Establishing Profitable Customer Loyalty for Multinational Companies in the Emerging Economies: A Conceptual Framework

• DOI: 10.1509/jim.12.0107
• Publication Date: 2012-11-08T22:17:38Z
• Authors: V. Kumar; Amalesh Sharma; Riddhi Shah; Bharath Rajan
• Keywords: 9. Industry and infrastructure; 8. Economic growth; 0502 economics and business; 05 social sciences

It has been observed that some firms succeed in their attempts to achieve business goals in emerging economies, whereas others fail. To understand the reasons for this phenomenon, the authors conduct a qualitative study where they interview 42 managers of multinational companies from the United States, Canada, Europe, Asia, and Australia. From the insights gleaned from these interviews and the available literature, they propose a conceptual framework that identifies the possible factors that would drive the creation of both a profitable and a loyal customer base (termed “profitable customer loyalty” in this study) in the emerging economies. The influencing factors are categorized as customer-specific variables, marketing-mix variables, and firm-specific variables. From these factors, the authors advance research propositions that discuss the potential relationships with profitable customer loyalty. One of this study's key contributions is the proposal that multinational companies monitor the suggested factors and assess a degree of comfort before formulating strategies in the emerging economies. Further research can focus on the empirical validation of the proposed framework.