Brand LoyaltyStrategies For Maintaining Brand Loyalty in Business Organisations (A Case Study of FAN...

7/28/2019 Brand LoyaltyStrategies For Maintaining Brand Loyalty in Business Organisations (A Case Study of FAN MILK NIG. L

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PROJECT TOPIC : Strategies For Maintaining Brand Loyalty in Business

Organisations (A Case Study of FAN MILK NIG. LTD.)

CHAPTER ONE

1.0 INTRODUCTION

The term loyalty is associated with a feeling of devoted attachment and

affection. The term brand loyalty captures this very essence but from a

commercial perspective. Manufacturers and companies are always trying to

create niche (i.e. product) in the market by constructing their own base of loyal

customers, who over the period of time have accepted the product whole

heartedly. These brand loyalists would spend their money devotedly to acquire

the particular product and would also carry a feeling of immense satisfaction on

the purchase. The importance of brand loyalty can be asserted from the fact that

it plays a vital role in the companys advertising appetites. If a particular product

is having a good brand loyalty, then the company spends large expends over

short periods of time to attract new patrons, but if the brand loyalty is low then

companies tend to keep the advertising at a steady pace to attract fresh

consumers and to boost sales (Loudon, 2001).

Due to increased competition, locally as well as internationally, organizations

need a distinguishing element that will keep consumers identifying and buying

their products. With competition increasing annually, the traditional sources ofcompetitive advantage no longer provide long term security for a company,

product or marketer. In other words, leadership in price and quality is not

enough to ensure the success of a product anymore.


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Company executives are recognising that the true worth of the organization is

not the tangible assets it owns, but the value ascribed to the brands it is

developing to satisfy the needs of the consumer (Sinclair, 2000).

Brands are among an organisations most valuable assets, and leading

organisations (as in the case of Coca Cola) today realise that capitalising on their

brands is more important than their tangible assets. Doing so can help them

achieve their growth objectives quicker and more profitably (Davis, 2000).

Leading organisations know that brands are more than just products: brands are

also an indication of what the organisation does and, more importantly, what the

organisation is. Usually brands are why an organisation exists; not the other way

round (Davis, 2000).

However, most organisations are not maximising their potential financial returns

because they are not maximising the power of their brands. With proper brand

management, organisations can experience exponential growth, but this will

happen only if these organisations take advantage of the most important growth

weapon at their disposal: their brand (Davis, 2000).

1.1 BACKGROUND OF THE CASE STUDY

1.2 PURPOSE OF STUDY

The objective of the research was to find out what strategies an organization

could implement to achieve and sustain loyalty from current and prospective

consumers towards its brand in a highly competitive market. This is to be

completed in partial fulfillment for the requirement for the award of Bachelor of

Science.


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1.3 STATEMENT OF PROBLEM

Based on the foregoing discussion, the following were highlighted as the major

problems of oganisation as regard brand loyalty:

In ability to maintain brand loyalty from its existing consumers due to lack

of satisfaction, inferior product/Services, meeting specification and/or

consumer needs, lack of proper consumer follow-up and customer care

service. e.t.c

Difficulties in building a quality brand.

Improper brand management.

Challenges in ascertaining effective and efficient brand loyalty strategies

In ability to monitor and evaluate consumers behavior with respect to a

given brand.

1.4 RESEARCH QUESTIONS

What strategies can an organization implement to achieve and sustain

loyalty from current and prospective consumers towards its brand in a

highly competitive market?

On what basis do consumers differentiate between homogenous

products?

What strategy/strategies can an organisation utilise to ensure that

consumers will differentiate its products from those of its competitors in a

market where products in the same category are very similar in features,

attributes and benefits?

What variables motivate consumers to be brand loyal in an highly

competitive market?

How can an organisation go about creating a powerful brand?


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How can an organization maintain brand loyalty from its existing

consumers?

1.5 RESEARCH HYPOTHESES

Hypothesis is testable statement of possible relationship between two or more

variables. i.e. it is conjugal statement which test the relationship between two

more variables. There are two major types of hypotheses by name: Null and

Alternative hypotheses.

For the purpose of this study, the following hypotheses will be considered:

1.An effective and efficient brand loyalty strategy cannot bond a consumer to

an organisations brand

2. Building and maintaining effective brand loyalty has no positive effect on

continues patronage by existing and prospective consumers

3. Proper brand management cannot be instrumental to the growth of an

ogarnisation?

