An Esoteric View on Brand Loyalty. Rashmi Ranjan Parida School of Management, Centurion University of Technology and Management, India

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1 19 An Esoteric View on Brand Loyalty Rashmi Ranjan Parida School of Management, Centurion University of Technology and Management, India Abstract The ultimate objective of marketing is to satisfy customer needs, while ensuring profit and fulfilment of organizational objective. Brand loyalty is one of such means through which the ultimate marketing goal can be achieved. Brand loyalty bears many tangible and intangible benefits in terms of market share, brand image, permanent customer base etc. The key objective of the article is to get an overall understanding about brand loyalty. The importance of brand loyalty as understood by different scholars working in the area of marketing has been reviewed for the purpose. The article also attempts to assess and discuss various factors that have a bearing on the brand loyalty. The evidences are enough to conclude that brand loyalty is a multi dimensional construct, where enormous scope is there to explore more on the subject. The paper is a teaser for the researchers to delve deep into the topic of brand loyalty. Keywords: Brand loyalty, brand, trust, brand personality, risk aversion 1. Introduction In today s world of consumerism, the presence of brands is ubiquitous. A brand could be a name, sign, symbol, any visual, tune or other such things that distinguishes products of one marketer (seller) from that of others. The history of brands and branding dates back to centuries when live stock owners used to impress red hot irons (branding irons) with different symbols onto the cattle skin, in order to identify (the process was branding). Thus the term brand is derived from the term brandr which means to burn. Brands take years to be built and it carries many tangible and intangible values for the marketer. Whether the marketers choose production, product, selling, customer orientation, relationship or societal marketing approaches without visible brands organizational objectives are hard to be achieved. When building and sustaining brands are crucial, there is absolute bliss if customers accept the brands with open hands and continue to patronage the same forever. Such loyalty is the ultimate desire of any marketing effort. Organizations with substantial number of loyal customers are believed to have higher market share which eventually leads to higher return on investments (Buzzell et al., 1975; Raj, 1985; Reichheld and Sasser, 1990). In many cases, the level of brand loyalty is the testimony of the successful marketing strategy (Knox and Walker, 2001). In this era of highly competitive markets with increasing uncertainty, brand loyalty is a central element of marketing strategies and tactics (Fournier and Yao, 1997). Brand loyalty generates many benefits such as higher barriers to entry for competitors, better equipped to respond to competition, higher sales and profits, and the customer s lower response to alluring efforts of competitors (Delgado-Ballester and Munuera-Alema n, 1999). Many advocates of competitive advantage believe that brand loyalty could be a tool to attain it. Brand loyal customers help in reducing marketing cost. Acquiring a new customer is about six times more costly than retaining one. For decades brand loyalty has been able to arouse

2 20 enormous interest among both practitioners and researchers. The article at hand makes an attempt to encapsulate many such researches done regarding brand loyalty. It is also an attempt to draw a holistic understanding about the subject. The article aims to draw a Delphic understanding on brand loyalty that is ultimate goal of any marketer. It also attempts to discuss elaborately major definitions of the concept along with key factors having significant influence on the concept of brand loyalty. The main discussion of the article is divided into three broad sections. The first section provides an overview of the key definitions and significant aspects of brand loyalty, while the second section emphasizes on the prominent factors that have some bearing on brand loyalty. The last section provides some concluding remarks. The methodology adopted to achieve the objective is through critical analysis of literature pertaining to the subject already published in renowned refereed journals. Effort is made to review literature from across marketing streams to draw inferences. 