Role of the Brand in Developing Customer Loyalty
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Published: Tue, 06 Feb 2018
1.1 Nature of Assignment
· My project is about “The Role of Brand in the Development of Customer Loyalty”.
· It’s the part of MBA and it is the requirement of my institute, “THE UNIVERSITY OF WALES”, for the completion of our degree.
· The purpose of project is to determine the role of brand in the development of customer loyalty. After completion of this project I can easily understand that how brand helps in the development of customer loyalty.
· I am doing work on this project to collect data and other relevant information to build a relation between role of brand and customer loyalty and to prove that brand plays an important role in the development of customer loyalty.
· It is my project which is being supervised by a senior person allocated by my institute.
· In order to make my project more reliable field data will also be collected and analyzed.
· Data from the pre-research on this topic will also be studied to make my project well designed and easily understandable.
· From the company point of view my research work will be helpful to understand the relationship between brand and customer loyalty.
1.2 The Rationale for this Study
* Literature review has proved that customer loyalty affects by brand.
* Different work on this topic has been done which is in chapter# 2.
* It is a moralize agreement that brand affects customer loyalty.
* I will try to test this claim that the role of brand in the development of customer loyalty with the help of this project using primary and secondary research.
* In UK context it would be useful contribution towards this field.
* This research will be helpful in understanding the role of brand in the development of customer loyalty.
* In local environment findings from this project will be used in number of groups including companies, scholars and also researchers.
In marketing, a brand is a collection of feelings toward an economic producer. Feelings are created by the accumulation of experiences with the brand, both directly relating to its use, and through the influence of advertising, design, and media commentary. A brand is a symbolic embodiment of all the information connected to a company, product or service. A brand serves to create associations and expectations among products made by a producer. A brand often includes an explicit logo, fonts, color schemes, symbols, which are developed to represent implicit values, ideas, and even personality.
Some marketers distinguish the psychological aspect of a brand from the experiential aspect. The experiential aspect consists of the sum of all points of contact with the brand and is known as the brand experience. The psychological aspect, sometimes referred to as the brand image, is a symbolic construct created within the minds of people and consists of all the information and expectations associated with a product or service. The nicest approach to brand building considers the conceptual structure of brands, businesses and people.
1.4 Brand Loyalty
Brand loyalty is the ultimate goal a company sets for a branded product. Brand loyalty is a consumer’s preference to buy a particular brand in a product category. It occurs because consumers perceive that the brand offers the right product features, images, or level of quality at the right price. This perception becomes the foundation for a new buying habit. Basically, consumers initially will make a trial purchase of the brand and, after satisfaction, tend to form habits and continue purchasing the same brand because the product is safe and familiar.
Brand loyalists have the following mindset:
* “I am committed to this brand.”
* “I am willing to pay a higher price for this brand over other brands.”
* “I will recommend this brand to others.”
Importance of Brand Loyalty
There are three main reasons why brand loyalty is important:
Higher Sales Volume – The average United States Company loses half of its customers every five years, equating to a 13% annual loss of customers. This statistic illustrates the challenges companies face when trying to grow in competitive environments. Achieving even 1% annual growth requires increasing sales to customers, both existing and new, by 14%. Reducing customer loss can dramatically improve business growth and brand loyalty, which leads to consistent and even greater sales since the same brand is purchased repeatedly.
Premium Pricing Ability – Studies show that as brand loyalty increases, consumers are less sensitive to price changes. Generally, they are willing to pay more for their preferred brand because they perceive some unique value in the brand that other alternatives do not provide. Additionally, brand loyalists buy less frequently on cents-off deals – these promotions only subsidize planned purchases.
Retain Rather than Seek – Brand loyalists are willing to search for their favorite brand and are less sensitive to competitive promotions. The result is lower costs for advertising, marketing and distribution. Specifically, it costs four to six times as much to attract a new customer as it does to retain an old one.
1.5 Customer Loyalty
When a consumer finds that a particular brand is delivering the best products and services for him and that brands solves his problems with their products, he begins to identify that brand with a certain quality and develops a loyalty for it. In fact, if you have a customer who is committed to your brand, chances are that he will choose your product or service over the others that are available in the market.
