypotheses about the impact of loyalty programmes' benefits on loyalty, according to purchase orientations

Purchase

Orientation

Economical,

Budget-

Optimizing

Social-Relational Apathetic Brand/store-

loyal Hedonist

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Purchase

Orientation

Economical,

Budget-

Optimizing

Social-Relational Apathetic Brand/store-

loyal Hedonist

Benefit

Recog. &

Rel. H1a 0 H2a + H3a 0 H4a + H5a +

Economy H1b + H2b 0 H3b 0 H4b 0 H5b 0

Hedonism H1c 0 H2c 0 H3c 0 H4c 0 H5c +

Convenience H1d 0 H2d 0 H3d + H4d 0 H5d 0

Information H1e + H2e 0 H3e 0 H4e + H5e 0

“+”positive effect on loyalty, “0” no effect on loyalty

Among customers with an economical purchase orientation,

economic rewards that grant monetary savings and informational

benefits about good deals (e.g. flyers, brochures, e-mails about good

deals and monetary savings) should create intrinsic motivation as they

engage in an activity for its own sake (e.g. budget optimization). They

therefore positively influence loyalty (H1b).

In contrast, relational benefits c, such as recognition, status and

relationships, hedonist gratifications (H1c), such as entertainment or

games, convenience benefits (H1d) that reduce the time and effort

associated with shopping and informational benefits (H1e), are

external rewards in exchange for the desired behaviour, create

extrinsic motivation and do not influence loyalty.

Among customers with a social-relational purchase orientation,

relational benefits (H2a) that grant recognition, status and

relationships with a specific store, brand, and its sales staff should

create intrinsic motivation as they engage in an activity for its own

sake. They therefore positively influence loyalty (H2a). In contrast,

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economic (H2b), hedonist (H2c), convenience (H2d) as well as

informational (H2e) benefits are external rewards in exchange for the

desired behaviour, create extrinsic motivation and do not influence

loyalty.

Among customers with an apathetic purchase orientation,

convenience benefits that reduce the time and efforts associated with

shopping should create intrinsic motivation as they engage in an

activity for its own sake. They therefore positively influence loyalty

(H3d). In contrast, relational (H3a), economic (H3b) as well as

hedonist benefits (H3c), and informational gratifications (H3e), are

external rewards in exchange for the desired behaviour, create

extrinsic motivation and do not influence loyalty.

Among customers with brand/store-loyal purchase orientation,

informational benefits (e.g. flyers, brochures, e-mails about good

deals, monetary savings and general information about the store or the

brand) about their favourite brands or stores probably create intrinsic

motivation. These benefits make them feel more comfortable and

minimize uncertainty as they signal that customers chose the right

brands or stores. Recognition and social relationships should also

create intrinsic motivation, because a stronger relationship with the

brand or the store increases their sense of trust and commitment,

which may offer a means to reduce risk perceptions (Morgan and Hunt,

17

1994). Both rewards consequently influence loyalty positively (H4a and

H4e). In contrast, economic (H4b), hedonist (H4c), and convenience

benefits (H4d), are external rewards in exchange for the desired

behaviour, create extrinsic motivation and do not influence loyalty.

Among customers with a hedonist purchase orientation, hedonist

and relational benefits that give pleasure and relationships with a

specific store, brand, and its sales staff, should create intrinsic

motivation as they engage in an activity for its own sake. Indeed,

relationships are probably perceived as pleasant and should create

hedonist feelings. These type of rewards therefore positively influence

loyalty (H5a and H5c).In contrast, economic gratifications (H5b),

convenience (H5d) and informational benefits (H5e), are external

rewards in exchange for the desired behaviour, create extrinsic

motivation and do not influence loyalty.

At this stage though, we cannot establish precise predictions for

these effects, because it is not easy to define the degree of correlation

between a single shopping orientation and a single purchase goal.

These variables probably are multidimensional, because consumers

rarely pursue just one purchase target. To our knowledge, no

investigations have considered the relationship among loyalty

programme rewards, purchase orientations as well as intrinsic

motivation, and customer perceived benefits, as well as loyalty.

18

Therefore, we explore and evaluate the value of the general framework

(Table 1) that we use to test our research hypotheses. The empirical

findings cannot provide a test of a well-established priori theory;

rather, they represent a step toward building a theory.

