Halal Logistics Performance and Customer Loyalty: From the Literature Review to a Conceptual Framework

Customer loyalty has become the most important goal of companies’ logistics and supply chain divisions. In a Muslim country such as Indonesia, halal products have the potential power to foster customer loyalty. Halal status highly depends on halal logistics, especially with regard to halal meat products. A good halal meat product depends on good halal logistics performance. The influence of logistics performance on loyalty has been investigated in many marketing studies, but research in the field of halal logistics is rare. The research gap in this area has become the background for this conceptual paper. The main purpose of the paper is to provide a literature review of halal logistics performance and customer loyalty, thereby establishing the issues concerning both subjects. The review also provides a conceptual framework for the study, including other factors affecting customer loyalty, such as halal supplier service quality, perceived service value, and customer satisfaction.

Customer loyalty; Customer satisfaction; Halal logistics; Logistics performance; Perceived service value

Many logistics and supply chain management researchers have claimed that customer loyalty has economic  and social impacts on companies (Gwinner et al., 1998; Mimouni-Chaabane & Volle, 2010). This is because loyal customers help to maintain a company’s market position, and often repurchase its products, even premium ones (Ngobo, 2016).  That is why establishing loyalty is important as a strategic goal in all service (Gustafsson et al., 2005; Cooil et al., 2007). Therefore, many scholars have attempted to ascertain what factors contribute to loyalty (Zeithaml et al., 1996). One of these is logistics performance. This factor is investigated by researchers such as Mentzer et al. (2004), Richey et al. (2007), Stank et al. (2003), Day (2000), and Mattila (2001).

The relationship between logistics performance and loyalty is explained by Mentzer et al. (2004), Lai et al. (2009) and Hartono et al. (2017). They state that improving product quality through improvement in the performance of logistics activities will increase customer satisfaction. This means that logistics performance, which is one of the main factors influencing customer satisfaction, will in turn affect the loyalty of customers. Stank et al. (2003) concur that good logistics performance will create value for customers. However, firms must know exactly what type of logistics is useful in the market. Muslim countries such as Indonesia and Malaysia require halal products, which need halal logistics to maintain their halal status. This is especially the case for meat products, which need more complex halal logistics than other products because halal meat status starts from feeding cattle with halal food, up to halal meat displays in traditional and modern markets. Good halal logistics performance will improve halal meat product quality and create greater Muslim customer satisfaction. The research of Kumar et al. (2013), Aktepe et al. (2015), Kaura et al. (2015), Islam et al. (2016) has proven that customer satisfaction has a positive and direct effect on customer loyalty.

However, because halal logistics is still a new topic for scholars and practitioners, the amount of research in this area is still limited (Jaafar et al., 2016). Research in halal logistics and marketing still concerns customer perception (Tieman et al., 2013; Alqudsi, 2014), market analysis (Lever & Miele, 2012), and retailer behavior (Kalantari et al., 2014). In this study, other factors that influence customer loyalty are discussed in five sections. Section 1 (the introduction) discusses the conceptual frameworks of customer loyalty and halal logistics performance developed in previous studies. The remainder of the study will be organized as follows: Section 2 discusses the halal meat market; the research methodology is presented in section 3; Section 4 presents the discussion; and the study is summarized in section 5 together with the conclusion.

The relationship between customer loyalty and logistics performance for halal meat products is an uncommon topic in the marketing research and halal logistics literature. This study offers a conceptual framework developed through relevant logistics and marketing literature. It will be very interesting for other researchers to improve this framework by taking a closer look at other factors that can influence customer loyalty. Moreover, this study could be investigated in greater detail to prove and improve the factors involved. The publication from research methodology can also be explored in future studies to fill the knowledge gap in this subject.

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