Recognising customers' patterns of bus service patronage using a loyalty framework

• A loyalty-based study aims to provide an operational method of segmenting bus service market.
• The conceptual loyalty-based market typology for bus service was supported.
• Segments of loyalty and non-loyalty were found to be dominant over the market.
• Both demographic and social variables were significant in separating market segments.

With the aim of identifying typical characteristics of travellers, traditional segmentation approaches were based on socio-demographic variables. However, the approaches could not reveal the factors motivating individual behaviour. This result led to an emerging interest in psychological research models that are adhered to the decision-making process. Among various related theories, the concept of loyalty was attractive because the major purpose of establishing a loyalty concept is to recognise a customer's pattern towards a given service. However, there were few efforts aimed at determining market segments based on a loyalty framework. In addition, there was no consensus achieved on theoretical loyalty typology due to different empirical findings in different market contexts. This study aims to be the first loyalty-based attempt to provide an operational method of segmenting bus service market. Seeking practical implementation, another focus of this study is to determine typical characteristics of the market segments. Analyses that included cluster techniques were conducted on questionnaire data collected from 333 respondents in Hidaka city, Japan. A cross-classification between relative attitude and service patronage was successfully established, dividing the market into four segments. Segments of loyalty and no-loyalty were observed to be dominant over the remaining market. In contrast, the spurious loyalty segment was small and insignificant. An expansion of the latent loyalty segment was also observed when moving from the intention phase to the actual behaviour phase. Notably, not only demographic factors but also social awareness variables including environmental concern and elderly support were observed to be significant in distinguishing customer segments from one another.