Methodology and empirical investigation

We first developed our measure instruments and pretested them in

order to purify them by a measurement model analysis. We then

applied the scales to two sectors and investigated a sample loyalty

programme members of a grocery retailing hypermarket as well as a

perfumery chain, both located in Toulouse (a major south-western

French city). These sectors are completely opposite in terms of product

involvement (high involvement for the perfumery, low involvement for

the grocery retailing hypermarket) in order to see if our results hold in

these different consumption domains.

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Measure development

The absence of directly applicable existing scales for each

construct required us to adapt or develop multi-item Likert scales

for this study. For perceived rewards’ benefits of the loyalty

programme, we adapted items from Arnold and Reynolds (2003),

and Hennig-Thurau et al. (2002); the purchase orientation items

were adapted from Laaksonen (1993). For our scale development,

we employ concept mapping and expert reviews to ensure the

scales apply to the specific contexts of the two loyalty programmes.

Furthermore, our scale development process follows the procedures

advocated by prior literature (Churchill, 1979).

Our qualitative study of 30 French loyalty programme managers

from different retailing sectors (e.g., grocery, perfumery, and other

specialized retailers) provided further insights into the rewards that

customers perceive when they participate in loyalty programmes, as

well as their common purchase orientations. Together, the literature

review and qualitative study suggested 20 items for measuring

perceived rewards’ benefit (Mimouni-Chaabane and Volle, 2010) and

25 items for purchase orientations.

In Table 2, we summarize the principal reward types offered by the

various programmes to members, which we classify according to

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loyalty programme managers’ categorizations of benefits according the

five dimensions of perceived benefits

Table II : Typology of rewards offered by loyalty programmes to

members

Program Hedonism Recognition &

social

relationship

Economy Convenience Information

Grocery

Games,

sweepstakes,

exchange

points against

spa

Personalization

at check-out,

mailing

birthday

&special events

Purchase

vouchers,

reductions at

check-out

(value reward/

spent amount:

3%

Priority check-

out, home

delivery

Newsletter

with general

information

about the

store,

personalized

mailings

according to

most bought

products and

good deals

Perfumery

Games,

sweepstakes,

exchange

points against

cosmetics,

beauty services

Mailing birthday

& special

events

Purchase

vouchers,

reductions at

check-out

(value reward/

spent amount:

3%)

Beauty services

Newsletter

with general

information

about the

store, mailings

of news and

personalized

beauty advice

as well as

good deals

Hedonist rewards pertain to all benefits that give pleasure, such as

games or sweepstakes. Recognition and social rewards include

personalization, privileges, status, or special events; the economic

benefits offer monetary savings, purchase vouchers or price

reductions. Convenience rewards attempt to decrease purchase time,

such as by offering priority check-out, and informational rewards entail

personalized mailings that provide information about the most bought

21

products or advice. We cannot necessarily classify rewards precisely

into single perceived benefit categories though, because in practice,

they may be multidimensional and satisfy several purchase targets

(e.g., priority checkout could deliver relational and functional benefits).

Loyalty consists of one behavioural dimension and one attitude

dimension (Dick and Basu, 1994). True loyalty entails purchase

intensity, accompanied by an underlying positive attitude and

resistance to counter-persuasion from competitors. We therefore

employ a five-item scale (Bruner et al., 2005) to measure purchase

intensity (PI) and resistance to counter-persuasion (RCP).

To test the research instrument and purify the measurement

instrument to optimize the data collection procedure for a much larger

sample, we pretested each scale with a random sample of loyalty

programme holders from the grocery retailer (N = 210) and the

perfumery (N = 120) in Toulouse (these respondents were not included

in the final study). All items used five-point Likert scales (1 = “strongly

disagree” to 5 = “strongly agree”), such that respondents indicated

their degree of agreement with a series of statements about the

stimulus object. We built our measurement model using exploratory

(EFA) and confirmatory factor analysis (CFA) with three scales

(Gerbing and Anderson, 1988).

Measurement model analysis

22

The purification of the pool of items pertaining to the three multi-

indicator constructs (purchase orientations, perceived reward benefits,

and loyalty) relied on using item-to-total correlations and EFA

(principal axis factor analysis with oblique rotation) in an iterative

process. Values with loadings close to or greater than 0.60 and factors

with eigenvalues greater than 1 are acceptable (Sharma, 1996). On

the basis of the EFA results, we performed three CFA with a new

sample of respondents, recruited in both retailing outlets (grocery N =

199, perfumery N = 101). We employed AMOS 5.0 for the three multi-

indicator constructs and confirm the EFA factor structures. Finally, our

measure purification results in 20 items for purchase orientations, 15

items for perceived loyalty programmes' benefits, and 5 items for

loyalty, as we show in Tables 3–5, respectively.

