Table of Contents

Brand Loyalty and Its Influence on Consumer Behavior

1.1. 1.2. 1.3.

2 2 2 3 3 4

Introduction Definition of Consumer Behavior Definition of Brand Loyalty

1.3.1. Two Types of Brand Loyalty- Attitudinal and Behavioral Brand Loyalty 1.3.2. Advantages of Brand Loyalty 1.4.

Brand Loyalty and its Various Aspects 5

1.5.

Influence of Brand Loyalty on Consumers behavior Problem Statement Conclusion

6 7 7 8

1.6. 1.7.

REFERENCES

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Brand Loyalty and Its Influence on Consumer Behavior 1.1. Introduction

The aim of this assignment is to provide an insight of brand loyalty which is taking momentum from the past few decades as there has been new tools and techniques introduced to bring in advancement in the relationship marketing. Brand loyalty is an important tool to which measures the consumer behavior which constitutes various dimensions that will be discussed in the forthcoming headings. In addition the assignment discussed various aspects of brand loyalty. This is the topic which is of interest to me that is why I have discussed it in full detail so as to provide some theoretical background for the future research.
1.2.

Definition of Consumer Behavior

Consumer behavior is multifaceted subject as it is composed of different aspects of human psychology. According to Parner it is an assemblage of actions, attitudes and feelings which consumer shows towards a band, product or a service. These things are going on in the mind when the consumer is making a decision. The behavior of consumer totally depends upon the experience that he/ she have while shopping or in other words it is the scenario. A behavior is shaped through the knowledge that gets into the mind of the consumer through his/her environment, mass media and word of mouth etc. (Parner). This definition is somewhat brief and does not meet the standard of vastness. In contrast Wilkie (1994) studied the mind process which is going on and that constitutes the coordination of body, mind and emotions. So its a combination of mental, physical and emotional constitution of a human being. Consumer show a particular behavior while selecting, choosing or disposing a product. In connection these satisfy a consumers needs and wants. There are seven things which Wilkie (1994), an activity or combination of activities, an inspiration that can have many reasons behind, role play which the person play, external factors, time and complexity of the decision making process etc.

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In order to best target a brand, a company needs to follow a strategy which in marketing terms is called as a marketing strategy so as to provide a brand that is wanted in the market. Talking about marketing strategy, it is important to mention here that in earlier knowing the demands of consumer was a was a difficult task but today the scenario is different as there is a direct contact between the consumer and the marketing people (Blackwell et al., 2001). So this means that consumer behavior can be molded in favor of brand by a good marketing strategy that can influence their behavior and purchase intention.

1.3.

Definition of Brand Loyalty

Brand Loyalty is particularly a term that is used in relationship marketing (Sheth and Parvitiyar, 2000) because it is the relationship which the brand builds with its customers. Brand loyalty has been very broadly defined by Oliver (1999, b). According to him it is brand loyalty is customer commitment and trust which is bestowed upon a brand until the other brand in competition introduce the same thing into its brand. Furthermore, the brand in order to remain the favorite brands needs to develop marketing plan that avoids the switching cost. In other words when brand is purchased the brand if provides the promised features becomes superior and in this way the customer repurchases it. According to the concept of brand loyalty a consumer who is brand loyal keeps on buying the brand without any reason. He/she stops the purchase when the consumer gets the same brand in the market. In addition, brand loyalty can be maintained by providing extra value to the customers with the brand that is offered, for example consistency in the quality. Moreover, the consumers a loyal to the brand in an extent that consumer keeps on purchasing it no matter what competition it face in the market (Lewis, 2010).
1.3.1. Two Types of Brand Loyalty- Attitudinal and Behavioral Brand Loyalty

According to one of the definition given by Oliver (1999) that identifies two forms of brand loyalty. It states that a strong bondage of consumer with the product/service or brand which forces him or her to again and again buy the product/service or brand or a set of brands that is offered by the same brand. It is basically gaining the repurchase and re-patronization of a particular brand nevertheless the competition and the marketing tactics of other brands in the market which causes it to switch to their brand. This particular definition accentuates on two
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points that are the two types of brand loyalty which include the behavioral brand loyalty and attitudinal brand loyalty (Aaker, 1991; Jacoby and Chestnut, 1978; Oliver, 1999; Jacoby and Kyner, 1973; Day, 1969). According to few researchers both these types that are attitudinal and behavioral are not the same (Oliva et al., 1992) or are the identical terms, part of each other (Assael, 1987). Chaudhuri and Holbrook (2001) had defined both these types very accurately. Behavioral brand loyalty that in literature is also used as purchase loyalty had been explained as repeat purchase behavior. While the attitudinal brand loyalty had been made associated with a particular value which the brand has created and which adores a consumer and for that purpose he/she comes to the same brand again and again. As have discussed that there are two forms of brand loyalty behavioral or purchase and attitudinal brand loyalty. According to Chaudhuri and Holbrook (2001) these two variables or types act as a linking material between brand trust and brand affect to the enactment of the brand. The performance of the brand is evaluated through the market share that it have and the price on which it is offered in competition to the other brands. In the research that was conducted on 107 brands to check their utilitarian value, brand differentiation and voice of the brand. The data of the research was gathered from the brand managers and consumers. The outcomes of the research concluded that there exists a positive relationship between the attitudinal and the purchase brand loyalty with the performance of the brand. All this leads to higher market share. the article also poses some implications on part of the managers.

