An examination of the role of technical and non-technical innovation on the customer loyalty

Customer loyalty strongly depends on the customer satisfaction which is the measure of the fulfillment of their expectations and needs with a pleasurable experience of the product, process or service. Among many other strategies, the companies use innovation for ensuring the customer satisfaction with their product or service, as it is a highly competitive market today, and new ideas in any manner are appreciated if they are more effective to the customers. It is crucial for the companies to understand how the innovation influences the perceptions of their target market in order to invest in the innovation efficiently. The focus of this dissertation is on evaluating the role of technical and non-technical innovation on the customer loyalty in Turkey and Germany. The customer loyalty has been evaluated using the variables technical and non-technical innovation capabilities, whereas the influence on loyalty has also been assessed through the variables intellectual experience, affective experience, reputation, word of mouth, new market penetration and differentiation. The study is based on primary research method where the extensive literature review was conducted to develop a conceptual framework and a questionnaire for survey is adapted from a scholar, Dr. Pantea Foroudi's survey which is already done on the similar topic. This questionnaire was then used for survey, which was administered to collect primary data. Simple random sampling has been used to draw a sample of 114 customers from Turkey and 106 customers from Germany. Frequency distribution analysis, Mann Whitney U test, correlation test and multiple regression analysis have been conducted to reach the findings. The result reported that males are more loyal to innovative companies in Germany, whereas females are more loyal in Turkey. Most of the respondents who are loyal to innovative companies have age between 20-30. It has been found that majority of the customers from both the countries are loyal to the innovative companies and have positive perceptions about the quality and value for price offered by them. The technical innovation of the companies has been found to be positively associated with the customer loyalty as it effects on the customers' intellectual and affective experience. Similarly, new market penetration and differentiation has also positive influence on customer loyalty. The customers reported that they find innovative companies more trustworthy and reputable. The comparison of customer responses for Germany and Turkey has revealed that the German consumers focus more on innovation as compared to those of Turkey. Recommendations have been suggested in the light of findings of the study.