Brand loyalty

Brand loyalty, in marketing, consists of a consumer's commitment to repurchase or continue to use the brand. Consumers can demonstrate brand loyalty by repeatedly buying a product, service, or by other positive behaviors such as by engaging in word of mouth advocacy. This concept of a brand displays imagery and symbolism for a product or range of products. Brands can engage consumers and make them feel emotionally attached. Consumers' beliefs and attitudes make up brand images, and these affect how they will view brands with which they come into contact. Brand experience occurs when consumers shop or search for, and consume products. Holistic experiences such as sense, relation, acting, and feeling occur when one comes into contact with brands. The stronger and more relational these senses are to the individual, the more likely it is that individual will make repeat purchases. After contact has been made, psychological reasoning will occur, followed by a decision to buy or not to buy. This can result in repeat purchase behavior, thus incurring the beginning brand loyalty. Brand loyalty is not limited to repeat purchase behavior, as there is deeper psychological reasoning as to why an individual will continuously re-purchase products from one brand. Brand loyalty can be defined as the "behavioral willingness" to consistently maintain relations with a particular brand. In a survey of nearly 200 senior marketing managers, 68 percent responded that they found the "loyalty" metric very useful. Brand loyalty occurs when consumers are willing to pay higher prices for a certain brand and go out of their way for the brand, or think highly of it. Brand loyalty can predict brand performance outcomes. It also highlights the importance of marketing communication when trying to promote a certain product that's not doing as well as other brands. Marketers are able to look at the patterns of brand loyalty and pick out characteristics that make that product thrive. Examples of brand loyalty promotions include My Coke Rewards, Pepsi Stuff, and Marriott Rewards. Long-term impact on business Brand loyalty in marketing consists of a consumer's devotion, bond, and commitment to repurchase and continue to use a brand's product or service over time, regardless of changes with competitors' pricing or changes in the external environment. Brand loyalty reflects a customer's commitment to remain in a relationship for a long period of time with a brand. A critical factor of building brand loyalty is developing a connection or relationship between the consumer and the brand. When an emotional relationship is created between the consumer and the brand, this leads to a strong bond and a competitive advantage for that particular brand. Loyalty consists of both attitudinal and behavioral components. Attitudinal loyalty relates to the customer's willingness to purchase a product or service from the brand at any reasonable cost. Behavioral loyalty is re-purchasing. Both behavioral and attitudinal components are important. One example is that a consumer displays behavioral loyalty by buying Coke when there are few alternatives available and attitudinal loyalty when they will not buy an alternative brand when Coke is not available. The attitudinal component is psychological, this leads to the behavioral action of repeat purchase. It is the attitudinal loyalty that drives most loyalty behavior and ensures loyalty over time, not just with one purchase. “Brand loyalty is desired by firms because retention of existing customers is less costly than obtaining new ones. Firms profit from having loyal customers”. Benefits for companies outside of Apple Fifth Avenue, 2008 Brand loyalty profits firms by saving them money. Benefits for companies associated with loyal consumers include: • Acceptance of product extensions. • Defense from competitors' cutting of prices. • Creating barriers to entry for firms looking to enter the market. • Competitive edge in market. • Customers willing to pay high prices or accept far-reaching end user agreements • Existing customers cost much less to serve. • Potential new customers. Generally speaking, brand loyalty will increase profit over time as firms do not have to spend as much time and money on maintaining relationships or marketing to existing consumers. Loyal long-term customers spend more money with a firm. ==Customer behavior==

Brand loyalty leads not only to repurchasing. 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". Previous studies showed that customer loyalty is affected by customer satisfaction, but the association differs based on customer switching costs (procedural, relational, and financial). Real brand loyalty exists when customers have a high relative attitude toward the brand which they then exhibit through repurchase behavior. 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. From the point of view of many marketers, loyalty to the brand — in terms of consumer usage — is a key factor. However, companies often ensure that they are not spending resources to retain loyal but unprofitable customers. Usage rate the 'rate' of usage, to which the Pareto 80-20 rule applies: Kotler's "heavy users" are disproportionately important to the brand (typically, 20 percent of users accounting for 80 percent of usage — and of suppliers' profit). As a result, suppliers often segment their customers into "heavy", "medium", and "light" users; as far as they can, they target "heavy users". However, research shows that heavy users of a brand are not always the most profitable for a company. • Hard-core Loyals — who buy the brand all the time. • Split Loyals — loyal to two or three brands. • Shifting Loyals — moving from one brand to another. • Switchers — with no loyalty (possibly "deal prone", constantly looking for bargains or "vanity prone", looking for something different). Again, research shows that customer commitment is a more nuanced a fine-grained construct than what was previously thought. Specifically, customer commitment has five dimensions, and some commitment dimensions (forced commitment may even negatively impact customer loyalty). ==Psychological reasoning==