2. Decoding Brand Loyalty Brand Loyalty which has gained significance over the years was first brought to public notice by the seminal work of Copeland in 1923, published in the first issue of Harvard Business Review. The concept received significant attention among scholars of marketing in the late sixties and early seventies. Since then authors have proposed many definitions and discussed about number of factors pertaining to brand loyalty. At first it was believed that brand loyalty is simply repurchases over a long period of time (Day, 1969). There were few other researchers who believed that brand loyalty without attitudinal inclination and psychological factors is not possible to comprehend (Baldinger and Rubinson, 1996). Arguably, the most comprehensive definition was put forth by Jacoby and Chestnut (1978), who say that brand loyalty requires six sufficient conditions. It is (1) the biased (i.e., non-random), (2) behavioural response (i.e., purchase), (3) expressed over time, (4) by some decision-making unit, (5) with respect to one or more alternative brands out of a set of such brands, and (6) is a function of psychological (decision-making, evaluative) process (Jacoby and Chestnut,1978). The analysis in the article has used the definition of Jacoby and Chestnut. If the working definition is analyzed then brand loyalty is considered to be a biased response, implying thereby that there has to be a clear tendency to buy a certain brand or group of brands. Any incidental bias towards a particular brand may not assure brand loyalty. The process is not static, so some consistency is required for a certain period of time. Brand loyalty is expressed by the pattern of purchase of a decision-making unit, which could be a person, a household, or an organization. It is interesting to note that the decision maker may not be the actual purchaser. The next condition is that one or some brands are selected from a pool of brands available in the market. Such a condition implies that consumers may actually be loyal to more than one brand, a phenomenon observed by many researchers (Ehrenberg, 1972; Jacoby, 1971). But this condition also implies that there should be alternatives from which the customer can choose. The individual should have the scope to be disloyal to become loyal. Brand loyalty is a psychological function (decision-making and evaluative). Brands are chosen according to internal criteria leading to commitment towards any brand. This psychological function is a dominant topic of consumer behaviour study. At an early stage of research on the subject, it was believed that brand loyalty is synonymous to repeat purchase only, but repeat purchase cannot be that mechanical for human being. There must be some preceeding factors behind it, which could be psychological, emotional, or situational in nature. Day (1969) emphasized on action and affection for brand loyalty and divided brand loyalty into two categories: true brand loyalty and spurious brand loyalty. The spurious brand loyalty consumers may make repeated

3 21 purchases only because of situational events like the brand they purchase is the only brand available in shop. On the other hand, true brand loyalty consumers should show both psychological and affective commitments in addition to repurchase consistency. Adding to this Dick and Basu (1994) divided brand loyalty into four categories, viz., true, spurious, latent, and no loyalty. In recent times, the definition put forth by Oliver (1999) has encapsulated both behavioural and attitudinal aspects into the definition of brand loyalty. As per Oliver, brand loyalty is a deeply held commitment to re-buy or re-patronize a preferred product/ service consistently in the future, thereby causing repetitive same brand or same brand set purchasing, despite situational influences and marketing efforts are having the potential to cause switching behaviour (Oliver 1999, p. 34). If we analyze the aforesaid definition, there are few things that require some discussion. It is understandable that customer has commitment and would like to make repeat purchase, but in this competitive era, where marketers are coming up with better, cost effective and advanced offerings and the value quotient is significantly high, still the attraction is not strong enough to divert the true brand loyalty. This shows despite situational influence and better value proposition being offered by alternative brands, a customer is choosing to be loyal to a brand. Hence the process of loyalty building is quite strong and stable. Loyalty has four stages, viz. cognitive loyalty, affective loyalty, conative loyalty, and action loyalty. Cognitive loyalty is based on the mental ability to process information and understand how the particular brand is better than the alternatives available. Cognition may be based on prior knowledge or experience. In the second phase, loyalty development is more of liking or positive attitude towards the brand developed out of satisfying usages. Although