Advantages Of Brand Loyalty
2.2 Brand loyalty
Brand loyalty can be defined as the extent of consumer faithfulness towards a specific brand and this faithfulness is expressed through repeat purchases and other positive behaviors such as word of mouth advocacy, irrespective of the marketing pressures generated by the other competing brands (Kotler and Keller 2006)
Research shows that, 1% increase in customer loyalty equals 10% cost reduction, 5% increase in customer loyalty increases the profitability of the company by 40-95%. And also the cost of attracting a new customer is five times more than the cost of retaining an existing customer. (Kirti Dutta, 2012; ‘Brand management principles and practices’)
There are several advantages that can be gained through brand loyalty.
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Only when the price of a particular brand is comparatively low, the farmers would naturally prefer to low priced brand. Otherwise farmers would naturally continue to purchase the same brand.
Raj Reddy and Pruthviraju (1999) studied about buying motives of rural consumers about seeds and different sources of information about brands with regard to seeds. It was found that factors influencing brand loyalty of farmers were dealer’s suggestions, quality product and co-farmers. The problems faced by farmers were supply of seed or poor quality seed, higher price, adulteration and irregular supply of seeds.
Burke (2001) created a brand equity index comprising of three components, best described as brand equity molecule. This is overarching device of retaining and attracting customers. The three atoms, which embedded to molecule, were image, value and loyalty. Image and value perceptions pull in new customers, while loyalty retains
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