Customer loyalty plays a major role in making your business successful. If you are capable of retaining as much as 5% of your old customer base, then your business can grow up to 75%. Another great thing about your old customers who rely on you is that they will tell their friends, family and acquaintances about your products and services. In this manner, your business will get the best kind of advertising possible. Similarly, a customer who does not like your products might do some negative marketing for you, so you need to be on your toes and ensure that all your customers are satisfied with you. This will help you convert your prospective customers to your clients.
1.6 The Role of Brand in the Development of Customer Loyalty
In order to keep your old customer base alive and loyal towards your brand. You need to have something unique about your brand. If you are able to have a unique feature that your customers love, then chances are that your customers will stick to your company and even tell others about it. The key is to develop this USP or Unique Selling Point in order to entice the customers and keep them loyal. If your customer is aware of your USP and benefits from it, you will get a brand loyalty that will be enough to keeps your business booming.
Customer loyalty is more than simple repurchasing, however. Customers may repurchase a brand due to situational constraints, 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.
2. LITERATURE REVIEW
To determine the role of brand in the development of customer loyalty some articles have been studied. After studying these articles we came to know that how much research has been done by different persons on this topic. Previous research putts light on different kinds of factors related to development of customer loyalty that how customer loyalty can be measured and how properly or effectively brand can be managed and implemented. And what models can be used to make a particular brand more successful.
Previous research also explains that what factors are responsible for the decline of a brand. So we came to know about loyalty that a customer’s loyalty can be determined by studying that how repetitively customer make purchasing of products of a particular brand when some others alternatives are available to customers.
Several studies have been conducted in this area following are the list of some key articles and a brief description will be given following.
2.1 Summaries of Articles
1st article is about Brand Loyalty which is being studied by Nancy Giddens, Agricultural Extension Value Added Marketing Specialist.
Brand Loyalty has been proclaimed by some to be the ultimate goal of marketing. In marketing, brand loyalty consists of a consumer’s commitment to repurchase the brand and can be demonstrated by repeated buying of a product or service or other positive behaviors such as word of mouth advocacy. True brand loyalty implies that the consumer is willing, at least on occasion, to put aside their own desires in the interest of the brand. Brand loyalty is more than simple repurchasing, however. Customers may repurchase a brand due to situational constraints, 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.
This article is about decline of brands by James Surowiecki. The truth is we’ve always overestimated the power of branding while underestimating consumers’ ability to recognize quality. When brands first became important in the US a century ago, it was because particular products – Pillsbury flour or Morton salt – offered far more reliability and quality than no-name goods. Similarly, many (and arguably most) of the important brands in American history – Gillette or Disney – became successful not because of clever marketing, but because they offered something you couldn’t get anywhere else. (Gillette made the best razors; Disney made the best animated movies.) Even Nike first became popular because it made superior running shoes. Marketers looked at these companies and said they were succeeding because their brands were strong. In reality, the brands were strong because the companies were succeeding.
Over time, certain brands came to connote quality. They did provide a measure of insurance – which in turn made firms less innovative and less rigorous. (Think of the abominable cars General Motors, Ford, and Chrysler made in the late 1960s through the 1970s – remember the Pinto? – in part because they assumed that they had customers for life.) That sense of protection is eroding in industry after industry, and instead of a consumer economy in which success is determined in large part by name, it’s now being determined by performance. The aristocracy of brand is dead. Long live the meritocracy of product.
This article is about customer engagement by Richard Sedley. Customer Engagement refers to the engagement of customers with one another, with a company or a brand. The initiative for engagement can be both consumer- or company-led and the medium of engagement can be on or offline. A customer’s degree of engagement with a company lies in a continuum that represents the strength of his investment in that company. Positive experiences with the company strengthen that investment and move the customer down the line of engagement.
This article is about Brand Engagement by Watson Wyatt. Brand Engagement is a term loosely used to describe the process of forming an attachment (emotional and rational) between a person and a brand. It comprises one aspect of brand management. What makes the topic complex is that brand engagement is partly created by institutions and organizations, but is equally created by the perceptions, attitudes, beliefs and behaviors of those with whom these institutions and organizations are communicating or engaging with.
