The impact of product promotion on customer loyalty: A quantitative study on Zara

Abstract: We are living in a competitive business world, on which every company strives to have a better and more significant share of the market. Long term customer relationship is essential in order to reach that success. At the same time, an essential aspect of generating and creating that customer-company engagement, customer loyalty, is product promotion. This research aims to address one of the most important key elements for companies, particularly in the case of Zara: The impact of product promotion on customer loyalty. This particular research aims to illustrate which are the key variables that have the most impact on customer loyalty. There is a hard work/high implication behind customer loyalty for a company; for this reason, it is necessary to know on what to focus, invest, and concentrate. In order to be able to answer the presented question an in-depth research together with a study and analysis has been made. To accurately explore the purpose of this study, we conducted a quantitative research in the Spanish market, aiming to best answer this study. To do so, we administered a survey (created in English and then translated in Spanish) between 157 respondents analyzing different variables on the Spanish market; Promotional Pricing, Point of Purchase Display, Perceived Quality, Perceived Value, Attributes, Customer Relationship, Trustworthiness and Loyalty where the variables analyzed. The theoretical framework that we used to base our survey construction comes from different researchers on the analyzed variables. We made use of different theories from the marketing field as well as promotion-based ones in order to be able to empirically analyze and give an answer to the proposed question of this research. Finally, we concluded by answering the research question, and the research gap found. The main conclusion of this research includes an algorithm that leads to customer loyalty: Customer loyalty = Perceived Value + Customer Relationships + Trustworthiness As presented above, we came to the conclusion that the three main divisors that affect to our customer loyalty formula are: perceived value, customers relationships, and trustworthiness. These fundamental elements that conform to our customer loyalty formula, mostly rely on POP Display as a main promotional tool to impact them.