consumer rewards and their role in customer's orientation

7/30/2019 Consumer Rewards and Their Role in Customer's Orientation

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Consumer Rewards and their Role in Customer's Orientation: An

Empirical Study on the Fast-Food Restaurants in Amman

Dr. Ahmad ZamilKing Saud University, Riyadh Community College, Faculty of Administrative Science,

P.O.Box 28095,Riyadh 11437, Kingdom of Saudi Arabia, Tel: 966 543718710,

Email:[email protected],[email protected]

Abstract:

This study aims to identify the kinds of rewards offered by the fast food restaurants in

Amman to the customers. Study will focus on what fast food restaurants offer as

incentives and rewards to attract more customers and increase sales volume. Primary

data was collected by using a questionnaire distributed on the respondents, in order to

ranking of their preferences to the rewards granted by the fast food restaurant. The main

results are that rewards, especially '' gifts for children'' play a significant role in

customer orientation.

Keywords: Consumer Rewards, Customer Orientation, Fast-Food

1- Introduction:

There were many reasons that led to the increased demand for Jordan's population

to eat through fast food restaurant especially in the capital Amman. One of the most

important reasons is the diversity of the population of the community in the capital,

where there are a large number of Iraqis living in Amman because of the war in Iraq.

And there are hundreds of thousands of Egyptians working in various sectors , in

addition to a number , not a few, of Arab students , especially from Gulf Countries

receiving study in Jordanian universities , which are concentrated mostly in Amman .

Due to the lack of knowledge of some of these as how to prepare food at home, and

the lack of sufficient time to prepare food especially in the category of students, there is

increased demand of the consumption of fast food. It should be noted here that the

number of tourist restaurants in the kingdom of 159 restaurants, including 80
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restaurants to fast food (Alghad, 2010). one of the reasons that led to spread of fast food

restaurants, and the growing demand for meals, is the change in lifestyle, and increased

working hours, and a few hours to rest, and exit of women to work, so children did not

find the chance to eat, but in these restaurants .in addition to advertising and

promotional campaigns in various advertising media.

This study will focus on what fast food restaurants offer as incentives and rewards to

attract more customers and increase sales volume.

2- Problem Statement and Questions:

Since customer orientation means, the completely focus on customers wants

and needs only (Copell, 2007), the problem of this study was formulated as follows:

"Consumer reward system, can be a driver for customer orientation"

This problem will be discussed according to the following questions:

1- Which kind of rewards motivates the customer to buy fast food?2- In what occasions, do the fast food restaurants operating in Amman to announce

the offering of rewards to the customers?

3- What is the impact of announcement of rewards by fast food restaurantsoperating in Amman on customer demand?

3- Importance of the Study:retailers in their promotion campaigns rely on presentation encouraging for

consumer, in order to achieve a number of immediate goals in the short-term, such as

increasing the volume of sales, and attracting new customers, to be followed to achieve

strategic goals in the long-run, such as survival in the market, increased market share

and keep the name of the retailer store and products in the mind of the consumer. the

importance of this study lies in it's looking at the impact of rewards offered to

customers, as one of the major presentations to convince the customer that organization

focuses on customer orientation.

4- Objectives of the Study:This study aims to achieve the following objectives:

1- to identify the kinds of rewards offered by the fast food restaurants in Ammanto the customers.

2- To assess the degree of the impact of rewards on consumer demand for thepurchase of fast food.

3- to propose new types of rewards not offered by fast food restaurants in Amman.


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5- Hypotheses of the Study:Since customer orientation means to satisfy customers need through the

products themselves or their associated benefits, including rewards, so the

hypotheses of this study will tests the type of rewards, which indicate on theorientation of the fast food restaurants in Amman for the customer, more than any

other of rewards from the viewpoint of customers. So the hypotheses will tests three

types of reward offered to customers, to identify which of them is the greater

indicator of the customer orientation.

HA1: Customers with card for six months pay a price much lower than the

customers without a card for the meals, is evidence of the customer orientation.

HA2: Buying a meal and getting a small one for free, indicates to customer

orientation.

HA3: Providing gifts and games for children, shows that the restaurant follows the

strategy of customer orientation.

6- The study modelFigure 1 shows the independent variables and dependent variable of the study.

Figure 1: Study independent variables and dependent variable

Procedural definition of terms.

Cards for lower prices: some restaurants distribute marketers out of the door, to

visit institutions and homes to sell coupons of up to six months in most cases, to get the

coupon holder to a cash discount of the prices of the meal, not getting by customers

who do not hold these coupons.

Getting a small meal for free: a lot of fast food restaurants, announce that it

provide a smaller meal that the main meal for free with every meal purchased.

