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Malgorzata Denoue
Kozminski University
Brand equity created by customers loyalty brings benefits not only to customers, but also to
manufacturers, commercial intermediaries, society, and, of course, brand owners. Customers
loyal support of a brand may contribute to the creation of competitive advantage for a firm. This
type of competitive advantage based on brand equity may help many global firms overcome the
fading country-of-origin effect.
Brand as a Resource of the Firm
R T Y K U Y
Brand Loyalty
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In all, one can make a statement that satisfaction makes a positive influence on customer
attachment to the brand, makes necessary conditions to create loyalty, but it is not enough.
An important determinant in this stage of
loyalty is perceived superiority of a product
or service resulting from the quality of the
product, quality of service and quality of the
marketing communication process.
A traditional approach to brand loyalty was
product quality which was the major reason
for brand loyalty (Oliver 1999, 38). Perceived
high product quality often resulted from prolonged brand positioning based on quality
associations. Also customer personality may
contribute to brand loyalty, e.g. risk aversion
discouraging new brands trials (Gounaris,
Stathakopoulos 2004).
Other determinants of brand loyalty also
play an important role. Oliver (1999) includes
an individualistic determinism of a customer
and also institutional or personal social attachment to the brand. An individualistic
determinism of a customer means a degree of
intensity with which the individual customer
defends his own perception and resists competitive influence of marketers (Oliver 1999,
37). This is strong motivation to stay loyal to
the brand. Brand confidence and attitudinal
attachment are signs of the individualistic
determinism and as such are accepted as
determinants of brand loyalty (Chaudhuri,
Holbrook 2001).
An individualistic determinism in its emotional part functions also in social dimension.
It is related to the need of group belonging and sharing certain common behavior
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Brand Loyalty:
o
o
Favorable word-of-mouth
Intensive purchase by existing customers
Competitive Advantage
Higher margins
R T Y K U Y
Consumer benefits, emerge from various functions performed by a brand (Aaker 1992, p.
3132; Atlkorn 1999, p. 1314, Kapferer 2005,
p. 2024). One of these is the identification
function. A brand helps the buyer to identify,
retrieve and process information about the
product which helps to identify it at the point
of sale. Thanks to the brand, a customer is
able to distinguish a particular product from a
competitive offering and is able to attach to it a
specific functional or emotional value experienced earlier or acquired from advertising.
In developed countries with more sophisticated markets, firms decide to develop brands
because brand equity building strategy is advantageous not only for the brand owner and
buyer but also adds value in distribution and
supply chain, i.e. business partners, suppliers,
intermediaries, investors, and even society
(creating the impression of a real or imaginary
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A valuable brand also creates benefits for employees of a business (de Charnatony 2003, p. 79).
Working with a well known brand stimulates
productivity, contributes to job satisfaction and
develops professional pride. A strong brand supports motivation of the employees and makes
many of them identify with the brand they
produce or deal with. In the case of corporate
brands such as Microsoft, Citibank or Philips,
brand represents overall value of the organization and helps the employees act in a common
and consistent manner which is especially valuable in the case of global corporations. The value
of a brand very often reflects on organizational
culture and attracts the attention of many prospective employees. For many who work for a
brand, this represents values shared with each
other and increases job satisfaction.
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R T Y K U Y
Well known and valuable brands bring benefits to the society. According to Kotler, branding
products result in increased product quality
and stability (Kotler, Armstrong-Saunders,
Wong 2002, p. 630). The value of a brand
contributes to manufacturers innovativeness
since it stimulates the search for such product
features that can be protected against copying
by the competition. This often contributes
to new product development which benefits
society. Certain well known brands enjoy
broad acceptance which benefit society and
the planet. Greenpeace is a brand name that
achieved general acceptance as an organization
engaged in environmental protection.
Due to delivered value perception in the
eyes of the consumers, benefits to distributors,
employees and society, a brand adds value to
the business of the brand owner. However, in
the process of value adding the customer is the
key. Without a customers acceptance, a brand
wouldnt get wide-range recognition and will
not benefit the owner.
The value of the brand for the brand owner
may be analyzed from various perspectives.
From a customers perspective, a brand creates benefits for a brand owner by influencing
the buyers attitude toward the product and
attitude is considered a major determinant of
product purchase intention (Farquhar 1989, p.
27). The high value of the brand represents the
products historical reputation which strongly
influences customer choice. High brand value
perception creates high brand loyalty and
readiness to pay a premium price for the product. Usually the favorite brand is rather price
inelastic as customers are reluctant to resign
from its value. In the case of favorite brands,
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image starts fading in the perception of buyers and is gradually replaced by brand image
concept. The importance of brand image is not
a new issue today; however, its importance is
growing and takes a special place in the process
of creating a competitive advantage of global
organizations. Thus the ability to differentiate the brand name and brand positioning in
markets and also the ability to use it effectively
in creating brand image and brand loyalty is
critical in international and global marketing
management.
References
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