1.3.2. Advantages of Brand Loyalty There are numerous advantages of brand loyalty that has been discussed by various researchers. The following lines describe these with the citation from the literature. Aaker (1991) also discussed the significance of loyalty in brand equity. He noticed that there are certain features or aspects that come to the brand when a loyalty is created. These include certain advantages regarding marketing because when a brand creates a loyal customer, the need to market it becomes lower because naturally the loyal customer remember it, a positive word of mouth is created through which the new customers come to the brand, leveraging the trade. These were Aakers (1991) explanation but there are certain other advantages that are given by Jarvis and Mayo (1986). According to them when there is as increased competition in the market, this is the most appropriate way to increase the customer base via providing
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them with the features which the competitors are not offering. The competitive advantage needs to be workable and defensible (Kotler and Singh, 1981). The Advantages provided by brand loyalty are recognized from the past thirty years and the significance is the literature present on brand loyalty (Howard and Sheth, 1969)

1.4.

Brand Loyalty and its Various Aspects

Brand loyalty is a dimension of brand equity which is defined as the benefits that are added to the company as well to the consumers. This mean it is an asset as well as a liability (Ambler, 1995 and Aaker, 1996). There are some tangible and intangible things that make up the brand equity (Aaker, 1996). There have been different dimension that are identified in one of the model prosed by Aaker (1991). These include brand awareness, brand associations, brand loyalty and perceived quality. In a definition and explanation given before it has been said that brand loyalty make a consumer stick to the brand. This has been confirmed by other researchers also. In addition brand loyalty gains the consumers lifetime value CLV (Collin et al, 1991; Dick and Basu, 1994; Schiffman and Kanuk, 1997; Gilbert, 2003). According to Aaker (1991) the consumers purchases again and again that brand and in this way the companys advertising and marketing costs lower down as the brand of choice remains in the consumers consciousness. Only the teaser ads can do heavy duty in the known brands. The life cycle of these liked brands also outspreads the life cycle of a particular brand so making and confirming that the extinction of this brand is not possible. For example pepsi cola and coca cola are the companies whose brands life cycle stages are longer as the consumers are brand loyal to them. The advantage of creating brand loyal customers is that the competition also cannot break the customers or make them switch as the brand gains loyalty in the market and the competitors no matter how good brand in competition introduce but still the loyal customers will come to it (Raj, 1985). For example, the brand loyal customers of Apple never switch to other brands; because price doesnt matter it is the quality and efficiency that this company provides to its customers. Regardless of the fact that the technological products which it provides are expensive yet customers are ready to pay as they are brand loyal.

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When once company makes a customer brand loyal, then it becomes easier to attract more customers because the loyal customer base creates a positive word of mouth in his/her circle of people and in this way more customers will be attracted. In other words brand loyal customers through their WOM drive other people who have the intent to the particular brand (Keller, 1993; Punj, 2004). According to a study by Stafford (1966), it was found out that the informal group influences purchase intention, specially a group leader influences its member for a purchase intention. This can be called as word of mouth an in all this act, brand loyalty is very important that acts as a pushing force that make the loyal consumers do so. For example, a woman using Loreal Mascara will create a buzz within her circle of friends that the other will be forced to buy it and that these loyal customers will bring in the feeling of intention to make a purchase. There are three other aspects that had been center of interest to the researchers. These include commitment, trust and satisfaction. Commitment is the attachment with the brand which he/she develops over a period of time and it is this commitment that forces the consumer for the repeat purchases (Beatty and Kahle, 1988). Trust is a relationship where the trustee provides trust to the truster and truster is dependent upon the trustee (McKnight et al., 2002, p.337). According to many researchers it is seen that there is a positive link between trust and the intention to buy the product (McKnight et al., 1998, 2002; Kim and Benbasat, 2003; Gefen et al., 2003; Jarvenpaa and Tractinsky, 1999; Mayer and Davis, 1999; Mayer et al., 1995). According to Dick and Basu (1994) when the consumers have some positive intention towards the brand they become brand loyal. so the mood or the affect was by default positive. Satisfaction is in sense that the consumers feel good and happy towards the brand. The effect is on their attitudinal brand loyalty and through this they become committed to the brand (Chaudhuri and Holbrook, 2001). When the consumer becomes satisfied a post purchase behavior will start and this behavior will be further bring out other things like complaining about the brand when it fails to provide the quality, WOM (word of mouth), and the usage of the product (Oliver, 1980; Westbrook and Oliver, 1991). So this heading described various
aspects of brand.