1.6 RELEVANCE OF STUDY

The relevancy of this study cannot be undermine owing to the fact that the aim

and objective of a business is to maximize the wealth of the owner which can be

achieved through continuous patronage of its product and service by the

consumers

In a nut shell, the study will open the eyes of company in to various strategy

that can be used to achieved the goal of brand loyalty which if applied can create

brand loyalist consumers. In addition to the above benefits, it will as well serveas reference material for further research.

1.7 SCOPE AND LIMITATION OF STUDY


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This research work will focus attention on strategies that organisations in various

industry can emback on to maintan brand loyalty in a business competitive

environment.

Never-the- less, it was noticed that most human endeavours are subjected to

some limiting factors; the research effort of this nature is therefore not an

exemption. Considering the time and financial resources at the disposal of the

researcher, it is impossible for the study to be exhaustive.

1.8 DEFINITION OF TERMS

1. Advertisement:

2. Asset:

3. Bond:

4. Brand:

5. Competitor:

6. Consumer:

7. Exhaustive:

8. Immense:

9. Inferior:

10. Loyalist:

11. Loyalty:

12. Market:

13. Niche:

14. Patronage:

15. Satisfaction:

16. Tangible:


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CHAPTER TWO

To find out what one is fitted to do, and to secure an opportunity to do

it, is the key to Happiness. John Dewey

2.0 INTRODUCTION

Literature review can be defined as the critical evaluation of past relevant works

to a research under study, with a view to identify areas of convergences and

divergence in such past work.

As a starting point, the researcher investigated the availability of published

sources of information so as to find a theoretical basis from which to launch the

study. The following were instrumental to the completion of this section of the

research: Wikipedia of Brands and Branding, Journals, magazines.

Information on brands and brand loyalty, in general was found in textbooks

and on the net.

The study in addition to the aforementioned, as well reviewed a past research

work on RETAINING BRAND LOYALTY AND UNDERSTANDING ITS

SIGNIFICANCE by Anita Agrawal and Siddharth S. (2010). While the later

discussed extensively on brand loyalty with respect to internet, the current study

attempts to identify strategies for maintaining brand loyalty in business in

general.

2.1 DEFINITIONS

Brand

Much confusion exists about what is to be understood under the term brand. In

this section, a number of interpretations of the concept are explained. These


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include the brand as having a position in the consumers mind; brands as a form

of distinguishing between products, and brands as a package of value.

According to Hart and Murphy (2003) the use of brands has developed

considerably, especially in the last century. The words brands and branding are

now such common currency that their original meaning is in danger of being

weakened. It is therefore important to have a clear understanding of the

meaning of brands and branding, in order to determine the various roles brands

and branding play in todays highly competitive business environment.

Knapp (2000) comments that it seems that everyone is talking about brand this

and brand that. Brand is becoming one of the most popular words used today.

But when you ask any group of people what a brand is, the answers vary widely.

Some think a brand is a name or a trademark. Some think it is a product, or

even a commitment.

During research with thousands of executives, employees, entrepreneurs and the

general public, Knapp (2000) discovered that when most people use the word

brand, they are thinking of a brand name. The Random HouseDictionary of the

English Language (in Knapp, 2000) defines a brand as a product or service

bearing a widely known brand name. The key aspect regarding names is

familiarity, but familiarity does not necessarily ensure that a name will be

distinctive. A brand name is not necessarily a brand.

Dunphy, business editor for The Seattle Times(in Knapp, 2000), maintains that a

brand does not mean the same thing to everybody; some organisations get the

concept and others dont. The key is whether an organisation walks the talks

and really understands the necessity for a brand to be distinctive in a manner

thats beneficial to its customer. In fact, it could be argued that many brand

names might be wellknown, yet not all that distinctive in the consumers mind


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when compared to other brand names in their industry. In order to be

recognised as a brand, a product or service must be characterised by a

distinctive attribute in the consumers mind (Knapp, 2000).

According to Knapp (2000), it is critical to understand that brands are not simply

the result of the advertising or message that an organisation places in the

market place. A brand is only that which is perceived by the consumers mind (or

what is thought of as the minds eye). Theconsumers minds eye is influenced

by thousands of impressions daily and changes just as often. Not only must a

brand monitor these impressions constantly; it also has to occupy a distinctive

positionin the consumers mind to really be a brand.