commitment comes in this stage, a deeper sense is required or else, switching of loyalty is likely to happen. The next stage is conation, which is brand specific intention to repurchase (behavioural). The affect acts as a motivation for behavioural response. In the last stage, the intention is translated to action. Though brand loyalty is proved to be both attitudinal and behavioural in nature and there is a deeply held commitment for purchase and repurchase still there is scope of losing loyal customers due to many reasons. In some cases the customer ceases to use the product (like smoking), or the child grows up and no more uses the product (baby food). At affective level, the variety-seeking behaviour sometimes forces the customers to try something new. At other times the customers could be loyal to multiple brands in the same product category. The loyal customer may become disloyal if the switching incentive is too high and alluring. In such situations, cognition takes over the affection. Since brand loyalty is the interplay of multiple dimensions, it is also affected by many factors or conditions. 3. Factors affecting Brand Loyalty Brand loyalty is likely to get affected by many factors as both behaviour and attitude are liable to be influenced. In this section few such factors identified by researchers across the world have been discussed. Though the list is not exhaustive and there are several researches on-going on this subject, some are illustrated in the ensuing sections. Trust Trust in brands leads to brand loyalty (Lau and Lee, 1999). Trust is the willingness to rely on something or someone at the time of risk. This usually comes from past experiences and it usually takes time to build trust. Other studies introduced brand trust as central determinants of brand loyalty (Chaudhuri and Holbrook, 2001; Delgado-Ballester and Munuera-Alema n,

4 ). In the commitment-trust theory associated with relationship marketing (Morgan and Hunt, 1994), trust happens to be one of the most important variables in the development of long-lasting and mutually beneficial relationships. Risk aversion The research findings have proved that many customers become brand loyal to reduce the perceived risk associated with switching brands or leaving the brand (Sheth and Parvatiyar, 1995). Knox et al. (1993) found that brand risk is a significant antecedent of brand commitment that is the most crucial element of attitudinal brand loyalty. This implies a positive causal link between risk and consumer loyalty. Thus, arguably the customers who are more averse to take risk would be more brand loyals. Satisfaction Whenever the marketing offering exceeds customer expectations, the individual is said to be satisfied. Satisfaction in a particular brand of product is always a key determinant of brand loyalty. Eisman (1990) described action loyalty as the consumers satisfaction with frequent purchases of a specific brand. Assael (1993) defined brand loyalty as the repeated purchase behaviour based on consumers satisfaction with their accumulated experiences in purchasing the same brand. Several studies have underscored that an overall satisfaction level is a determinant of loyalty, either understood as a repeat purchase intention or an emotional or psychological bond (Bloemer and Kasper, 1995; Fornell, 1992). Brand Personality When brands are seen as human beings with personality traits of individuals, then they are believed to carry such personalities. Striking brand personality plays a major role in the success of a brand. It leads a customer to perceive the brand personality and develop a strong connection to the brand (Doyle, 1990). Self image congruence study among consumers (associated with brand personality) proves that there is a strong relationship between brand personality and brand loyalty (Kressman et.al, 2006). Involvement There are ample evidences for a linkage between product involvement and brand loyalty (Taylor, 1981; Park, 1996). The study conducted by Quester and Lim (2003) clearly shows that involvement is one of the important factors of brand loyalty. There are certain products where the buyer spends significant amount of time and energy (high involvement products), compared to other products (low involvement products). Usually customers by and large tend to be more brands loyal in case of products with high involvement buying. Culture Culture is the intrinsic part of life and part of our DNA. Culture has direct influence on proneness to brand loyalty (Lam, 2008). The product choices, customer behaviour, and brand loyalty have significant influence of culture on them (Denis, 1996). People having high cultural orientation are most likely to show higher degree of association, which may lead to brand loyalty.

