The loyalty program in the hotel industry has become a key marketing tool to build customer loyalty and to increase customer assets. However, little research has examined the factor that determine how reward program is evaluated by customers. Thus, th...
The loyalty program in the hotel industry has become a key marketing tool to build customer loyalty and to increase customer assets. However, little research has examined the factor that determine how reward program is evaluated by customers. Thus, the purpose of this study is to investigate the effects of three variables; rewards type (utilitarian vs. hedonic), effort type (work vs. pleasure) and temporal distance (near future vs. distant future). In order to test this research, a 2X2X2 between-subject experiment design was used. The finding of this study demonstrated 1) consumers have a relative preference for a hedonic reward over a utilitarian reward when their effort is invested in the context of work rather than pleasure 2) consumers have a relative preference for a hedonic reward over a utilitarian reward when their accumulated point will be expired in the distant future as opposed to the near future 3) Temporal distance of the point expiration in distant future shift preference in favor of a hedonic reward over a utilitarian reward when consumers are rewarded for purchasing products or service with pleasure related reason. In addition, preference shift to a utilitarian reward from a hedonic reward when consumer purchased product for work related effort in the near future. On the basis of the results, valuable insights were provided to help hotel managers design effective and customer-oriented reward program.