Knapp (2000) is of opinion that the less distinctive or different a brand is in the

consumers mind, the more room there is for competitors to occupy a position in

the consumers minds eye, and the less genuine a brand becomes.

Figure 2.0 shows the difference between genuine brands and brand names. A

genuine brandcan be defined as the internalised sum of all impressions received

by consumers, resulting in it having a distinctive position in their minds eye

based on perceived emotional and functional benefits. The primary objective of a

genuine brand should be to add value to peoples lives. A genuine brand is about

benefiting the consumers, and the more differentiated a brand is, the easier it is

to communicate efficiently with the consumer. However, differentiation needs to

be focused on the benefits to the consumer (Knapp, 2000).


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Figure 2.1 Comparison of distinctiveness

RELATIVE BRAND DISTINCTION

COMMODITIES BRAND NAME BRAND GENUINE BRAND

NO DIFFERENCE

EXCEPT PRICE

Well known but

similar

Distinctive Perceived by the

consumer as unique

Source: Knapp, 2000: 7

Branding has been around for centuries as a means ofdistinguishing the goods

ofone producer from those of another. The word brand is derived from the OldNorse word brandr, which means, to burn, as brands were and still are the

means by which owners of livestock mark their animals to identify them (Keller,

1998). According to the American Marketing Association (in Keller, 1998), a

brand is a name, term, sign, symbol, design, or a combination of the intended

to identify the goods and services of one seller or group of sellers and to

differentiate them from those of the competition. Thus, the key to creating a

brand, according to this definition, is to choose a name, logo, symbol, package

design, or other attributes that identifies a product and distinguishes it from

other brands. These different components of a brand, which identify and

differentiate a brand can be called brand elements (Keller, 1998).

Keller (1998) also believes that these brand elements come in many different

forms. In some cases, the company name is essentially used for all products

(e.g. General Electric). In other cases, manufacturers assign individual brand

names to new products that are unrelated to the company name (for example as

with Procter & Gamble). The name given to products also comes in many

different forms. Brand names can be based on people (for example Estee Lauder

cosmetics), places (for example British Airways), animals or birds (for example

Dove soap), or other things or objects (for example Carnation evaporated milk).


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Some brand names use words with inherent product attributes or benefits (e.g.

Beautyrest mattresses). Other brand names are invented and include prefixes

and suffixes that sound scientific, natural, or prestigious (for example Compaq

computers). Like brand names, other brand elements such as brand logos and

symbols may be based on people, places, objects and abstract images. In

creating a brand, marketers have many choices in the number and nature of the

brand elements used to identify their products.

Mariotti (1999) defines a brand as a shorthand description of a package of

values upon which consumers and prospective purchasers can rely to be

consistently the same (or better) over long periods of time. The package of

values distinguishes a product or service from competitive offerings. Abrand is

an important asset of a company, its products or services and its marketing

strategy. Often the brand will have a familiar logo associated with it as its icon.

When consumers see the logo (such as the Nike swoosh), they think of the

brand as the entire package of values and the promises it carries.

Davis (2000) believes that a brand is an intangible but critical component of

what a product represents. It is a set of promises that implies trust,

consistency, and a defined number of expectations. The strongest brand in the

world owns a place in the consumers mind, and when it is mentioned, almost

everyone thinks of the same things. Davis (2000) believes that a brand

differentiates products that appear similar in features, attributes and benefits. All

these help bring the brand to life and into consumers streams of consciousness,

but in reality they are simply well executed marketing and selling tactics (Davis,

2000).


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Brand loyalty

Literature on branding and brand loyalty contains many different approaches to

defining the concept of brand loyalty. These range from preference, to repeat

purchase, to various degrees of commitment.

Keller (1998) maintains that loyalty is a distinct concept that is often measured in

a behavioural sense through the number of repeat purchases. Consumers may

be in the habit of buying a particular brand without really thinking about why

they do so. Continual purchasing of a preferred brand, may simply result

because the brand is prominently stocked or frequently promoted. When

consumers are confronted by a new or resurgent competitor providing

compelling reasons to switch, their ties to the brand may be tested for the first

time. The attachment a consumer has to a brand is a measure of brand loyalty

and reflects how likely the consumer is to switch to another brand, especially

when the brand is changed, either in price or product features (Aaker, 1991).

