Encouraging Supply Chain Networks and Customer Loyalty in Global Supply Chain

Encouraging Supply Chain Networks and Customer Loyalty in Global Supply Chain

DOI: 10.4018/978-1-4666-9894-9.ch006
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This chapter aims to encourage supply chain networks and customer loyalty in global supply chain, thus distinguishing the theoretical and practical concepts of supply chain management (SCM) and supply chain networks; the multifaceted applications of supply chain network design (SCND); the overview of customer loyalty in global supply chain concerning customer value, customer satisfaction, switching barriers, customer loyalty programs, and customer-company identification (CCID); and the linkage between customer loyalty and supply chain networks in the retail setting. Encouraging supply chain networks and customer loyalty is critical for modern organizations that seek to serve suppliers and customers, increase business performance, strengthen competitiveness, and achieve continuous success in global supply chain. The chapter argues that encouraging supply chain networks and customer loyalty has the potential to improve organizational performance and gain sustainable competitive advantage in global supply chain scenarios.
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The increased span of supply chains and emerging global distribution networks along with increasing competition in the production environment have highlighted the importance of optimizing the supply chain networks to enhance their performance and increase their responsiveness to the customers’ changing demands (Badri, Bashiri, & Hejazi, 2013; Goetschalckx, Vidal, & Dogan, 2002). The fundamental objective of SCM is to develop effective supply chain networks among businesses toward creating supply chain networks (Kopczak, 1997; Lee & Ng, 1997). SCM focuses on the agility and responsiveness in supply chain networks s for quickly reacting the changing market requirements (Roh, Hong, & Min, 2014; Wu & Barnes, 2011). Many firms cooperate with customers through a variety of information and material flows toward achieving a balance between supply and demand (Cheng, Chen, & Chen, 2014).

A loyal customer is regarded as a type of competitive asset for an organization (Dekimpe, Steenkamp, Mellens, & Abeele, 1997). Customer loyalty has a tremendous impact on business profits for business survival (Oliver, 1999; Olsen & Johnson, 2003) and paves the way for modern organizations to achieve sustainable competitive advantage (Grönroos, 2009; Gummesson, 2008). Keeping a long-term customer relation is a challenge for business practitioners (Grönroos, 2009). The consensus in business literature is that firms benefit from the creation of customer loyalty (Dick & Basu, 1994; Jacoby & Chestnut, 1978). Improving customer value and workgroup performance requires the adoption of the appropriate human resource practices in order to enhance the level of innovation (Kasemsap, 2013). Customer value, customer satisfaction, and brand loyalty have the strengths to mediate the positive effect on CRM performance (Kasemsap, 2014).

Key Terms in this Chapter

Customer Value: The difference between what a customer gets from a product, and what he or she has to give in order to get it.

Customer Satisfaction: The degree of satisfaction provided by the goods or services of a company as measured by the number of repeat customers.

Customer: Individual that buys goods or services from a store.

Supply Chain Networks: The integrated patterns of processes utilized within a facility and over distribution connections, adding value to customers by improving the delivery and manufacturing of products.

Satisfaction: The customer level of approval when comparing a product’s perceived performance with his or her expectations.

Customer Loyalty: The likelihood of previous customers to continue to buy from a specific organization.

Customer Service: All interactions between a customer and a product provider at the time of sale, and thereafter.

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