PROMOTION, SWITCHING BARRIERS, AND LOYALTY

This paper investigates the causal relationships among promotion effects, switching barriers, and loyalty in the department stores. The relationship between switching barriers and loyalty reveals partially the same results as the switching barriers theory of Jones et al. (2000). The reasons arise from “too often” and “too similar” sales promotion programs of competitive department stores in Taiwan, leading the promotion effects to not contribute to the attractiveness of competitors. The promotion effects have a positive and significant influence on loyalty, which is consistent with the prior literature. Promotion effects are also the most important weight to loyalty in our tested model but it reveals a seeming loyalty, because the loyalty depends on the reward of promotion. The negative relationship between promotion effects and attractiveness of alternative supports the promotion effects, which can lower the attractiveness of competitors, but these similar promotion plans are not attributed to interpersonal relationships.