Table III : CFA: Purchase orientations

Loadings

“When doing

purchasing

(grocery,

cosmetics)”..

..

Budget-

Optimizing

Brand/store-

loyal

Hedonist Social-Relational Apathetic

Items Gro-

cery

Perfu-

mery

Gro-

cery

Perfu-

mery

Gro-

cery

Perfu-

mery

Gro-

cery

Perfu-

mery

Grocery

I often purchase products on promotion.

0.811 0.889

I do not pay attention to brands

reputation

0.714 0.778

I try to minimize purchase amounts

0.721 0.760

I always research good deals

0.649 0.721

23

I have my preferred brands I choose first

0.832 0.777

I always use my

loyalty card 0.672 0.772

I always choose the same store

0.641 0.761

Product/on-board quality is important

0.692 0.862

Purchase coupons give me pleasure

0.887 0.616

I like to try new products/destinations

0.814 0.821

It is a pleasure to discover new products

0.763 0.605

I look at magazines to get informed

0.624 0.710

I appreciate the contact with sales staff

0.814 0.750

I appreciate to be close to the store & have a good relationship

0.732 0.848

I appreciate to be recognized as a privileged customer

0.764 0.791

I appreciate the store’s paying more attention to me than others

0.714 0.740

It is a chore

0.89

I buy in an impulsive way

0.79

I know perfectly in advance what buy

0.74

I look to ads before

purchasing

0.63

Variance

extracted 18% 22% 16% 20% 15% 18% 11% 11% 10%

Cronbach’s

alpha 0.73 0.90 0.78 0.85 0.77 0.75 0.82 0.71 0.83

Fit indices 2 /sig RMSEA GFI AGFI CFI

Grocery 30.75/0.00 0.042 0.994 0.961 0.996

Perfumery 3.78/0.00 0.044 0.97 0.96 0.95

Notes: Complete EFA results available on request.

24

Table IV CFA: Perceived benefits from the loyalty programme

Factor The loyalty programme of firm X... Grocery Perfumery

Hedonism

gives me pleasure me as I participate in games 0.974 0.981

gives me pleasure when I exchange points (miles) 0.963 0.924

creates pleasant distractions & surprises 0.929 0.922

Variance extracted by the factor

Cronbach’s alpha

19%

0.96

23%

0.76

Recognition &

social

relationship

makes me feel as if the store’s paying more

attention to me than others 0.889 0.930

makes me adhere to a group of privileged customers 0.771 0.734

makes the store (airline) treating me as a privileged

customer 0.768 0.900

Variance extracted by the factor

Cronbach’s alpha

16%

0.83

17%

0.89

Economy

is the best means to reduce the purchase amount 0.844 0.932

gives monetary advantages 0.702 0.913

allows me to make substantial economies 0.605 0.899

Variance extracted by the factor

Cronbach’s alpha

13%

0.71

12%

0.90

Convenience

allows me to find more easily usual bought products 0.871 0.975

grants additional services 0.784 0.975

makes purchases easier and more practical 0.611 0.791

Variance extracted by the factor

Cronbach’s alpha

12%

0.71

11%

0.77

Information

makes me choose new products 0.785 0.859

makes me discover good bargains& new ideas 0.660 0.827

allows me to be well informed about news & general

information 0.615 0.746

Variance extracted by the factor

Cronbach’s alpha

11%

0.77

10%

0.82

2/sig 2.58/0.2 2.88/0.5

RMSEA< 0.05 0.04 0.04

GFI/ AGFI/ CFI 0.90 0.98/0.97 0.96/0.95

Notes: Complete EFA results available on request.

25

Table 1 Table V : CFA: Loyalty

Thanks to the loyalty program of firm X….. Grocery Perfumery

Purchase

Intensity

(PI)

I increase me purchase frequency 0.91 0.85

I buy a larger variety of products in this

company 0.68 0.73

Variance extracted by the factor

Cronbach’s alpha

42%

0.81

40%

0.77

Resistan

ce to

counter

persuasi

on (RCP)

I return to the same shop 0.92 0.83

I shop (book) less often in competitors’

companies. 0.80 0.79

I recommend this company to my family and

friends. 0.61 0.70

Variance extracted

Cronbach’s alpha

38%

0.79

35%

0.75

2 /sig 5.65/0.1 6.11/0.04

RMSEA < 0.05 0.03 0.03

GFI/ AGFI/ 0.90 0.97/0.9

6 0.91/0.92

Notes: Complete EFA results available on request.

