BRAND LOYALTY
Definition
The American Marketing
Association (2011) defines brand loyalty as:
The degree to which a
consumer consistently purchases the same brand within a particular product
class.
Definition
The American Marketing
Association (2011) defines brand loyalty as:
The degree to which a
consumer consistently purchases the same brand within a particular product
class.
Brand-
A distinguishing
symbol, mark, logo, name, word, sentence or a combination of these items that
companies use to distinguish their product from others in the market
Brand Awareness-
The likelihood that
consumers recognize the existence and availability of a companys product or
service.
Creating brand
awareness is one of the key steps in promoting a product.
Brand Equity-
The value premium that
a company realizes from a product with a recognizable name as compared to its
generic equivalent.
The American Marketing
Association (2011) defines brand loyalty
The degree to which a
consumer consistently purchases the same brand within a product class" ◦
AMA - Sales Promotion Definition
"The situation in
which a consumer generally buys the same manufacturer-originated product or
service repeatedly over time rather than buying from multiple suppliers within
the category"
Brand loyalty Includes:
• Attitudinal
Components
• Behvioural
Components
• A mixture of both leads to the Composite
Components of Brand Loyalty.
True Brand Loyalty-
Spurious Loyalty: When
customer repurchase a brand due to situational constraints such as:
I. vendor lock-in,
II. a lack of viable
alternatives,
III. Inertia due to
habit or out of convenience.
• True brand loyalty
exists when customers have a high relative attitude toward the brand which is
then exhibited through repurchase behavior.
Rate of Usage • Based on rate of usage,
suppliers often segment their customers into:
I. Heavy Users
II. Medium Users
III. Light Users
True Brand Loyalty •
Spurious Loyalty: When
customer repurchase a brand due to situational constraints such as:
I. vendor lock-in,
II. a lack of viable
alternatives,
III. Inertia due to
habit or out of convenienc
Types of Loyal Customer
• Hardcore Loyal
• Split Loyal
• Shifting Loyal
• Switchers(e.g. Deal
Prone)
Loyalty - Is customer
is committed to brand?
Hard-core
loyals -
Buy the brand all the time.
Split loyals -
Loyal to two or three brands.
Shifting loyals - Moving from one brand to another.
Switchers -- No
loyalty
Deal-prone - looking
for bargain
Vanity prone -
looking for something different
• Acceptance of
product extensions.
• Defense from
competitors cutting of prices.
• Creating barriers to
entry for firms looking to enter the market.
• Customers willing to
pay high prices.
• Existing customers
cost much less to serve.
• Potential new
customers.
Allow you to charge a price premium compared to competitors with less brand 12 equity.
Strong brand names simplify the decision process for low cost and non-essential products.
Brand name can give comfort to buyers unsure of their decision by reducing their perceived risk.
Maintain higher awareness of your products.
Use as leverage when introducing new products.
Often interpreted as an indicator of quality.
High Brand Equity makes sure your products are included in most consumers’ consideration set.
Your brand can be linked to a quality image that buyers want to be associated with.
It can lead to greater loyalty from customers. Offer a strong defence against new products and new competitors.
It can lead to higher rates of product trial and repeat purchasing due to buyers’ awareness of your brand, approval of its image/reputation and trust in its quality.
Money can be saved on advertising and research and spent elsewhere in the organisation. -
There will be constant demand for the product and regular sales which will help cash flow. -
The brand will create a good name in the market if it is seen to be popular. -
Profits should rise each year if new customers are still being attracted.
Dramatic effects on profitability
Longer tenure as a customer
Lower sensitivity to price increases
Factors affecting Customer’s Loyalty
Behavioral Loyalty:
1. Choice reduction,
Habit
2. History with the
company
• Attitudinal Loyalty:
1. Satisfaction
2. Emotional Bonding
3. Trust, Risk
Reduction
How to Boost Brand Loyalty
• Deliver value
• Segment loyalty
levels and reward accordingly. (By giving Loyalty Points)
• Run integrated
promotions campaigns
• Encourage sharing of
reviews and customer success stories(word of mouth marketing)
Brand loyalty
It is when a customer remains
faithful to one brand only by continuing to buy from them solely out of choice
rather than any pressure being applied from the organisations.
• When consumers become committed to a brand and make repeat purchases 2 over time.