If consumers purchase a brand repeatedlywithout attachment it is then called

behavioural loyalty. When a consumer purchase repeatedly and with attachment

then the consumer is both behaviourally and attitudinally loyal (Hofmeyr & Rice,

2000).

Loyalty towards buying or using a specific brand of product is created when a

brand becomes a consumers preferred choice. Consumer brand loyalty is what

makes brands worth millions or billions of dollars (Mariotti, 1999).

Many top brands have been market leadersfor years despite the fact that there

undoubtedly have been many changes in both consumer attitude and

competitive activity over a period of time. Consumers have valued these brands

what they are and what they represent sufficiently enough to stick with them

and reject the overtures of competitors, creating a steady stream of revenue for


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the firm. Academic research in a variety of industry contexts has found that

brands with a large market share are likely to have more loyal consumers than

brands with a small market share (Keller, 1998).

Aaker (1991) believes that it is relatively inexpensive to retain consumers;

especially if they are satisfied with and/or like the brand. In many markets there

is substantial inertia among consumers even if there are relatively low switching

costs and low consumer commitment to the existing brand. It is expensive for

any business to gain new consumers in todays highly competitive business

environment.

Some authors define brand loyalty further by stating that brand loyalty can also

be defined in terms ofcommitment.

Oliver (1999) defines loyalty in this context as a deeply held commitment to

rebuy or repatronize a preferred product or service consistently in the future,

thereby causing repetitive same-brand or same brand-set purchasing, despite

situational influences and marketing efforts having the potential to cause

switching behaviour.

According to Keller (1998) the bottom line is that repeat buying is a necessary,

but not sufficient condition for being a brand loyal buyer in an attitudinal sense.

In other words, someone can repeat-buy but not be brand loyal in a literal sense.

Researchers define brand commitment as the clinch facet of brand preference

and brand loyalty as the attitudinal facet.

Commitment though is a stronger expression of brand preference and brand

loyalty. Someone may favourably evaluate a brand and repeat - buy the brand,

but still not be truly committed to the brand (Keller, 1998).


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Oliver (1999) describes the consumer who fervently desires to re-buy a product

and will have no other product. At still another level, he posits a consumer who

will pursue this quest against all odds and at all costs. This latter condition

defines ultimate loyalty.

Lamb, Hair, and McDaniel (1998) state that brand loyalty is a consistent

preference for one brand over all other brands.

TheAmerican Marketing Associationdefines brand loyalty as:

1. "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" (sales promotion definition).

2. "The degree to which a consumer consistently purchases the same brand within

a product class" (consumer behavior definition).

Following years of cruel captivity, one of the Beirut hostages stumbled down the

road after being released by his captors in the middle of the war-torn city and

was eventually picked up by a passing car. He explained who he wasand added:

I could really do with a Heineken (Crainer, 1995).

The point being focused on in the above quote is that after being held captive for

a lengthy period, the former hostage still remembered the brand name. All

thoughts of the product were secondary to the brand name. This can be

regarded as a triumph for Heineken. The foregoing example illustrates the

ultimate aim of brand loyalty.
http://en.wikipedia.org/wiki/American_Marketing_Associationhttp://en.wikipedia.org/wiki/American_Marketing_Associationhttp://en.wikipedia.org/wiki/American_Marketing_Associationhttp://en.wikipedia.org/wiki/American_Marketing_Association


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2.2 LEVELS OF BRAND LOYALTYKapferer (2005) believes that there are three levels of brand loyalty (see Figure 2.1).

Figure 2.1 The three facets of brand loyalty

SINGLE PRODUCT

REPEAT PURCHASE

TRAIL OF EXTENTIONSOR BRAND EXTENSION

Source: Kapferer, 2005

2.2.1 Potential loyals

According to Kapferer (1999) particular brands may receive favourable

attitudes from consumers. These consumers are potentially loyal to a

specific brand. Potential loyal consumers are loyal only if a tailor-made

programme is devised to increase their rate of purchase of a particular

brand.