Regarding purchase orientations, we identify five grocery retailing

factors, consistent with prior literature (Laaksonen, 1993): (1)

economic, budget-optimizing, 2) brand/store-loyal, (3) hedonist, (4)

social-relational, and (5) apathetic or uninterested. Because the

perfumery domain should be more involving and hedonistic than

grocery retailing, it seems logical that we find no apathetic orientation

for it but instead identify only four dimensions. The extracted variance

is 70% and 74% in the grocery and perfumery sectors, respectively.

Regarding perceived loyalty programmes' benefits, we again

identify five dimensions (economy, hedonist, convenience, information,

recognition and social relationships; Hennig-Thurau et al., 2002;

26

Arnold and Reynolds, 2003; Mimouni-Chaabane and Volle, 2010), in

both the grocery and perfumery sectors. The extracted variance is 71%

and 72%, respectively.

Finally, for the loyalty scale, we uncover two factors, purchase

intensity (PI) and resistance against counter-persuasion (RCP), for

both sectors. The extracted variance is, respectively, 80% and 81%.

To assess the overall fit of the model, we investigated several fit

indices, as recommended (Fornell, and Larcker, 1981; Byrne, 2001).

The goodness-of-fit indexes (GFI) are greater than 0.9 for the multi-

indicator constructs (1 – 2 2 for the null

model]); the GFI measures adjusted for degrees of freedom (AGFI),

which uses mean squares instead of total sums of squares in the

numerator and a denominator of (1 – GFI), are greater than .8.

Furthermore, the root mean square error of approximation (RMSEA), or

the mean of the squared residuals comparing the observed and

predicted covariance matrices, is less than 0 2

2 would indicate a lack

of satisfactory model fit. These indicators provide evidence of good

model fit for the three multi-indicator constructs.

To assess the adequacy of the measures, we also evaluate the

reliability of the individual items and the discriminant validity of all

constructs. Our measure of item reliability uses Cronbach's alpha; the

27

values are all greater than 0.7 for the purified scales, and all loadings

approach or exceed 0.7 with regard to the latent variable, which

indicates that more than 50 percent of the variance in the observed

variable can be explained by the corresponding construct. Thus, we

have evidence of good reliability and internal consistency. Each item

loaded significantly on its intended latent variable, which suggests all

items are adequate. We confirm the convergent validity of all scales

and sectors.

To assess the discriminant validity of the constructs, we first

examine the cross-loadings and find that the latent variables share

more variance with their respective items than with other latent

variables. All values representing the square root of the average

variance extracted (AVE) from each construct also are substantially

greater than all other correlations of the factor with other constructs.

The AVE for all constructs is greater than the generally accepted value

of 0.50. Thus, we confirm discriminant validity for all constructs and

unidimensionality for all purified measurement scales (see Tables 6–

10).

Table VI Discriminant and convergent validity: Purchase orientations (Grocery)

Economical Brand/

store-loyal

Hedonist Social-

Relational

Apathetic

Economical 0.83*

Brand/store-

loyal 0.02 0.94*

Hedonist 0.33 0.16 0.79*

28

Social-

relational 0.17 0.07 0.31 0.89*

Apathetic 0.05 0.27 0.27 0.20 0.90*

Notes: Diagonal elements are the square roots of the AVE of the concerned

constructs or factor,

* p = 0.01.

Table VII Discriminant and convergent validity: Purchase

orientations (Perfumery)

Economical Brand/

store-loyal

Hedonist Social-

Relational

Economical 0.90*

Brand/store-loyal 0.06 0.86*

Hedonist 0.22 0.16 0.80*

Social-relational 0.09 0.06 0.28 0.79*

Notes: Diagonal elements are the square roots of the AVE of the concerned

constructs or factor,

* p = 0.01.

Table VIII Discriminant and convergent validity: Perceived benefits

loyalty programme (Grocery)

Hedonism Recog. &

Relationsh.

Economy Conven. Inform.

Hedonism 0.94*

Recognition&

Relationship

0.24 0.95*

Economy 0.12 0.14 0.93*

Convenience 0.23 0.04 0.18 0.91*

Information 0.11 0.15 0.19 0.19 0.94*

Notes: Diagonal elements are the square roots of the AVE of the concerned

constructs or factors.