1.5. Influence of Brand Loyalty on Consumers behavior In this heading there is a debate made on the influence of brand loyalty on the consumer behavior. Consumer behavior is different for different product and brand categories. For example for technological and expensive purchases he/she search and ask a lot for a

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particular brand. For FMCGs it is totally different and for food and miscellaneous or accessories it is dissimilar. Luxurious products demand other brand loyalty. In addition the behavior includes purchase intention, awareness, satisfaction and attitudes. That is why it is called as a multifaceted concept. Mochis et al (1984) developed a framework of different theories related to socialization and psychology to give and explanation of how brand loyalty takes shape in the early years of adulthood. The results of the study revealed that the individuals develop brand preferences, attitudes and behaviors towards the brand in the adulthood and TV, newspaper and the discussion between peers. Another study on Singapore consumers showed that the loyalty is developed through the trust. Through this research various characteristics were revealed that were related to company brand and consumers. All these together build in the brand loyalty. In this study the brand characteristics were made the base for developing the consumers trust in brand while the significant or positive link was found out between brand loyalty and consumers trust in brand. An attention of marketers was drawn towards engraving the trust by using the brand characteristics (Lau and Lee, 1999). 1.6. Problem Statement From the analysis of the above literature and other examples I come to the conclusion that the brand loyalty has some impact on the human behavior. The proposed research question that I conclude is Brand Loyalty influences the consumer behavior optimistically and that the trust, satisfaction and commitment towards the brand are increased by leveraging up the brand loyalty. 1.7. Conclusion

In the above heading I developed a background on the consumer behavior and brand equity. Consumer behavior is such a broader concept that it requires an in depth review of the literature. Besides the brand loyalty is also a vast subject as company depends on it with respect to future sales. It had discussed various things or aspects which develops brand loyalty and which company can develop in order to get advantage from brand loyal

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customers. Two types of brand loyalty have also been discussed because both make this concept more understandable. Brand loyal customers are loyal because over a period of time they have developed a relationship with the brand and this cannot be broken by any new brand even it offers that on much lower price. Therefore the behavior towards the brand becomes positive, and this can be seen and measured by their frequent purchases. In a nutshell, the assignment is full of the information regarding brand loyalty and consumer behavior. REFERENCES Aaker, D. A. (1991), Managing Brand Equity- Capitalizing on the value of a Brand Name, The Free Press, A Division of Macmillan, Inc, New York Aaker, D.A. (1996), Building Strong Brands, Free Press, New York, NY. Ambler, T. (1992), Need-to-Know-Marketing,Century Business, London. Assael, H. (1987), Consumer Behavior and Marketing Action, 3rd ed. Boston: Kent. Beatty, S.E., L.R. Kahle, and P. Homer, (1988), The Involvement-Commitment Model: Theory and Implications, Journal of Business Research, Vol. 16(2), pp. 149-167. Blackwell, R.D., Miniard, P.W. and Engel, J.F. (2001), Consumer Behaviour. Orlando: Harcourt College Publishers Chaudhuri, A. and M.B. Holbrook, (2001), The Chain of Effects from Brand Trust and Brand Affect to Brand Performance: The Role of Brand Loyalty, Journal of Marketing, Vol. 65 (2), pp. 81-93. Collin P., Ivanoic A., Lantermann D., and Livesey R. (1991), Dictionary of Marketing, PETER Collin Publishing, UK Day, G.S. (1969), A Two-Dimensional Concept to Brand Loyalty, Journal of Advertising Research, Vol. 9(3), pp.29-35. Dick, A. S. and Basu, K. (1994), Customer loyalty: toward an integral conceptual Framework, Journal of the Academy of Marketing Science, Vol. 1(22), pp99-113

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McKnight, D.H., V. Choudhury, and C. Kacmar, (2002), Developing and Validating Trust Measures for E-Commerce: An Integrative Typology, Information Systems Research, Vol. 13(3), pp. 334-359. Oliva, T.A., R.L. Oliver, and I.C. MacMillan, (1992), A Catastrophe Model for Developing Service Satisfaction Strategies, Journal of Marketing, Vol. 56(3), pp. 83-95. Oliver, R.L. (1999b), Whence consumer loyalty, Journal of Marketing, Vol. 63, pp. 33-44. Punj G, N. and Hillyer C.L. (2004), A Cognitive Model of Consumer-Based Brand Equity for Frequently Purchased Products: Conceptual Framework and Empirical Results, Journal of Consumer Psychology, Vol. 14(1/2), p124 Raj, S. (1985), Striking a balance between brand popularity and brand loyalty, Journal of Marketing, Vol. 49(4), pp53-59 Schiffman, G and Kanuk, L. (1997), Consumer Behavior, 6th ed., New Jersey: Prentice-Hall International Inc Sheth,J.N. and Parvitiyar, A. (2000), Towards a theory of business alliance solution, In handbook of Relationship marketing, Sage Publications Inc, pp 303-323. Stafford, J.E. (1966), Effects of group influences on consumer brand preferences, Journal of marketing research, Vol. 3(1), pp. 68-75 Wllkie, W.L. (1994), Consumer Behavior, 3rd ed, New York: Von Hoffman Press. Westbrook, R.A. and R.P. Oliver, (1991), The Dimensionality of Consumption Emotion Patterns and Consumer Satisfaction, Journal of Consumer Research, Vol. 18(1), pp. 84-91.

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