The impact of culture and intensity of industry rivalry on the effectiveness of digital marketing usage in promoting loyalty program participation

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Research revealed that next to LP design attributes, effective program communication and environmental factors impact the success of the program. However, which digital marketing mechanisms contribute in increasing the LP participation likelihood? This study focuses on which digital marketing mechanisms contribute in increasing LP participation among shoppers. In addition, it investigates the moderation effects of cultural characteristics, based on the dimensions of Hofstede, and intensity of industry rivalry. Hereby, the optimal digital marketing mix is inferred based on outcomes of this research. This study is done on behalf of BrandLoyalty, one of the most successful loyalty program executors worldwide. The questionnaires used for this research were distributed by BrandLoyalty, in different countries worldwide, among different retail chains. By means of running a logistic regression analysis, the outcomes of 9456 respondents were analyzed. This led to results on the impact of digital marketing mechanisms on LP participation, and the impact of the moderator variables; individualism score, long-term orientation score, and retailer concentration score. Based on the findings, it can be concluded that, the usage of mobile apps, email marketing, social media posts by the retailer, as well as by family, friends, and family, all have a significant effect on LP participation. More specifically, this means that a shopper, which have seen any of these digital marketing mechanisms about the LP, has a higher likelihood to participate in the LP. However, focusing on the moderation variables, only app contributes significant on LP participation for countries scoring high on individualism, and app and email for countries scoring high on long-term orientation. Contrary, these significant effects impact the likelihood of participation negatively, which means a decrease in the likelihood of participation. Similarly for countries scoring high on retailer concentration, for which email marketing and all kinds of social media were negatively significant, weaken the likelihood of LP participation when integration these digital marketing mechanisms. This study provides valuable insights for BrandLoyalty, and other loyalty marketers. The insights are relevant for setting up the digital marketing strategy for a LP. Regarding findings, the use of a retailer’s app is the most effective tool. Furthermore, a LP can be composed which takes the cultural, and environmental differences per country into account leading to an increase in LP participation among shoppers
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