*p = 0.01.

Table IX Discriminant and convergent validity: Perceived benefits loyalty programme (Perfumery)

Hedonism Recogn. &

Relationsh.

Economy Conven. Inform.

Hedonism 0.94*

Recognition&

Relationship

0.29 0.92*

Economy 0.02 0.04 0.97*

Convenience 0.03 0.04 0.06 0.92*

Information 0.1 0.17 0.12 0.13 0.94*

29

Notes: Diagonal elements are the square roots of the AVE of the concerned

constructs or factors.

*p = 0.01.

Table X Discriminant and convergent validity: Loyalty

PI RCP

Grocery Perfumery Grocery Perfumery

Purchase intensity (PI) 0.94* 0.92*

Resistance to counter-

persuasion (RCP)

0.19 0.13 0.98* 0.97*

Notes: Diagonal elements are the square roots of the AVE of the concerned

constructs or factors.

* p = 0.01.

Data collection

For the final survey, we gathered two samples of loyalty card

members of the grocery hypermarket (N = 2,001) and the perfumery

chain (N = 1,925). Respondents were randomly invited (in 2007) to

complete the questionnaire about a single loyalty programme at each

of the retailers during shopping trips, surveyed Monday–Saturday to

achieve greater representativeness. As a token of appreciation for

participating, respondents were offered chocolate from the grocery

retailer and perfume samples from the perfumery. After agreeing to

participate, respondents indicated their purchase orientations on the

20-item scale, then their perceived reward benefits from the loyalty

programmes on the 15-item scale. Finally, they revealed the impact of

30

the loyalty programmes’ perceived reward benefits on their loyalty,

according to the 5-item scale.

As the final sample characteristics in Table 11 show, more shoppers

were women for both the hypermarket (59%) and the perfumery

(70%). Almost half of the sample was between the ages of 25 and 44

years, and a wide range of professions was represented.

Table XI Sample characteristics

Level Grocery Perfumery

Gender Female 59% 70%

Male 41% 30%

Age

18-24 years 10% 8%

25-34 years 23% 20%

35-44 years 24% 26%

45-64 years 28% 28%

65 years & more 15% 18%

Marital

Status

Single 39% 36%

Married/Couple 60% 63%

Other 1% 1%

Profession

Inactive 22% 22%

Worker 21% 7%

Liberal profession 7% 11%

Employee 23% 20%

Merchant 6% 11%

Executive 21% 29%

Purchase

expenditure

per purch.

act

1-50 € 8% 12%

51-120 € 66% 49%

> 120 € 26% 39%

Purchase

frequency

1-6 times/year 4% 64%

1 times/month 14% 25%

2 times/month 60% 10%

>2 times/month 22% 1%

Card

membership

1-2 years 18% 20%

> 2 years 82% 80%

In terms of purchase behaviour, most respondents spent between 51€

and 120€ per trip to the grocer (66%) and the perfumery (49%). Most

31

customers purchase twice per month from the grocery chain (60%) but

one to six times per year from the perfumery (64%). In both sectors,

more than 80% had been programme members for more than two

years, which implies they should be highly familiar with the functioning

and reward structure of the related loyalty schemes.

Results

We developed structural equation models (SEM) to test our

research hypotheses. To test how individual purchase orientations

moderate the relationship among loyalty programmes’ perceived

benefits, and loyalty (PI and RCP), we used multigroup SEM (AMOS

5.0). Furthermore, we compared the relaxed model against a

constrained model in which the parameters remain equal across the

cluster, using a likelihood test. We performed a multiple-group analysis

by splitting the samples by sector (Byrne, 2001).

Table XII Samples by sector

Validation/

hold-out

sample

Economical Social-

Relational Apathetic

Brand/store-

loyal Hedonist

Grocery 721 321 212 400 347

Perfumery 770 385 0 423 347

We first estimated a base model (without purchase orientations or

restrictions), then extended it by taking the different purchase

32

orientations into account (with a set of equality constraints), fit by

sector.

In both sectors and both extended models, the indexes of

adjustment are better than those for the base model (see Table 13).