Gifts and games for children: because children and teenagers are fond of eating

fast food, restaurants have become offers for this category of customers, some free gifts

Independent variables

-Card for low prices-Providing small meals for free-Gifts and games for children

Dependent variables

Customer orientation


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when buying a meal or give them the chance to play free on the playing machines

located in the yard of the restaurant.

7- Literature Review and Theoretical Background

7-1 Customer Orientation

Customer oriented concept means, that the organization's focusing on customer

needs and customer service, and this requires from the organization to engage in

creating market information , and dissemination , and response for them (Brady and

Cornin,2001) , in the marketing literature, some authors had defined three basics help

implementing customer orientation . Kennedy et al (2003) pointed out that customer

orientation theory has considered that these three pillars are: senior leadership,

interfunctional coordination, and market intelligence.

7-2 senior leadership: as the researchers expected they found that the role of the

senior leadership in transformation to a customer orientation is a motivator role, in this

case, senior leaders, become district's officials communicated their commitment, to the

transformation, and implemented processes for leading the changes in the entire

organization.

7-3Interfunctional coordination: the literature of customer orientationdiscussed the need to focus the efforts of the organization to customer satisfaction

while meeting organization objectives, through adding value to the final customer.

7-4 Market intelligencesimply means the use of market data in decision making

process, in order to take right decision that meets effectively the market demands. To

compare between trained employees and untrained employees in their understanding of

customer orientation (Forst, 1999) has conducted a survey with a focus group of 70

individuals, and the data were collected from 564 trained employees and 345 untrained

municipal employees. The survey aimed at assessing perceptions related to change and

the organizational climate which impede or facilitate the employee's use of total quality

training. The results showed that employees who were not allowed to transfer and

applying training recorded significantly less customer orientation, than, those who

untrained. In this regard (Huang and Yuh-Liu, 2009) reported that customer orientation

can be created through multiple sales channels.

Organizations can create the desired customer experience, and the emergence of

strategic intentions to manage customer relationship by relying on customer orientation

approaches. And rewarding management beside customer orientation, encouraging


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information sharing helps in resources coordination. According to (Zinkhan,2002) some

organizations offer products services to the customer which include an incentive or

reward through issuing a credit card, and to ensure the repeated use of the credit card by

declaring the credit card and user may earn for example a box of chocolates which form

an added value to the customer.

7-5 Fast food: from promotional perspective

Fast food meal can be defined as a meal containing the instant foods, such as

shawarma, sandwiches, burgers and falafel, pastries, pizza and fried chicken pieces,

with soft drink or cup of juice, sliced of fried potatoes. And the most important thing

that distinguishes it does not contain the fruit or salads, and it eaten in hurry. Children

and teenagers are the most popular people on eating junk food (www.6abib.com)

Features of fast food including, speed of preparation, and get it. it s also an alternative

to cooking at home , which has become rare these days, due to changes in lifestyle.

Fast food means big business in this area historically, hamburgers and pizzas

were the leaders in this way, but these two European dishes had not considered from

fast food, until Richard and Maurice McDonald opened the world's first fast food

restaurant in San Bernadino, California, in 1948. Fast food is the term given to several

items that can be prepared and served quickly. Fast food indicates to food sold in

restaurants or stores, which is quickly prepared and delivered to the customer in

packaged form for take out or as in the American culture '' take away' .Fast food

phenomenon evolved from drive-in restaurants that established in southern California

in early 1940. And because the restaurants wanted to take advantage of the rise of the

number of cars in the region, they have designed restaurants that allow a person to

request a meal and eaten, without leaving his car(www.famouswhy.com).

For Amman, as a big city there are about 24 fast food restaurants located in different

areas of the city (www.visitjordan.com). These restaurants promote their products

through different advertising means, such as newspapers, advertising brochures, roads

advertisements and posters on public transport, in addition to providing different kinds

of rewards in the form of free meals, add-ons free of charge for a meal , such as soft

drinks, and gifts for kids , as are some, provides rewards through the provision of

coupons to customers, so the price of the meal is less than the price without coupons,

but the restaurant ensures repeat the customer to purchase throughout the period

covered by these coupons, which is usually six months. In this regard, (Brant, 2008) has
http://www.6abib.com/http://www.famouswhy.com/http://www.visitjordan.com/http://www.visitjordan.com/http://www.famouswhy.com/http://www.6abib.com/


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conducted a survey to evaluate the impact of rewards programs on customer behavior in

the retail sector. The sample consisted from 1000 U.S consumers. Respondents who

completed the survey totaled 500, with only 46 respondents and 46 of respondents have

completed the survey about fast food rewards. The researcher has listed, the

components of, the fast food rewards program, ranking as their importance from the

sample perspective, as shown in the Table 1 below.

