Cultural difference of customer equity drivers on customer loyalty: A cross-national comparison between South Korea and United States

Abstract

Purpose: Many advanced discount stores could not reach the certain growth level due to cultural differences and their marketing strategies that have failed to adopt in local market environment. The purpose of this study is to find the effects of customer equity drivers on customer loyalty and to examine cultural differences between South Korea and United States. Methodology/Approach: This study sets independent variables of value equity, brand equity and relationship equity from the customer equity model and tests to see how each equity driver affects customers' loyalty through gaining their trust and satisfaction in the discount store industry. We applied structural equation model to test the hypothesis. We conducted a survey on customers who had shopping experiences in discount stores and gathered data from United States and South Korea respectively. Findings: The results show that there are significant differences in the effects of customer drivers on customer loyalty via trust and satisfaction in large retail industries. While Satisfaction had some effects on building their loyalty in Korea, satisfaction had no effect in gaining customers’ loyalty in USA. Research Limitation/implication: The results of this study are highly relevant for managers who must make strategic marketing decisions for different cultures. Originality/Value of paper: This study is the first systematic cross-cultural examinations on how customer equity drivers in discount stores affect customer loyalty between USA and South Korea. Category: Research paper.