As a relatively new addition to the marketing and communication mix, brand engagement sits in the space between marketing, advertising, media communication, social media, organizational development, internal communications and human resource management
This article is on Brand management by Neil H. McElroy. Brand management is the application of marketing techniques to a specific product, product line, or brand. It seeks to increase the product’s perceived value to the customer and thereby increase brand franchise and brand equity. Marketers see a brand as an implied promise that the level of quality people have come to expect from a brand will continue with future purchases of the same product. This may increase sales by making a comparison with competing products more favorable. It may also enable the manufacturer to charge more for the product. The value of the brand is determined by the amount of profit it generates for the manufacturer
3. RESEARCH METHODOLOGY
Research methodology will be discussed in the following section.
3.1 Theoretical Framework
The dependent variable, customer loyalty of branded casual wear companies depend upon two independent variables which are price and awareness. Most of the people in Pakistan belong to middle class and they prefer to buy products of low price with good quality.
So poor quality of these companies has affected its sale as well as customer loyalty.
We know that awareness of any product plays an important role to increase or decrease the customer loyalty.
The quality and comfort of branded products are close to local brands. Similarly the awareness of the branded casual wearing is low because of less impressive advertisement.
So, it is clear that the sale and customer loyalty is low because of high price and unawareness.
3.2 Research Objectives
Following are the objectives of this study:
1. To determine the importance of branding in creating customer loyalty.
2. To identify the characteristics of a brand that help in brand loyalty.
3. To investigate the reasons for brand preference.
4. How brand loyalty can be developed?
5. What makes the customer loyal?
6. To make recommendations for developing customer loyalty through branding.
In this, we will measure the customer loyalty whether the people are buying it or not and why. We have price and awareness as an independent variable and we will measure customer loyalty for different types of the branded casual wearing.
Awareness is an independent variable and we will measure it by the following indicators:
i) By asking the people whether they are aware or not.
ii) If yes, then from which media vehicle they became aware of it e.g. Newspapers, Magazines, T.V, Radio, Bill boards, word of mouth etc.
To perform this task, research was conducted in such a way that reflected the awareness towards branded casual wearing. The primary source of data collection was used and the instrument for data collection was personally administered “Questionnaire”. This questionnaire was administered personally due to sampling information, administrative control, and helping the respondents in answering technical questions. The population of the research consists of ultimate consumers. Therefore “Convenience Sampling” technique was used.
3.4 Research Design
The purpose of this research was to establish the relationship between independent variables high price & awareness and the dependent variable customer loyalty.
This is a field study because it examined the relationship between the variables. For this purpose questionnaire was developed to get response of the people. Neither the variables were controlled nor was artificial setting created for the study. The unit of analysis for this study is an individual and tool of data collection is questionnaire.
For data collection we have used convenience sampling technique.
Standardized questionnaire was designed for consumers. The questionnaire was developed in order to make it comprehensive, so as to enable the researcher to collect all needed information from consumers. The questionnaires was distributed and filled in by the consumers.
Methods of Data Collection
Population consisting of people who are using the branded casual wears were considered for the collection of data. Survey questionnaire was thus used to collect data from respondents in different areas and University of the Central Punjab.
Tool for Data Collection
Tool to collect data was survey questionnaire which was very carefully designed. It consisted of all the types of questions i.e. dichotomous questions and multiple choices. So as to acquire in depth knowledge from the consumers about the research problem. After preparation of questionnaire, it was shown to kind teacher for changes in it.
After developing and getting it approved, 5 copies of the questionnaire were filled out by the senior students of the University. The respondents faced only few problems which were then replaced and made it easier and comprehensive.
After pre-testing 50 copies were again distributed among the public and students.
We have selected the samples which gave maximum representatives of target market. These samples gave more reliable and accurate information because they are end users of branded casual wears and can provide better information about research problem.
Nature of the Study
The research study was applied research because it was performed to find solution of problem. “Why customer loyalty of branded casual wears is lower”.
After finding solution of problem, companies implement it to rectify problem situation.
Purpose of Study
The research has two main purpose first purpose is aimed at to be completed as a requirement of course. Second purpose was to study the impact of important factors that affect customer loyalty of branded casual wears.
Some of important factors to be studied were:
* Demographic factors like age, income occupation
* Brand name
All these factors were studied to find out all possible ways to maintain and to improve factors such as availability, quality, price, advertisement etc.