2.2.2 Pseudo loyals

Pseudo loyals, also known as repeat-buyers, do not hold strong attitudes

towards a brand and only purchase a brand because of the brands price

or availability. Reinforcement of choice and increased perception of the

brands superiority will ensure brand preference by a consumer.

POTENTIAL

LOYALS

ACTIVE

COMMITED

LOYALS

PSEUDO

LOYALS


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2.3.3 Active and committed loyals

Kapferer (1999) comments that active and committed loyals should be

induced to try more and more new products, whether line or brand

extensions.

Aaker (2001) follows a somewhat different approach to describing the

levels of brand loyalty (see Figure 2.3). The bottom level of the pyramid in

Figure 2.3 represents the price buyers or switchers. The brand name does

not influence the purchase decision of these consumers and each brand is

perceived to be adequate to satisfy the consumers need. The consumer

purchases whatever is on sale, or is convenient to purchase. This

particular level consists of non-loyal buyers who are completely indifferent

to the brand.

Figure 2.3 The loyalty pyramid

CommitedBuyer

Like the BrandConsider it a friend

Satisfied Buyerwith Switching cost

Satisfied/Habitual BuyerNo reason to change

Swithchers/Price SensitiveIndifferent-No Brand Loyalty

Source:Aaker, 2001


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The second level consists of habitual buyers, which includes consumers who are

satisfied, or at least not dissatisfied with a brand. There is no degree of

dissatisfaction that is sufficient to stimulate a change especially if the change

involves effort. Loyalty of consumers who form part of this level can be

vulnerable to competitive offerings especially if competitors can create a benefit

that is visible to the consumer. If the benefit is not visible, competitors may find

it difficult to reach the habitual buyers since there is no reason for these buyers

to be on the lookout for more alternatives as these alternatives do not show

more visible benefits if compared with the existing brand.

Level three represents satisfied buyers (also known as switching-cost loyals).

Should the satisfied buyer consider switching to another brand it will be coupled

with switching cost, that is, cost in terms of time, money or performance risk.

For competitors to convince a satisfied buyer to switch a brand, the competitive

brand needs to overcome the switching cost by offering an inducement to switch

or by offering a benefit large enough to compensate.

The fourth level of Aakers pyramid is made up of those consumers who truly like

the brand. The consumers preference may be based upon an association such

as a symbol, experience, or perceived high quality. Sometimes consumers

struggle to identify reasons why loyalty exists toward a brand, especially if the

relationship has been a long one. Sometimes just the fact that there has been a

long-term relationship can create a powerful effect, even in the absence of a

friendly symbol or other identifiable contributor to liking.

Finally, the top level of the pyramid represents the committed buyers who are

proud users or discoverers of a brand. The brand is very important to them

either functionally, or as an expression of whom they are. The consumer

possesses so much confidence in the brand that the brand will be recommended

to other consumers.


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Aaker (2001) notes that there will be consumers who will exhibit some

combination of the above five loyalty levels, and other consumers who might

have profiles somewhat different from the above levels. The five levels do,

however, provide a feeling for the variety of forms that loyalty can take and how

it impacts upon brand equity.

2.4 PHASES OF BRAND LOYALTY

Oliver (2007) argues that there are different attitudinal phases of loyalty and that

consumers can become loyal at each attitudinal phase of the attitude

development structure. In theory, consumers first become loyal in the cognitive

sense, followed by loyal in the affective sense, then by loyal in the conative

manner and finally, in the behavioural sense. The final stage is also called action

inertia.

2.4.1 Cognitive loyalty

In this stage loyalty is based on brand belief only. The brand attribute

information available to the consumer determines whether one brand is

preferred above its alternatives. Loyalty to the brand in this stage is therefore

based on the brands attribute performance levels and the available information

about the brand. This loyalty is, however, of a very shallow nature and applies

mostly to transactions of a routine nature, for example, utility provision trash

pick-up. During these routine transactions satisfaction is hardly ever processed

and the depth of loyalty is no deeper than mere performance. If satisfaction is

processed, it becomes part of the consumers experience and begins to take on

affective overtones.

2.4.2 Affective loyalty

At this phase of loyalty development, a number of satisfying usage occasions

results in the development of a liking, or attitude towards the brand. The


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consumer becomes loyal due to the pleasurable satisfaction derived from using

the brand. Whereas cognition is directly subject to counter argument, affect is

not easily dislodged. However this form of loyalty remains subject to switching,

as evidenced by data that show that large percentages of brand defectors claim

to have been previously satisfied with their brand. It would be more desirable,

for the organisation, if consumers were loyal at a deeper level of commitment.

