3. 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 company's
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. Companies
can create brand equity for their products by
making
4. The American Marketing
Association (2011) defines brand
loyalty as:
◦ Consumer Behaviour Definition
"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"
5. Is Brand Loyalty more than
simple repurchasing?
◦ Customers may repurchase a
brand due to situational
constraints; e.g.
1. Vendor lock-in
2. Lack of viable alternatives, Loyalty Cards
3. Convenience Is created loyalty true or
spurious?
Such loyalty is referred to as
"spurious loyalty".
Farris et al: (2010). Marketing
Metrics
6. Exists when customers have:
◦ “a high relative attitude toward
the brand which is then exhibited
through repurchase behaviour”
Dick and Kunal (1994)
Great asset to a firm:
◦ Customers:
Willing to pay higher prices,
Cost less to serve,
Bring new customers
From marketers viewpoint
◦ Loyalty a key factor in terms of
consumer usage
7. Usage Rate / Rate Of Usage
◦ Suppliers often segment into
Heavy
Medium
Light Users
◦ Pareto 80-20 Rule applies.
'Heavy Users' -
disproportionately important
20% of users accounting for 80%
of usage / profit
Key target = heavy users.
Kotler (1991)
8. 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
Philip Kotler (1991)
9. Other Factors
◦ Pre-dispositional commitment toward a brand
BL a Multidimensional construct
Entails multivariate measurements: e.g.
Customers' perceived value
Brand trust
Customer satisfaction
Repeat purchase behaviour
Commitment
Commitment and = necessary conditioRepeated Purchase
Behaviour ns
◦ followed by Perceived Value, Satisfaction, And Brand Trust
Reichheld (1996) /Punniyamoorthy & Raj (2007)
10. Dramatic effects on profitability
Longer tenure as a customer
Lower sensitivity to price
increases.
11. Consumers Buy 'Portfolios of
Brands
◦ Switch regularly between
brands
often because they simply want a
change
◦ 'Brand Penetration' or 'Brand
Share'
A statistical chance that majority
of customers will buy that brand
next time as part of their
portfolio of favoured brands
◦ Emphasises a need for
managing brand continuity
Ehrenberg, Uncles and Goodhardt
(2004)
13. Most markets show overall
stability
◦ Change slow - decades / centuries
Two major implications
1. Clear brand leaders well placed re:
competitors
Still requires regular minor changes to
stay abreast of changes in consumer
taste
2. Someone wishing to change
market (or position)
Massive investment needed
◦ Despite normal stability -sudden
changes can occur
Environmental scanning
14. Brand Loyalty As A Hypothetical Construct
Brand Loyalty As A Multidimensional
Construct
◦ Measured by several distinct psychological
processes
◦ Entails multivariate measurements.
Sheth & Park (1974) - Advances in Consumer Research
Volume 1, 1974, pp. 449-459
15.
16. Brand Loyalty As A Hypothetical Construct
◦ positively biased emotive, evaluative and/ or
behavioural response tendency toward a branded,
labelled or graded alternative or choice by an
individual in his capacity as the user, the choice
maker, and/or the purchasing agent.
17. No restrictions of repeated overt behaviour
◦ Consumers may be brand loyal even though never
bought the brand
May arise by learning from information, imitative
behaviour, generalization and consumption behaviour
and not from buying behaviour experiences.
Consumer may have no evaluative (cognitive
/ attitudinal) structure underlying loyalty
◦ Emotive tendencies (affect, fear, respect,
compliance, etc.)
Related to loyalty
18. Bl can exist at the non behavioural level
◦ Emotive or evaluative level - for products or
services which same consumers never buy
Biased non-behavioural (non purchase) tendencies –
E.g. BL to cars, airplanes, boats, etc.
◦ Specific role consumer performs - loyal as:
Consumer
Buyer (purchasing agent)
Decision-maker
All three?
20. Defined as a positively biased tendency that contains three
distinct dimensions
1. Emotive tendency toward the brand
2. The affective (like-dislike) - fear, respect, compliance
3. Value-expressive or ego-defensive attitudes - Katz (1960)
Emotive tendencies learned from
◦ Prior experiences with brand
◦ Non-experiential or informational services.
Evaluative tendency
◦ Positively biased evaluation on a set of relevant criteria
The brand's utility to the consumer
Value-expressive or ego-defensive
◦ Instrumental, utilitarian, attitudes - Katz (1960)
◦ Perceived instrumentality - Rosenberg (1956) /Howard and Sheth (1969)
21. Learned by the consumer
◦ Prior experiences
◦ Non-experiential/informational
sources.
Behavioural tendency
towards the brand.
◦ Positively biased responses
Primarily from buying and
consuming experiences
Procurement, purchase and
consumption activities
Shopping, search, picking up
from the shelf, paying,
consuming
22. Social Media and Internet
◦ May be weakening influence of brand loyalty
Despite importance of brand awareness, growth of
search engines can reduce the influence of branding.
Consumers influenced by products that rank highest in
search engines, rather than by traditional brand
awareness.
◦ Social networking having a similar effect
User generated product reviews, etc
Salem-Baskin (2011)
23. Kumar (2011)
Power of "Advocacy".
◦ Consumer actively talks and listens to other „loyal‟ consumers
Moves back and forth the traditional purchase funnel
◦ Forms a consideration set -“from listening”
May change the consideration set
Narrows choice to 1-2 brands
24. Preference
◦ If Families are Price Sensitive Then They will be So
Regardless of the Product
Two main factors -sensitivity to price and brand
preference
Consumers who are brand loyal tend to shop by brand
rather than price in other categories.
Consumers who shop by price will tend to look for
bargains in all categories
Peral (2011)
25. Reinforcement
◦ Raising brand awareness helps to reinforce brand
loyalty
„Tweens‟ 9 -12 year olds exposed to over 20,000
commercials annually
difficult for brand messages to stand out.
◦ Repetition through regular advertising is important
Reed (2011)
26. Habit
◦ Consumers make choices based on names and
positive brand-associated images
In retail outlets where consumers face choices for
same type of product - strong brand has a clear
competitive advantage
Difficult to copy v. Copycat products???
Pekala (2008)
27. Emotional Attachment
◦ Likely to top whatever market research a consumer does
before purchase
Rely on 'rules of thumb' -leads to a persistent bias in how
they think.
Consumer cherry-picks to reinforce existing viewpoint,
convincing themselves that they were right
◦ Smart companies use advocates to spread the word
Brands with an emotional connection are placed in the
purchase pathway
Cunniffe & Sng (2012)