This is a field study because it examined attitude and behavior of the people towards low demand for branded casual wears. For this purpose we had surveyed different areas and got filled in the questionnaires from students. Variables were neither controlled nor manipulated and no artificial setting was created for the study.
The data for this research was collected over one month period.
We had 50 sample sizes. We went to the commercial and business areas to fill this questionnaire. The areas consisted of Green heith markets and white city commercial markets.
During our field work, we faced a few problems like negative responses from the respondents. Some of the persons hesitated & refused to fill questionnaire. But we faced all problems boldly as a good researcher.
3.5 LIMITATIONS OF THE RESEARCH STUDY
Our research has following limitations:
1) Lack of time
2) Cost for collecting data.
3) Sample size is small.
4. ANALYSIS OF SURVEY QUESTIONNAIRE, INTERPRETATION OF DATA AND TABULATION REPRESENTATION
Do you prefer branded clothes?
Response Frequency %age
Yes 41 82%
No 9 18%_
Total 50 100__
According to our analysis 82% respondents preferred branded clothes while 18% respondents out of our selected samples did not prefer branded clothes. So our analysis shows that majority of the people prefer branded clothes.
Brand is important for which item of clothing?
Items Frequency %age
Shirt 10 20%
Jeans 22 44%
Casual wears 18 36%
Total 50 100%
20% of respondents preferred branded shirts, 44% of respondents’ preferred branded jeans while 36% of respondents preferred branded casual wears. So according to our analysis its clear that majority of people prefer branded jeans.
Why do you prefer branded clothes?
Strongly agree Agree Disagree Strongly Disagree Total
High Quality 24 (48%) 18 (36%) 6 (12%) 2(4%) 50
Comfort 26 (52%) 15 (30%) 8 (16%) 1 (2%) 50
Durability 25 (50%) 18 (36%) 5 (10%) 2 (4%) 50
This graph shows that 48% respondents are strongly agreed, 36% respondents are agreed, 12% respondents are disagreed and 4% respondents are strongly disagreed that they prefer branded clothes due to high quality.
52% respondents are strongly agreed, 30% respondents are agreed, 16% respondents are disagreed and 2% respondents are strongly disagreed that they prefer branded clothes due to comfort.
50% respondents are strongly agreed, 36% respondents are agreed, 10% respondents are disagreed and 4% respondents are strongly disagreed that they prefer branded clothes due to durability. So majority of people prefer branded clothes due to comfort.
Which of the following element is important for your choice of the branded item?
Elements Frequency %age
Product features 31 62%
Price 14 28%
Promotion 04 08%
Placement 01 02%
Total 50 100_
This graph shows that 62% respondents preferred product features, 28% respondents preferred price, 8%respondents preferred promotion and 2% preferred placement for the choice of branded items.
So our analysis shows that product feature is the most important element for the choice of branded items.
Approximately, how many times do you buy your clothes?
Buying Period Frequency %age
Once a week 02 04%
Once every 2 weeks 00 00%
Once a month 08 16%
At the beginning of season 10 20%
During the sales period 00 00%
During the Christmas Festivities 00 00%
As the need arise 15 30%
Occasionally 13 26%
Rarely 02 04%
Others 0 00%
Total 50 100%
This graph shows that 30% respondents are used to buy clothes as the need arises.
So majority of people go to buy clothes as the need arises.
From where do you usually buy clothes?
By the use of Frequency %age
Catalogues 05 10%
Magazines 07 14%
Internet 03 06%
Open Market 35 70%__
Total 50 100%_
Above graph shows that 70% of respondents prefer to buy from open market. 6% respondents through internet, 14% respondents use magazine and 10% respondents use catalogues to buy clothes.
So majority of people go to buy clothes from open market.
How influential is advertising in your purchase of branded wears?
Advertising Frequency %age
Very Influential 09 18%
Influential 22 44%
Slightly Influential 10 20%
Not Influential 07 14%
Don’t Know 02 04%_
Total 50 100__
Above graph shows that 18% of respondents are much influenced, 44% are influenced, 20% are slightly influenced, 14% are not influenced by advertising to purchase branded clothes while 4% of respondents do not know about it.
So our analysis shows that majority of people are influenced by advertising to purchase branded clothes.
If a company wants to advertise to you, which of the following medium would be most effective in gaining consumers?