Table XIII Indexes of fit

Grocery Perfumery

Base

Extended

Model Base

Extended

Model

CMIN 2 8500 6665 6665 897

p 0.8 0.7 0.48 0.41

df 1772 1732 1732 191

CMIN/df 4.79 3.85 3.8 4.7

RMSEA 0.06 0.048/ 0.04 0.04

GFI 0.5 0.90 0.7 0.92

AGFI 0.6 0.92 0.6 0.93

The GFI and AGFI are all greater than 0.9, and the RMSEA is less

than .05. Furthermore, the 2 (CMIN) decreases from the base model

to the extended models, indicating a better fit of the more complex

models that include purchase orientations. Imposing restrictions in the

extended models across the two samples does not result in a

statistically significant worsening of the overall model fit. Therefore,

the model appears to apply across groups.

After selecting the final model that best fits the data, we interpret the

overall parameter estimates (standardized path coefficients to validate

the results across the two different product categories). All

hypothesized relationships (rewards perceived benefits according to

intrinsic purchase orientation PI/RCP) are statistically significant (p

33

< 0.01 or p < 0.05). However, some rewards that we did not anticipate

would be intrinsic are significant for some shopper types (see Tables

14 and 15).

Table XIV Grocery retailing: Impact of perceived benefits on loyalty (standardized path coefficients)

Shopper Economical Social-Relational Apathetic Brand/store-loyal Hedonist

Perc. benefit PI RCP PI RCP PI RCP PI RCP PI RCP

Recog. & Rel. -

0.097ns -0.074ns 0.72** 0.63** -0.17* -0.15* 0.097* 0.054* 0.22* 0.26*

Economy 0.74** 0.62** -0.089ns -0.057ns 0.087ns 0.083ns 0.027ns 0.049ns 0.089ns 0.025ns

Hedonism 0.017ns 0.013ns 0.043ns 0.047ns -0.022* -0.023* 0.022ns 0.086ns 0.83** 0.85ns

Conven. 0.047ns 0.032ns 0.025ns 0.088ns 0.95** 0.88** 0.037ns 0.055ns -0.32* -0.31*

Inform. 0.27** 0.32** 0.15ns 0.19ns 0.093ns 0.022ns 0.94** 0.91** 0.044* 0.015*

** p < 0.01,* p < 0.05, ns: not significant impact on dependant variables.

Table XV Perfumery: Impact of perceived benefits on loyalty (standardized path coefficients)

Shopper Economical Social-Relational Brand/store-loyal Hedonist

Perceived benefit

PI RCP PI RCP PI RCP PI RCP

Recog. & Relation -0.06ns 0.07ns 0.38** 0.18** 0.22* 0.17* 0.21* 0.17*

Economy 0.66** 0.17** 0.02ns 0.21ns -0.25ns -0.12ns -0.20ns 0.19ns

Hedonist 0.85ns 0.38ns 0.044ns 0.029ns -0.88ns -0.19ns -0.90** 0.25**

Convenience -00.01ns 0.34ns -0.55ns 0.25ns 0.05ns 0.83ns -0.29ns 0.27ns

Informational 0.41** 0.16** 0.42ns 0.28ns 0.11** 0.05** 0.07* 0.25*

** p < 0.01, * p < 0.05, ns: not significant.

Economical, budget-optimizing shoppers are most motivated

(intrinsically) by economic rewards in terms of both PI and RCP

(grocery retailing b = 0.74, b = 0.62; perfumery: b = 0.66, b = 0.17;

p < 0.01). Informational rewards about good deals also increase their

PI and RCP (grocery retailing b = 0.27, b = 0.32; perfumery b = 0.41,

34

b = 0.16) and are highly significant (p < 0.01). We thus confirm H1b

and H1e. However, recognition and social relationships, hedonist, as

well as convenience rewards are extrinsic (p >0.1), as expected and in

support of H1a, H1c, and H1d, respectively.

For social-relational shoppers, who are intrinsically motivated by

their social relationships with sales staff and recognition as a privileged

customer, relational rewards influence PI and RCP strongly, as

expected in H2a (grocery: b = 0.72, b = 0.63; perfumery: b = 0.38, b

= 0.18; p < 0.01). Extrinsic economic, hedonist, convenience, and

informational rewards have no impact though (p > 0.1), so we confirm

H2b–e. These shoppers are indifferent to convenience devices that

shorten the shopping trip, because they are incompatible with their

intrinsic purchasing target.

Apathetic buyers appear only in the grocery retailing context;

because they perceive shopping as drudgery, their intrinsic motivation

is to make shopping effective and quick. Convenience rewards increase

their PI and RCP (b = 0.95, b = 0.88; p < 0.01), in support of H3d.