2.4.3 Conative loyalty

Conation, by definition, implies a brand - specific commitment to repurchase.

This stage of loyalty is brought about by repeated episodes of positive affect

towards the brand. Conative loyalty is a loyalty state that, at first, appears to

result from a deep commitment to rebuy. However, this commitment is more to

the intention to rebuy the brand and not to the brand itself.

2.4.4 Action loyalty

In the action loyalty phase, the motivated intention in the previous loyalty state

is transformed into readiness to act. In addition to the intention to re-buy the

brand, the consumer is also motivated by a desire to overcome obstacles that

might prevent the action. If this is repeated, an action inertia develops, thereby

facilitating repurchase.

The various phases of loyalty can therefore be summarized as follows: cognitive

loyalty focuses on the brands performance aspects, affective loyalty is directed

towards the brands likeableness, conative loyalty is experienced when the

consumer focuses on wanting to re-buy the brand, and action loyalty is

commitment to the action of re-buying.

2.5 DRIVERS OF BRAND LOYALTY

Once consumers have decided to buy a particular type of product, they have to

decide on the brand. Consumers typically consider only a restricted set of brands


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out of the many available (known as a consideration set). By identifying the

factors that influence consumer brand loyalty, suppliers and marketers will have

a clear understanding of a consumers consideration set, and can nurture their

loyalty and attract new consumers based on it (Davis, 2000).

Davis (2000) has identified a list of factors that is important in driving the brand

loyalty of consumers. Accordingly, a brand deserving of loyalty:

Provides high-quality performance.

Performs dependably and consistently.

Ensures the brand has been used for a long time.

Provides high value for the price.

Fits the consumers personality.

Effectively solves the consumers problems.

Delivers unique benefits.

Supports the brand with good customer service.

The above list of factors indicates that the benefits and values consumers receive

from a brand are the major drivers of brand loyalty and will ultimately lead to a

premium price for a brand (Davis, 2000).

Consumers that are considering purchasing a brand, scan the brand options and

develop a consideration set. Within the consideration set, consumers develop a

hierarchy of brands based on their own value assessment and then select the

brand at the top of the value hierarchy (Neal, 2009). Srinivason, Kamakura and

Russel (in Neal, 2009) developed the brand value model (see Figure 2.4) that

can serve as a key tool for developing a deeper understanding of what will keep

consumers loyal to a brand. The value model has three elements, namely, price,

the bundle of tangible deliverables (product attributes) and the bundle of

intangible attributes (imagery drivers as seen in Figure 2.4). Collectively they are

called the brand equity. Brand equity is discussed in detail in section 3.8. Each


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element and sub-element of this model can be viewed as having a weight. Each

individual purchaser has his/her own set of weights that is called their preference

structure, or more accurately, their value structure. Each purchaser has a unique

valuation equation for each product or service category in which they have some

experience. This valuation equation provides the purchaser with a preference

structure in order to make a choice among a set of competing products or

services. Rational purchasers would choose the best value. It is therefore clear

that choice is driven by value. If the organisation knows the purchasers value

equation, it can very accurately predict their choice among a set of competing

products/services in a category.

Figure 2.4 Brand value model

VALUE

Price Product/Servicedeliverables

Company/Brandequity

Purchase Price Attribute 1 Image driver 1Operating Cost Attribute 2 Image driver 2

Attribute 3 Image driver 3Source: Neal, 2009

Davis (2000) concurs with Neal (1999) that value is the most simple and

accurate answer to what drives consumers to be brand loyal. Incremental

improvements in consumer satisfaction may improve consideration, but there is

overwhelming evidence that they do not improve loyalty - value does.

Marketers could make use of the model (Figure 2.4) to predict the drivers that

create consumers loyalty towards a brand.


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Desire and availability also drive brand loyalty. Years ago Coca-Cola formulated a

slogan saying that Coke should always be within an arms length of desire. Both

desire and availability were important to Coke. (Hofmeyr & Rice, 2000).

Two more drivers of brand loyalty include relationship and market presence.