Medium Frequency %age
TV 24 48%
Radio 00 00%
Magazines 10 20%
Newspaper 01 02%
Billboards 11 22%
Internet 03 06%
Others 01 02%
Total 50 100%
48% respondents told that T.V is the most effective advertising media. So our analysis shows that majority of people are influenced by advertising through T.V.
How influential is a celebrity endorsement in your decision to purchase branded clothes?
Celebrity Frequency %age
Very Influential 05 10
Influential 15 30
Slightly Influential 13 26
Not Influential 12 24
Don’t Know 05 10
Total 50 100
30% respondents told that they are influenced by a celebrity to make their decisions to purchase branded clothes. So our analysis shows that branded clothes should be advertised through a celebrity.
How influential are other consumer’s opinions of a brand in your perception of that brand?
Other Consumer’s Opinion Frequency %age
Very Influential 14 28
Influential 19 38
Slightly Influential 12 24
Not Influential 02 4
Don’t Know 03 6
Total 50 100
This graph shows that 38% respondents are influenced by other people’s opinion. So company should achieve more and more market reputation.
When buying clothes, you:
Buying clothes Frequency %age
Go directly in a particular shop 31 62
Go round in various shops 19 38
Total 50 100.00
62% respondents go directly to purchase branded clothes in a particular shop while 38% respondents go round in various shops. So a company should have more physical outlets to capture market.
How would you rate the following statements?
I wear only well known brands
I buy clothes depending on their colors
I buy styles that suit me rather than what is fashionable
I only buy the style that my friends wear
I only buy the latest fashion as long as they suit me
I create my own fashion rather than follow it
I tend to stick to classic styles that won’t date
I wear only clothes that are widely available
I hate going round for clothes and I let others buy my clothes
I search for sales and low prices
30 respondents out of 50 are agreed that they wear only well known branded clothes,
31 respondents are agreed that they buy clothes depending on their colors,
31 respondents are agreed that they buy styles that suit them rather than what is fashionable.
23 respondents are disagreed that they only buy the style that their friends wear.
20 respondents are agreed that they only buy the latest fashion as long as they suit them.
27 respondents are agreed that they create their own fashion rather than follow it.
26 respondents are agreed that they tend to stick to classic styles that won’t date.
23 respondents are disagreed that they wear only clothes that are widely available.
25 respondents are agreed that they hate going round for clothes and they let others buy their clothes.
18 respondents are strongly agreed that they search for sales and low prices.
How important would you rate the following factors in influencing the choice of clothes purchased?
Majority of people are influenced by fashion magazines, T.V, news paper, billboards, promotional leaflets and internet while they are not influenced by beauty magazines, radio and cinema to make the choice of branded clothes.
So a company should focus to advertise through T.V and billboards.
Do you think that wearing branded clothes would reflect?
Disagree Strongly Disagree
32 respondents are strongly agreed that wearing branded clothes show level of confidence, 29 respondents are agreed that wearing branded clothes reflect superior image.
32 respondents are agreed that branded clothes reflect exclusivity and 28 respondents told that it’s a snob appeal.
So our analysis shows that majority of people purchase branded clothes due to high level of confidence, superior image, exclusivity and snob appeal.
Criteria used for the selection of specific brand?
Selection Criteria Frequency %age
Well known brand name 24 48%
Brand shows the quality 18 36%
Brand offers incentives 08 16%
Total 50 100%
The graph and its analysis show that criteria used for selection of specific brand is well known brand name.
Which brand is preferred by customer?
Preferred Brand Frequency %age
Offer more services 10 20%
High price with high quality 26 52%
Low price with high quality 14 28%_
Total 50 100%
52% respondents told that only that brand is preferred which provides high quality with high price. So a company should mainly focus on high quality.
What attracts you more to select a specific brand?
Attraction Frequency %age
More advertisement 06 12
Market reputation 11 22
Existing customer’s satisfaction 33 66
Total 50 100
66% respondents told that existing customer’s satisfaction attracts more to select a specific brand. So majority of people are influenced by existing customer’s opinion.
Why most people prefer local brand?
Attraction Frequency %age
Less price 26 52
Easy availability 6 12
Same features like imported brand 18 36
Total 50 100
This graph shows that most of the people prefer branded clothes due to less price.
Local brand captures market due to
Attraction Frequency %age
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