• Brand loyalty is a result
of consumer behaviour and is affected by a person's preferences.
• Loyal customers will
consistently purchase products from their preferred brands, regardless of convenience
or price.
• Companies will often use
different marketing strategies to cultivate loyal customers, be it is through
loyalty programs
i.e. rewards programs
How To Build Brand Loyalty
Brand loyalty can be created
if the organisation follow six simple steps:
1. Be the BEST: If it is obvious to customers that your product or service is the best on the market they will choose you over competitors.
2. Create a sense of
BELONGING: Give customers a reason to want to purchase your product with a
sense of pride as if it is make specifically for them.
3. Be RELIABLE: Make sure the
product always does what you say it will, don’t give customers a reason to stop
buying.
4. Be ACCESSIBLE: The product
should be affordable and readily available for the customers you are targeting.
5. Connect with your
AUDIENCE: Make your audience feel valued as a customer and important to the
company. Keep in contact regularly to remind them.
6. REPEAT: Ensure the product
evolves with the customer and continues to suit the needs of the buyers.
Factors affecting brand loyalty
Different measurements of
brand attitude and purchase habits are expressed by 3 brand loyalty.
The distribution decision
of the company is also valuable element
It is very important to
provide the product to the consumer at convince place.
Brand loyalty has been
defined as an attitudinal and behavioural concept
Relationship between brand
loyalty & uniqueness that was not statistically significant indicating that
the business people should not focus their efforts on the uniqueness of the
brand name because this factor does not affect brand loyalty at all.
Brand loyalty is determined
by several distinct psychological processes of the consumers and entails
multivariate measurements.
Product features (Fragrance
/ Skin care / Germ fight features / Colour) is one of the most important
factors that affect brand loyalty.
Multidimensional theory of brand loyalty
Multidimensional theory is
determined by several distinct psychological processes and it entails multivariate
measurements.
Simple measurement in terms
of frequency and pattern of repeated brand purchase behaviour is not sufficient
to fully represent the brand loyalty construct.
In fact it drastically
limits the realm of products and services in which brand loyalty exists but
cannot be measured by repeated observations.
For example, in the case of
once-in-a-lifetime consumer decisions for housing and mobility behaviours.
Brand relationship
A consumer brand
relationship also known as a brand relationship, is the relationship that
consumers, think, feel, and have with a brand.
Brand relationship is the
interactions between a brand and a customer
It reflect similar
characteristics of relationships between people, such as love, connection,
interdependence, intimacy, and commitment.
Different concepts of brand relationship
Brand attachment : it is define as “the emotional connection between humans and brands.”
Thus, just as people can be
attached to a person, they can also by and for a host of reasons become
attached to a brand.
Three elements into the
forming of a brand attachment are: Affection: (They got me with their names.)
Connection: (with their
sustainable practices)
Passion: (for my favourite
flavours)
Brand community :
A brand community is a
community formed on the basis of 9 attachment to a product.
Recent developments in
marketing and in research in consumer behaviour result in stressing the
connection between brand, individual identity and culture
Brand hate : Brand hate, a
new marketing construct that assesses consumers’ 10 negative attachment to a
brand, can be considered as the ‘‘dark side’’ of consumer preferences
Brand hate can be a serious
risk for companies, since it can damage the brand image and reputation of the
company.
Brand engagement : it is
the process of forming an emotional or rational attachment between a person and
a brand.
Engagement with the brand
means real emotional engagement with the brand should be the ultimate objective
consumers “see” the brand
as better meeting the expectations they hold for the Ideal in the category
where the brand competes.
Brand equity
Brand equity is a phrase
used in the marketing industry which describes the value of having a well-known
brand name
It is based on the idea
that the owner of a well-known brand name can generate more money from products
with that brand name than from products with a less well known name
A brand's power derived
from the goodwill and name recognition that it has earned over time, which
translates into higher sales volume and higher profit margins against competing
brands
How to Measure Brand Equity
To measure the value (utility) of a product’s features and price level and also 14 measure the overall utility of a product when including brand name.
The difference between total utility and the utility of the product features is the value of the brand.
In other situations, the
utility of the brand is measured directly and added to the feature utilities to
produce an overall utility for the product.
Besides utilities,
contributing factors such as current awareness levels of each Brand, overall
perceptions of each Brand, and Brands currently used should be measured
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