Brand loyalty

Brand loyalty

Brand loyalty, in marketing, consists of a consumer's commitment to repurchase or otherwise continue using the brand and can be demonstrated by repeated buying of a product or service or other positive behaviors such as word of mouth advocacy.

 Brand loyalty is more than simple repurchasing, however. Customers may repurchase a brand due to situational constraints (such as vendor lock-in), a lack of viable alternatives, or out of convenience. Such loyalty is referred to as "spurious loyalty". True brand loyalty exists when customers have a high relative attitude toward the brand which is then exhibited through repurchase behavior. This type of loyalty can be a great asset to the firm: customers are willing to pay higher prices, they may cost less to serve, and can bring new customers to the firm. For example, if Joe has brand loyalty to Company A he will purchase Company A's products even if Company B's are cheaper and/or of a higher quality.

An example of a major brand loyalty program that extended for several years and spread worldwide is Pepsi Stuff. Perhaps the most significant contemporary example of brand loyalty is the dedication that many Mac users show to the Apple company and its products.

 Loyalty

A second dimension, however, is whether the customer is committed to the brand. Philip Kotler, again, defines four patterns of behaviour:

1. Hardcore Loyals - who buy the brand all the time.
2. Softcore Loyals or shifting loyalty - loyal to two or three brands.

1. Switchers - with no loyalty (possibly `deal-prone', constantly looking for bargains or 'vanity prone', looking for something different).

 Factors Influencing Brand Loyalty

It has been suggested that loyalty includes some degree of pre-dispositional commitment toward a brand. Brand loyalty is viewed as multidimensional construct. It is determined by several distinct psychological processes and it entails multivariate measurements. Customers' Perceived value, Brand trust, Customers' satisfaction, Repeat purchase behaviour and Commitment are found to be the key influencing factors of brand loyalty.Commitment and Repeated purchase behaviour are considered as necessary conditions for brand loyalty followed by Perceived value ,satisfaction and brand trust

Industrial Markets

In industrial markets, organizations will regard the `heavy users' as `major accounts', to be handled by senior sales personnel and even managers; whereas the `light users' may be handled by the general salesforce or by a dealer.

Portfolios of Brands

Andrew Ehrenberg, then of the London Business School said that consumers buy 'portfolios of brands .They switch regularly between brands, often because they simply want a change. Thus, 'brand penetration' or 'brand share' reflects only a statistical chance that the majority of customers will buy that brand next time as part of a portfolio of brands they favour. It does not guarantee that they will stay loyal.

Influencing the statistical probabilities facing a consumer choosing from a portfolio of preferred brands, which is required in this context, is a very different role for a brand manager; compared with the - much simpler - one traditionally described, of recruiting and holding dedicated customers. The concept also emphasises the need for managing continuity.

Market Inertia

On the other hand, one of the most prominent features of many markets is their overall stability - or inertia. Thus, in their essential characteristics they change very slowly, often over decades - sometimes centuries - rather than over months. This stability has two very important implications. The first is that if you are a clear brand leader you are especially well placed in relation to your competitors, and should want to further the inertia which lies behind that stable position. This will, however, still demand a continuing pattern of minor changes, to keep up with the marginal changes in consumer taste (which may be minor to the theorist, but will still be crucial in terms of those consumers' purchasing patterns - markets do not favour the over-complacent.). But these minor investments are a small price to pay for the long term profits which brand leaders usually enjoy.

The second, and more important is that if you want to overturn this stability, and change the market (or significantly change your position in it), then you must expect to make massive investments to succeed. Even though stability is the natural state of markets, however, sudden changes can still occur and the environment must be constantly scanned for signs of these.