5.Research brand and customer loyalty, in spite

5.Research Background and Literature Review:

 

5.1 Loyalty:

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Loyalty
is a biased response towards a brand or product/service stated over a period of
time and is defined by the purchase form of a decision-making-unit which may be
an individual, a household or a firm/company (Mellens, Dekimpe and Steenkamp,
1996). in this manner loyalty suggests steady repurchase of a brand coming
about from positive partiality of buyers towards the brand or the item. Jacoby
and Chestnut (1978) argued that commitment is an important element of loyalty
and discriminates between loyalty and repeat buying which is due to inertia.
Former
Ford vice president, Basil Coughlan estimates that every percentage point of
loyalty is worth 100 million dollars in profits to his company (Serafin and
Horton, 1994). Del Monte, Harley Davidson and General Motors spend large sums
of money to induce brand loyalty (Mellens, Dekimpe and Steenkamp, 1996). Brand
loyal consumers are willing to pay higher prices and are less price sensitive
to price increases (Mellens et.al.). Hence loyalty is at the core of a
company’s victory. furthermore, loyalty appears clearly
in automotive industry when customers loyalty and perception towards a certain
vehicle like Mercedes-Benz or Rolls- Royce brand, the degree of trust and
commitment is expressed in the name or brand name of this product. Analysts and
marketers are sharp to get it the factors that decide loyalty to a company or
to product and to differentiate between brand and customer loyalty, in spite of
the fact that there is not much contrast between the two concepts. The
benefits enjoyed by a brand with higher and consistent customer loyalty include
the ability to keep premium pricing, greater bargaining power with channels of
distribution, reduced costs, a strong barrier to potential new entries into the
product or service in the same field (Reichfeld, 1996).

 

5.2
Branding:

Famous brands have a number of merits
for a company, the retailer, the consumer and for society all together. Strong
brands help the customer locate and identify goods and assess their quality and
makes it easier for them to develop attitudes and expectations (Pelsmacker,
Geuens, and Van den Bergh, 2001). Branding moreover makes shopping more
effective as it tends to diminish the sum of decision-making time needed and
the seen dangers of buy since a brand guarantees a consistent degree of quality
(Pelsmacker et. al., 2001).

Well-known brands are capable of
developing proper attitudes and perceptions simply, which result in increasing in
sales. Higher perceived quality gives the consumer explanation to purchase the
product (Pelsmacker et. al., 2001). The same brand equity components may give
the manufacture a competent base for line or brand extensions. The image and
personality of the brand is effortlessly carried over to the unused items,
giving it a head begin. An expansion set of brands makes a difference the buyer
recover data from memory, in this way it encourages the acquiring handle and
predisposition towards the brand (Pelsmacker et al., 2001).

In
a competitive business environment, brands are not just symbols that serve as
identifiers but have an economic function. The value of brands is its ability
to form an exclusive, positive and prominent meaning in the minds of consumers
(Kapferer, 1977). A brand can create a lasting impression on consumers and this
may result in brand loyalty or attract loyal customers.

 

5.3 Service loyalty (Brand Loyalty):

Service loyalty
is defined as the degree to which a customer manifest repeat purchasing
behavior from a service provider, holds a positive attitudinal tendency toward
the provider, and considers using only this provider when a need for this
service occurs (Cremler and Brown, 1996).

The
conceptualization and the interpretation of the loyalty construct has developed
over the years.in the past days, the focus of loyalty was brand loyalty related
to tangible products (Cunningham, 1956; Day, 1969; Tucker, 1964). Cunningham
(1956) defined brand loyalty as “the proportion of purchases of a household
devoted to the brand it purchased most often”. Cunningham (1961) broaden the
vision of analysis by focusing on store as opposed to brand loyalty using the
same measures he had used before with brands. Over the time, the discipline has
continued to extend, indicating the wider perspective of marketing to include the
other types of loyalty like vendor loyalty. However, small number that focus in
studies on customer loyalty of services (Oliver, 1997). Back to Literature
shows that much of the earlier researchers assure the behavioral dimensions of
loyalty. This was abridged by Tucker (1964, p.32) who says that: No
consideration should be given to what the subject thinks nor what goes-on in
his central nervous system, his behavior is the full statement of what brand
loyalty is.

Service
loyalty in automotive industry is a main source of survival to companies
because to retain an existing customer is much easier and cheaper in cost than
gaining a new one. Furthermore, customer orientation to make service again and
again in the same service center is a source of power and result in the free
marketing word of mouth.

Brand
loyalty was basically measured in terms of
its result characteristics (Jacoby and Chestnut, 1978). This
contributory determining the sequence of purchase and ordering the same product
or service. proportion of purchase with respect to a given brand. Day (1969)
argued that ”there is more to brand loyalty than just consistent buying of the
same brand. Attitudes for instance”. An advance perspective of loyalty
distinguished by other analysts in more later a long time is cognitive loyalty.
This is seen as a higher arrange measurement and includes the consumer’s
cognizant decision-making prepare in the assessment of elective brands some
time recently a buy is affected. Cremler and Brown (1996) outspread the concept
of loyalty to intangible goods, and their definition of service loyalty integrates
the three specific components of loyalty considered, namely: the purchase,
attitude and cognition.

Brand loyalty is a pattern of consumer behavior
where consumers become committed to brands mentally and emotionally and make repeat
purchases from the same brand over time. Loyal customers consistently
purchase products from their preferred brands, regardless of convenience or
price. Companies often use many marketing strategies
to build and retain loyal customer, including loyalty programs (i.e.
rewards programs) or trials and incentives such as: samples and free gifts and
coupons and discount.