Economic (b = -0.087, b = -0.083; p > 0.1) and informational (b =

0.093, b = 0.022; p > 0.1) benefits are extrinsic and have no impact;

we thus find support for H3b and H3e. Recognition and social

relationships (b = -0.17, b = -0.15) as well as hedonist rewards (b = -

0.022, b = -0.023) even have a negative impact (p < 0.05). H3a and

35

H3c are not supported because results show negative effects. Even if

there is no support for theses hypotheses the results are remarkable as

they show that some rewards might eventually erode intrinsic interests

and undermine feelings of control, which can interfere with consumers’

motivations and loyalty (Deci and Ryan, 1985).

Brand/store-loyal shoppers hope to gain reassurance about

purchases, generally by gaining more information. Informational

rewards (e.g. information about good deals and general information

about the store or the brand; grocery: b = 0.94, b = 0.91; perfumery:

b = 0.11, b = 0.05; p < 0.01) as well as relational rewards (e.g. a

stronger relationship with the store or the brand increases trust, which

may offer a means to reduce risk perceptions; grocery: b = 0.097, b =

0.054; perfumery: b = 0.22, b = 0.17; p < 0.01) have a strong

influence on PI and RCP, in support of H4a and H4e. Finally, in support

of H4b, H4c and H4d, economic, hedonist, and convenience benefits

are not significant in either sectors (p > 0.1); that is, they are

extrinsic.

For hedonist customers, who are intrinsically motivated by

shopping pleasure, the hedonist rewards (grocery: b = 0.83, b = 0.85;

perfumery: b = 0.90, b = 0.25; p < 0.01) and social relationships

(grocery: b = 0.22, b = 0.26; perfumery: b = 0.21, b = 0.17; p <

0.05) have strong influences on PI and RCP. Relationships are probably

36

perceived as pleasant and should create hedonist feelings. These

results clearly support H5a and H5c. Informational benefits (grocery: b

= 0.044, b = 0.015; perfumery: b = 0.07, b = 0.25; p < 0.05),

contrary to our expectations, have a positive influence as well, perhaps

because they offer a means to gain information about hedonist

devices, events as well as to discover new ideas and products.

Regardless of the explanation, we must reject H5e. Convenience

rewards have either a negative significant impact on PI and RCP in the

grocery retailing context (b = -0.32, b = -0.31; p < 0.05) or are

insignificant in the perfumery (b = -0.29, b = 0.27; p > 0.1). The

negative signs for these rewards show again that there might be an

erosion of consumers’ motivations and loyalty. We thus reject H5d.

Economic rewards are insignificant (p > 0.1) and extrinsic in with

support H5b.

Discussion, academic and managerial implications

To improve knowledge about the effectiveness of loyalty

programmes, we have investigated how purchase orientations

moderate the relationship between perceived loyalty programmes'

benefits, motivation, and loyalty. Accordingly, we note the following:

Customers’ different intrinsic or extrinsic purchasing motivations or

orientations determine the perceived benefits from the loyalty

programme’s rewards and reinforce unique motivations and behaviours

37

(Deci, 1971). Customers reportedly develop different, coherent

purchase behaviours (including loyalty programme usage), because

they are not intrinsically motivated by the same targets. Intrinsic

rewards motivate them to act to obtain a benefit that falls within the

target of their purchase orientation and thus creates interest or

pleasure in the task. They also correspond positively to intrinsic

reinforcements and have a positive, long-term impact on purchase

behaviour and loyalty. Economic and informational rewards are

intrinsically most motivating for economical, budget-optimizing

shoppers and have the strongest impact on their loyalty. Social-

relational shoppers are intrinsically motivated by social relationships

which influence loyalty positively. For apathetic buyers convenience

rewards increase loyalty. Brand/store-loyal shoppers are intrinsically

motivated by informational as well as relational rewards which increase

loyalty.

In contrast, extrinsic rewards motivate customers to act to obtain a

benefit that is separate from the target of their purchase orientation

and do not influence their loyalty (Deci et al., 1999; Kivetz, 2005).

Our results challenge the widespread behaviourist belief about

conditioned behaviour (Skinner, 1976), applied in the development of

most loyalty programmes that rely on money and sales promotions to

motivate people. Extrinsic rewards that “buy” customers’ intrinsic

38

motivations to repurchase probably encourage them to focus narrowly

on the reward and attempt to obtain it as quickly as possible.