According to Hofmeyr and Rice (2000) relationship and market presence lead to

lots of loyalty and they establish a framework for understanding what drives

people to buy what they do. Figure 2.5 highlights these factors and their

elements.

Figure 2.5 Framework for understanding what people buy

What a consumer buys

Relationship with each brand Each brands market presenceEverything the consumer associates Distribution, size of sales force,with, thinks or feels about each brand share of voice, relative price,

in-store position.

Source: Hofmeyr & Rice, 2000: 90

(a) Relationship

The relationship between a consumer and a brand will determine to what extent

a consumer will consider purchasing the same brand over and over. Consumers

will develop a desire to purchase the brand or to use the brand. This desire may

be of varying strengths based on the different options that are available in the

consumers mind. This will then lead to a psychological attachment between the

consumer and the brand that will result in a positive or negative relationship

(Hofmeyr & Rice, 2000).

(b) Market presence

The market presence of a brand is everything about the brand that is external to

the consumers mind, namely, distribution, in-store position, relative price, et


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cetera. It does not help a brand if the consumers are looking to purchase a

brand, but it is unavailable (Hofmeyr & Rice, 2000). Mariotti (1999) lists a few

more factors that drive brand loyalty. These include:

value (price and quality);

image (both the brands own personality and its reputation);

convenience and ease of availability;

satisfaction;

service; and

guarantee or warranty.

2.6 THE IMPORTANCE AND VALUE OF BRAND LOYALTY

Kapferer (2009) and Aaker (2005) confirm the importance and value of brand

loyalty:

Many firms have taken their consumers for granted, only to see them

dissipate when competitors attack(Aaker, 2005).

A brand can only be strong if it has a strong supply of loyal consumers

(Kapferer, 2009).

With a high level of brand loyalty, a firm can allow itself the luxury of

pursuing a less risky follower strategy(Aaker, 2005).

Kapferer (2009) believes that an existing base of loyal consumers provides

important, sustainable, competitive advantages to an organisation, because:

Loyal consumers are more profitable.

Loyal consumers spend more.

Loyal consumers are less sensitive when it comes to the price they should pay

for the brand.

Loyal consumers are also a positive word-of-mouth source.

Loyal consumers are five times less costly to contact than nonconsumers.


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2.7 METHODS AND STRATEGIES FOR BUILDING BRAND LOYALTY

Crainer (1995) confirms that loyalty is an important key to the success of a

business. In todays highly competitive business environment managers tend to

focus so much on beating the opposition, negotiating prices, securing orders and

delivering the product that managers forget to ensure that customers remain

customers. Failure to retain and attract customers can cost businesses huge

amounts of money annually. Research in the United States of America has shown

that a 5% decrease in the number of defecting consumers led to a profit

increase of between 25% and 85%.

In order to build brand loyalty it is important that organisations implement a

brand loyalty strategy. The researchers study of the relevant literature has

shown that organisations implement various types of brand loyalty strategies,

depending on the situation. These strategies can include creating, maintaining

and reinforcing brand loyalty.

A number of strategies that organisations can implement to create and maintain

loyalty among their regular consumers are shown in Figure 2.6. A discussion of

these strategies follows the figure.

Figure 2.6 Creating and maintaining brand loyalty

Treat the Customer right

Stay close to the Customer

Measure/Manage

Customer satisfaction Brand Loyalty

Create Switching cost

Provide extras

Source:Aaker, 2001


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2.7.1 Treat consumers right

Consumers should be treated with respect. The objective should be to ensure

that there is a positive interaction between the organisation and the consumer.

2.7.2 Stay close to the consumer

Organisations with strong consumer cultures will always find ways to stay close

to their consumers. Regular consumer contact by the organisation sends a signal

that the consumer is valuable to the organisation. If consumers feel that they are

valued, they are likely to remain loyal to the organisation and its brands that

make them feel important.

2.7.3 Measure/manage customer satisfaction

Regular marketing research regarding consumer satisfaction or dissatisfaction is

particularly useful in understanding how consumers feel and how they adjust

their brand choices. It is, however, important for the market research to be

timely, sensitive and comprehensive.

2.7.4 Create switching costs

One way to create switching costs is to create solutions to customers problem

that may involve redefining the business.

