Brand loyalty reflects as customers’ preference to purchase a specific brand in a product category, which occurs because customers think that the brand provides good product functions, images and high level of quality at a suitable price (Mao, 2010). The long-held belief that consumers loyal to a particular brand will increases not only the ongoing sales, but also more profitable sales. Given the establishing and keeping loyal consumers has become increasingly difficult in today’s competitive environment, the majority of businesses are realizing the demands to develop and maintain brand loyalty to enhance their sales volume, to get premium price, to retain their customers rather than seek and then ensure long-run profitability (Gordon, et al., 2004). Actually, Giddens (2010) categorized three reasons to further explain the importance of brand loyalty. Firstly, reduce the marketing costs (like advertising, distribution), as the business not need to incur customer acquisition costs especially in service markets.
A more realistic goal for businesses is to make customers as loyal as possible – to maximize customer share of wallet, frequency of purchase and overall profitability. Benefits of Customer Loyalty There are multiple benefits of having more loyal customers for the business, such as: Acquiring a new customer will cost more than maintaining an existing one Loyal customers are less price-sensitive Loyal customers are more likely to give free word-of-mouth advertising When a new product is launched, loyal customers will be more likely to try that product So the above points tell us the benefits that businesses are going to achieve by having more loyal customers. But are there any benefits of loyalty for the customers? Yes, there are, such as: Minimize the perceived risk, increase confidence that the organization will not produce a faulty product and gives a sense of satisfaction Save decision effort by substituting repeated and conscious decisions Loyal customers can get some special benefit such as free or faster delivery, more discount, free goodies, etc. What are the different ways of measuring and managing Customer
(2006) reported that a corporation’s brand image impacts customer attitudes, both in a crisis and when participating CSR initiatives. To rephrase it, CSR activities can enhance positive reputations, and a positive reputation firm is considered more favorably and has more supportive attitude outcomes than a less reputable firm. In fact, Ajzen and Fishbein (1980) already defined the consumer attitude theory refers to a fixed causal sequence that customer behaviors associates with their attitudes, subjective norms and purchase intentions. This kind of purchasing behavior based on consumers’ perception of the brand can benefits them and is regarded to be a basis of attitude and subjective norm. Johnson et al.
This also benefits the consumer who will assume the branded item will come with much lower risk. Unlike the financial method, the brand extension method is difficult to measure quantitatively. Consumer based is how strong a consumer’s attitude is towards a brand. How strongly a consumer feels about a particular brand is built with experience with a product offered by the company. A strong brand attitude leads to perceived quality and ultimately brand loyalty.
It is easy for consumers to understand that the price will increase if they miss the promotion. Meanwhile, low price of the product may make consumers feel that the product is very reasonable. Therefore, price promotions may result in raising the perceived value of the product or service and having an influence on consumers’ buying intention. So, the thesis propose
Definition of a Brand A brand is an emotional and physiological relationship a firm has with a customer, strong brands inspires thoughts, feeling and sometimes-physiological reactions from a customer. A brand is a wellspring of a guarantee to its customers. It promises important separated profits. It does so not just to place itself into the buy attention set, however considerably all the more critically, to be the brand browsed that buy thought set. (Lynn B Upshaw 1995) The Branding Strategies Exist in Three Types a) Unique Brand If a company sells only one product and succeeds in becoming the leader, the product should be able to be distinguished from other products so that there will not be imitations of the product to take advantage of
Loyalty is one strategy that can be used to reduce perceived risk. While buying a product , a consumer assesses how well the attributes provided by different alternatives will satisfy their needs. When he perceives one brand to be higher in quality or need fulfilling than others, there exist a perceived brand difference (Van Trijp et al., 1996).This difference form a preference for a brand offering unique attributes and this preference generate Brand Loyalty (Dick and Basu, 1994; Muncy,
Besides, it helps to build brand loyalty. Customers who are frequent and enthusiastic purchasers of a particular brand are likely to become brand loyal. Cultivating brand loyalty among customers is the ultimate reward for successful marketers since these customers are far less likely to be enticed to switch to other brands compared to non-loyal customers. It also enables an organization to command a price premium. A strong brand will help an organization to differentiate the price from the rest and encourage their customers to pay for the intangible benefits they get from associating themselves with a brand that makes them appear cool fashionable, or clever.
Basically when a customer is prone to move to another brand instead of previously preferred brand, it is known as customers’ brand switching. There are various factors that influence a customer to switch to another brand (Hamlin, Lindsay and Insch, 2012). Better service, better quality, better features and better price provided by the other brand encourages the customers to go for other brand. Sales promotion in this case plays a crucial role. The sales promotion activities are designed to attract more customers to make purchase.