Therefore, it eventually might erode intrinsic interests and undermine

feelings of control, which can interfere with consumers’ motivations

(Deci and Ryan, 1985).

From an academic point of view, this study contributes to existing

knowledge about relationship marketing. First, we provide a multi-

benefit framework that identifies the different rewards benefits

customers may perceive when participating in loyalty programmes. In

addition to monetary aspects, members experience a range of

nonmonetary benefits, related to exploring the firm's products,

entertainment, or relational aspects. The ability to measure these

perceived rewards’ benefits offers researchers and managers a better

capacity to study the behavioural impacts of loyalty programmes.

Second, we demonstrate that the intrinsic or extrinsic nature of

rewards appears contingent on individual purchase motivations (Deci

and Ryan, 2000). For one customer, an intrinsic reward can be

material or immaterial and intrinsically motivating, depending on the

purchasing situation. Yet the same reward could be extrinsically

motivating for another customer or in another situation.

In turn, our findings have important implications for loyalty

programme managers. In particular, they should promote diverse

39

rewards, segment their customer portfolios, and achieve differentiation

through nonmonetary benefits. The perceived benefits associated with

loyalty programmes are diverse and relate to multiple consumer

motivations and purchase orientations. The absence of segmentation in

existing loyalty schemes therefore causes inefficiency, because strong

customer heterogeneity can result in programme failure. The principal

role of loyalty programmes should be to identify and segment

customers as a means to improve resource allocations. For example,

loyalty scheme managers might segment the target market according

to consumers’ purchase orientations and associated reward

preferences. A more thorough analysis of loyalty schemes’ effects and

detriments at the individual level thus is necessary, because consumer

characteristics influence the strength and direction of the impacts on

repurchase behaviour. With such information, firms can adopt tailored

strategies, using both monetary and nonmonetary incentives and

integrating functional and hedonistic features into loyalty programmes

to appeal to different segments and enhance their use. For example,

Tesco’s loyalty scheme demonstrates how success can be a function of

programme efficiency and data-driven customer behaviour and needs

knowledge (Humby et al., 2004).

Differentiation through intangible, nonmonetary benefits also is

possible in markets marked by strong competition and isomorphism

40

(Powell and DiMaggio, 1982). The differences among retailers’ offers

are few, the benefit of rewards is low, programmes are easily

exchangeable, and switching costs are minimal (Meyer-Waarden,

2007). Therefore, retailers, such as Tesco, that invest in rewards such

as personalized services or functional value-added information can

attain a difficult-to-imitate advantage.

Conclusions and future research directions

Our research suffers several limitations that further research should

consider. First, we find that for some purchase orientations, certain

rewards are intrinsic and affect behaviour, in contrast with our a priori

expectations; it remains challenging to define the degree of the

relationship among an intrinsic purchase orientation and perceived

loyalty programmes' benefits. Because purchase orientations are

multidimensional, segment overlaps likely exist (e.g., hedonist–

relational). Second, our results confirm just how difficult it is to classify

rewards exactly and uniquely to one category, because they can satisfy

several purchase targets at the same time. Our research shows that

intrinsic or an extrinsic motivation depend on the individual but it is

probable that is also varies within an individual, depending on mood

and circumstances (Smith and Sparks, 2009b). Additional research

should try to categorize purchase orientations and rewards more

precisely and to test motivation according to mood and circumstances.

41

Third, our analysis does not include the dynamics and value of

accumulated points or, more generally, dynamic rewards. A

longitudinal approach could offer a strong extension for further

research.

Although previous experimental investigations indicate that loyalty

scheme effectiveness depends on the program’s design (Kivetz and

Simonson, 2002; Yi and Jeon, 2003; Kivetz, 2005), few supporting

field data are available. More research and replications are necessary

to determine the psychological aspects of customer loyalty reward

schemes and individualized reward systems. Another critical concern

involves the applicability of self-determination theory (Deci, 1971) in

marketing. The SDT emerged from research in domains such as school

education for children or motivation of athletes; does it also hold in

purchasing contexts such as grocery retailing? Enhancement effects

accrue when people receive rewards for performing uninteresting

tasks, such as purchasing (Hitt et al., 1992). Perhaps intrinsic interest

in a task also declines when firms grant extrinsic rewards. More

experimental approaches that analyze how rewards influence purchase

behaviour are recommended, because different theoretical points of

view could help clarify this question.

42

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