Table 1. Fast food reward program

Ranks Preferred rewards ( from most to least preferred) Percent receiving

rewards

1 Free merchandise or upgrade 67%

2 Immediate rewards /discounts and the point of sale 11%

3 Coupons for discounts on total purchase 22%

4 Cash back 7%

5 Discount prices 15%6 Special member-only benefits 15%

7 Coupons for discounts on specific items 48%

8 Points or miles redeemable for merchandise or upgrades 17%

9 Discounts or rebates on gas 2%

10 Prepaid /gift cards 11%

11 Money added to a prepaid /gift card 2%

N=46

The results of the survey also showed the following:

Only 6% of consumers belong to rewards programs, and consumers who aremembers of the fast food rewards programs, and 48% of the members are loyal to fast

food stores.

The rewards provided by fast food stores, do not always match the memberspreferences.

8- Research methodology:This research has been completed in accordance with the descriptive analytical

approach to assessing the impact of rewards programs offered by fast food restaurants

to the customers, in the implementation of customer orientation.

8-1 The Study Population and Sample:

The study population consists of the attendees fast food restaurants located in the

University Of Jordan Street, and in Shmeisani area in Amman. And in order to obtain a

representative sample, the time between 2PM-4 PM was chosen, where a sample of 100

consumers was chosen of both sexes and different ages.


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8-2 Data Collection:

secondary data was collected from the literature and the internet, while primary data

was collected by using a questionnaire distributed on the respondents, in order to

ranking of their preferences to the rewards granted by the fast food restaurant.

8-3 Data Analysis and Findings.

Table 2 below shows the distribution of the sample by age:

Table 2

The sample distribution by age

Ages Frequency Percentage

Less than 20 42 42%

20-less than 25 31 31%

25- less than 35 18 18%

35- less than 45 8 8%

45 and older 1 1%

Total 100 100%

We can see that the majority of respondents are young people who did not

exceed twenty years (42 respondents), while the lowest number of respondents, is one

of the categories 45 and older.

Table. 3

The sample distribution by sex

Sex Frequency Percentage

Male 69 69%

Female 31 31%

Total 100 100%

We note that the majority of the sample is males.

Table.4

Distribution of the sample as the most preferred rewards.

Rewards Frequency Percentage

Cards (coupons) for lowerprices

17 17%

Small meal for free 35 35%

Gifts and games for children 48 48%

Total 100 100%

We conclude that 48% of the sample is buying fast food because the restaurant is

distributed gifts to children. And only 17% for coupons programs.


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Table. 5

The distribution of preferred rewards by age and its impact on customer

orientation

Rewards

Age

Coupons Free meal Gifts for children Chi-Square

test

(P)

Less than 20 ----- ---- 42 0.003*

20->25 7 18 6 0.012*

25-> 35 6 10 --- 0.020*

35->45 3 7 --- 0.028*

45 and older 1 --- --- 0.003*

Total 17 35 48 0.000*

From the above results, young people prefer gifts more than other rewards for

feeling more satisfied. All Chi-square results show significant differences due to the

age variable in preferring fast food rewards.

9- Conclusion:Through the questionnaire, which consisted of three questions, which covered three

types pf rewards used in this research, in addition to demographic characteristics of the

participants, was reached to the following results:

a. What drive young people to buy fast food from particular restaurants is the giftdistributed by the restaurants.

b. The main results are that rewards, especially '' gifts for children'' play asignificant role in customer orientation.

10- Recommendations:Researcher offers the following recommendations for the fast food restaurants:

1- Given what is said that fast food is unhealthy, restaurants must be provided withmeal of some vegetables, or fruit in their reward programs.

2- There is a kind of rewards- I did not see it working as a researcherwhich is:buy three meals, and get the fourth free.

11- References:

[1] Copell, Patrick (2007). What does customer oriented mean?

[2] Brady, Michael and Cronin, Joseph, J (2001). Customer orientation, effects on

customer service perceptions and outcome behaviors.

[3] Journal of Service Research , Volume 3, NO.3, February 2001.PP.241-251


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[4] Kennedy, Karen et al (2003). Implementing a customer orientation: extension of

theory and application. Journal of marketing, Vol.67 (October, 2003). PP 67-81.

[5] Forst, Jamie et al (1999). Change, transfer climate and customer orientation.

Institute of behavioral research.

[6] Huang, Shan- Yan and Yuh Liu, Han (2009). A perspective of two dimensions

process integration customer relationship management, Driven Business

Model. ICIS 2009, November 24-26, 2009 Seoul, Korea.

[7] Zinkhan George (2002). Relationship marketing: theory and implementation.

Journal of market focus management, 5, 83-89(2002).

[8] www.6abib,com

[9] www.visitjordan.com

[10] Brant, Sharon (2008). Fast Food (QSR) rewards programs consumer insight.

[11] Alghad Newspaper, 17.10.2010
http://www.6abib%2Ccom/http://www.visitjordan.com/http://www.visitjordan.com/http://www.6abib%2Ccom/

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