Loyalty programmes are another approach used to reward consumers for their

brand loyalty. Lamb, et al. (2000) concur with Aaker (2001) that brand loyalty

programmes help the organisation to keep its valuable consumers loyal and

profitable. The loyalty programmes reward loyal consumers for making multiple

purchases of a specific brand with the objective of building long term, mutually

beneficial relationships between the organisation and its key consumers.


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2.7.5 Provide extras

A sample from the bakery, or a cooking recipe is sometimes all that is needed to

change a consumers behaviour from tolerance to enthusiasm. It is all about

providing a few unexpected extras and making a good impression on the

consumer about the brand.

2.8 STRATEGIES FOR MAINTAINING BRAND LOYALTY

According to Kapferer (2009), there are two actions that an organisation can

take to keep consumers loyal.

Firstly, an organisation can apply a defensive strategy to ensure that the

consumer has no reason to leave the organisations brand for that of the

opposition. For the organisation to be successful using the defensive strategy, it

is essential to identify the causes of disloyalty, and dissatisfaction among

consumers. One of the worst situations that a brand can find itself in is when a

consumer is dissatisfied, and then spreads negative stories among friends, family

and colleagues without giving the negative feedback to the brand representative.

That is why it is so important to treat complaints with diligence, care and

respect.

Kapferer (2009) discusses the example of LOreal Coiffure to illustrate the

importance of seeking client satisfaction in attempting to maintain brand loyalty.

LOreal Coiffure is nowadays a company with an innovative and conquering spirit

as it launches one new product after another. The company knows the needs of

its consumers; and hairdressers like its products. However, the company forgot

about keeping their customers happy by making sure that deliveries were on

time and that there was always enough stock. A hairdresser would for example

not know whether the tube of light golden brown colouring ordered on Tuesday

would arrive on time for the clients appointment on Friday. This caused the sales


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of the company to level off for a while. To ensure client satisfaction, the service

and the product is equally important.

Organisations can also keep consumers loyal by adopting an offensive

strategy. The objective of an offensive strategy is to create a personalised

relationship with the consumer. To ensure the success of the offensive strategy,

the brand must become a landmark of personal attention. It is important to

remember that a loyal consumer wants to be recognised. Therefore the

consumer has to be identified, a direct bond has to be established and the

consumer has to be the focus of special attention. This is why relationship-

marketing uses databases, consumer clubs andcollective events which unite the

best consumers of the brand.

Another strategy that an organisation can make use of to maintain brand loyalty

is to create brand loyalty at a very young age. With billions of dollars at their

disposal and a say in how parents spend household income tweens and

younger kids are increasingly the targets of brand building efforts by marketers

of everything from cereal to air travel. (Rosenberg, 2001). Brand loyalty can be

maintained if the young consumer is made to feel that there is a special

relationship between him/herself and the brand.

A popular method to create and maintain brand loyalty among young consumers

is that organisations are adding new ingredients to familiar brands and lend the

organisations brand name to a wide range ofmerchandise from TV programmes

to pyjamas. A good example is that the kids will go to Burger King because of

the Nickelodeon toys they receive with the food (Rosenberg, 2001).

According to Rasmussen and Cohen (2000), another strategy to maintain brand

loyalty is to form an emotional link with consumers. Kathman (in Rasmussen &

Cohen, 2000), president of Libby Perszyk Kathman, a brand identity organisation,


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concurs with Rasmussen and Cohen that a brand is ultimately a relationship,

and that customer experiences shape that brand. Consumers care more about a

brand when they can define the brand for themselves. In creating a culture

around the brand the organisation helps in developing that relationship. It is also

very important for the organisation to refresh the brand and its image, in the

consumers mind.

Another brand loyalty strategy is to promote the organisations values.

Organisations should promote their values in advertising by confirming their

support towards charities and community events. A good example is MTN

foundation

4.7 SUMMARY

It is fairly simple to attract new customers. The key, however, is to retain them.

In order to achieve this, an organisation needs to build and maintain brand

loyalty towards its brand. Building brand loyalty involves continuing to serve the

customer in a satisfactory way while maintaining such requires the art of letting

your consumers knows that their interest is in your hearth always.

This chapter actually made explicit the concept of BRAND, BRANDING, LOYALTY

and BRAND LOYALTY. In addition, methods / strategies for building, and

maintaining brand loyalty was duly justified.

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