A catastrophe model for developing loyalty strategies: a case study on choice behaviour of pick-up point for online shopping

Abstract

Convenience stores in Taiwan have had remarkable successes with retailing delivery services by integrating e-commerce and logistics systems to form a new retail delivery model: |On-line shopping with pick-ups at convenience stores|. Though ingenious, intensified competition and increasingly complex customer behaviour, it has become increasingly difficult for marketing practitioners to maintain customer loyalty. To help solve this problem, this study explores the relationships between the service quality and switching cost on choice behaviour using a catastrophe model. It also applies general multivariate methodology for estimating catastrophe model II to actual market data to demonstrate the model|s use in choice behaviour. The present analysis shows that, service quality and switching cost are the two major factors that influence choice behaviour, and that a catastrophe phenomenon can occur with a high switching cost.