A person's psychological disposition affects which brands they are attracted to. Cognitive responses can be matched with brand personalities. Brand personalities are broken down into five categories of traits: sincerity, ruggedness, competence, sophistication and excitement. Consumers make constant evaluations on every aspect of their lives and these make up attitudes. Consumers take notice of campaigns, and a wave effect can occur, due to the relational sense of the campaign to the common person's emotions. Once a consumer establishes an emotional bond with a brand, the consumer is more likely to be able to recall the brand than consumers who have been subject to a large amount of content information. This engagement makes consumers aware and knowledgeable of the brand's attributes, so this engagement can shape behavioral brand loyalty, as the consumer feels that they know the brand well. Fred Reichheld, one of the most influential writers on brand loyalty, claimed that enhancing customer loyalty could have dramatic effects on profitability. However, new research shows that the association between customer loyalty and financial outcomes such as firm profitability and stock-market outcomes is not so straightforward. An organization's ability to attract and retain customers is vital to its success. Customer loyalty requires a strong appetite by the customer for a product. Marketing tools such as integrated marketing communications (IMC) and branding can increase perceived attraction between the consumer and the brand. These tools boost emotional response and attachment to the brand, and influence feelings the customer has for a brand; both are important for congruency and a relationship. This in turn leads to the development of brand loyalty. Relationship development and maintenance can also be achieved through the use of loyalty programs or a celebrity endorser. These can help to increase a bond between a brand and a consumer. IMC is defined as "integrating a variety of convincing messages across various forms to communicate with and develop relationships with customers." IMC can convey the brand image, increase awareness, build brand equity, and achieve shared values between the consumer and the brand. IMC and brand loyalty IMC and branding are both marketing tools for increasing the brand loyalty of consumers. The decisions made around communications and branding should be based on solid and factual market research about the consumers. If the brand or the IMC do not seem to be relevant to the target market, consumers will not pay attention. An example of this is that high customization, creativity, and a more direct voice is recommended for messages directed towards Generation Y consumers as Generation Y want to be treated differently from the rest of the market and marketers should acknowledge this. Loyalty programs reward and encourage customers, which is necessary for customers to want to repurchase. The consumer should feel a connection with the brand to want repeat purchase and to exhibit other brand loyalty behaviors such as positive word of mouth. "A loyalty program is an integrated system of marketing actions that aims to make member customers more loyal to a brand." Celebrity endorsers moderate the relationship between the consumer and the brand by personifying the brand to match the perceptions of the consumer. Using a celebrity endorser can build a relationship between consumers and a brand because endorsers can represent similarities between themselves and the consumer, and themselves and the brand. Celebrities make marketing tactics more convincing and marketing communications more effective. The use of a popular celebrity endorser could personalize the brand for the consumer and create the relationship between the consumer and the brand. To ensure endorsement is successful, the celebrity should match the brand and the consumer. The effect of using a celebrity endorser that consumers look up to and want to emulate can lead to increased congruence between the values of the consumers and the brand, and improve the relationship between the two. 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 customers will buy that brand next time as part of a portfolio of brands they prefer. 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 emphasizes the need for managing continuity. Other issues Once brands have become well established and have a steady flow of consumers, problems may arise such as slips in product quality or in safety of products, or lack of customer care. Such problems can be detrimental to a brand that has become too confident. Many brands continue to get away with scandals, and it does not affect their image in any way. For example, the Coca-Cola brand scandals including murders in Colombia, crimes in India, and various health dangers; all of which relate back to the company name. Yet the power of the Coca-Cola brand puts it at the top of its field. The reputation of such a massive organization is sometimes slow to negatively change with the powerful distribution rights and funds to create some of the most effective ad campaigns. ==Loyalty in business markets ==

In industrial and other business markets, Yoram Wind noted in 1970 that at the time, source loyalty among industrial buyers had not received the level of academic interest paid to consumer brand loyalty. A study he conducted on loyalty in the purchase of electronic components on the United States west coast found "substantial evidence" that buyers in that sector remained loyal to certain brands. Some organizations may regard "heavy users" as "major accounts" to be handled by senior sales personnel and managers; whereas "light users" may be handled by the general sales force or by a dealer. ==See also==