5 23 4. Conclusions The paper has discussed well-accepted definitions of brand loyalty and critically examined them to draw an overall understanding on the subject. There are various factors that have proved to have a significant influence on brand loyalty. Thus to understand brand loyalty a multi-dimensional research is required. The summative definition proposed by this author is that: Brand loyalty of customer is a multi-dimensional construct, achieved through behavioural response, emotional attachment, and deep sense of belongingness towards the brand, resisting the temptation and performing positive action in all adverse situations. In this article some of the factors affecting brand loyalty have been emphasized. There could be many such individual factors that have not been studied yet, might prove to have significant impact on brand loyalty. Composite constructs such as psychographic and sociographic factors, comprising many individual factors may have powerful influence on the subject. Hence, there is ample scope and opportunity for future research on the subject. References Assael, H. (1993) Marketing Principles and Strategy. 2nd ed., Dryden Press, Hinsdale, IL. Baldinger, A.L. and Rubinson, J. (1996) Brand loyalty: the link between attitude and behaviour, Journal of Advertising Research, 36, pp Bloemer, J.M. and Kasper, H.D. (1995) The complex relationship between consumer satisfaction and brand loyalty, Journal of Economic Psychology, 16(2), pp Buzzell, R.D., Gale, B.T., and Sultan, R.G. (1975) Market share-a key to profitability, Harvard Business Review, 53(1), pp Chaudhuri, A. and Holbrook, M.B. (2001) The chain of effects from brand trust and brand affect to brand performance: the role of brand loyalty, Journal of Marketing, 65(2), pp Day, G. (1969) A Two-Dimensional Concept of Brand Loyalty, Journal of Advertising Research, 9, pp Delgado-Ballester, E. and Munuera-Alema n, J.L. (1999) Brand trust in the context of consumer loyalty, European Journal of Marketing, 35(11/12), pp Denis, J.E. (1996), Culture and International Marketing Mix Decisions, University of Geneva, Working Paper. Dick, A.S. and Basu, K. (1994) Customer loyalty: toward an integrated conceptual framework, Journal of the Academy of Marketing Science, 22(2), pp Doyle, P. (1990) Building successful brands: the strategic options, Journal of Consumer Marketing, 7(2), pp Ehrenberg, A.S.C. (1972) Repeat-buying: Theory and Applications. Amsterdam.: North- Holland. Eisman, R. (1990) Building Brand Loyalty, Incentive, Holt, Rinehart & Winston Inc., New York, NY. Fornell, C. (1992) A national customer satisfaction barometer: the Swedish experience, Journal of Marketing, pp Fournier, S. and Yao, J.L. (1997) Reviving brand loyalty: A reconceptualization within the framework of consumer-brand relationships, International Journal of Research in Marketing, 14(5), pp Jacoby, J. (1971) Brand loyalty: A conceptual definition. In Proceedings of the Annual Convention of the American Psychological Association. American Psychological Association.

6 24 Jacoby, J. and Chestnut, R.W. (1978) Brand loyalty: Measurement and management. Knox, S. and Walker, D. (2001) Measuring and managing brand loyalty, Journal of Strategic Marketing, 9(2), pp Knox, S., Walker, D., and Marshall, C. (1993) Measuring consumer involvement with grocery brands: model validation and scale-reliability test procedures, Journal of Marketing Management, 10(1-3), pp Kressmann, F., Sirgy, M.J., Herrmann, A., Huber, F., Huber, S., and Lee, D.J. (2006) Direct and indirect effects of self-image congruence on brand loyalty, Journal of Business Research, 59(9), pp Lam, D. (2007) Cultural Influence on Proneness to Brand Loyalty, Journal of International Consumer Marketing, 19(3), pp Lau, G.T. and Lee, S.H. (1999) Consumers trust in a brand and the link to brand loyalty, Journal of Market-Focused Management, 4(4), pp Morgan, R.M. and Hunt, S.D. (1994) The commitment-trust theory of relationship marketing, Journal of Marketing, pp Oliver, R.L. (1999) Whence consumer loyalty? Journal of Marketing, pp Park, S.H. (1996) Relationship between involvement and attitudinal loyalty, Journal of Leisure Research, 28(4), pp Quester, P. and Lin Lim, A. (2003) Product involvement/brand loyalty: is there a link?, Journal of Product & Brand Management, 12(1), pp Raj, S.P. (1985) Striking a balance between brand popularity and brand loyalty, Journal of Marketing, pp Reichheld, F.P. and Sasser, W.E. (1990) Zero defeciions: Quality comes to services, Harvard Business Review, 68(5), pp Sheth, J.N. and Parvatiyar, A. (1995) The evolution of relationship marketing, International Business Review, 4(4), pp Taylor, M.B. (1981) Product involvement and brand commitment, Journal of Advertising Research, 21, pp