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Brand Loyalty in Consumer Goods Market

1493 words (6 pages) Essay in Marketing

5/12/16 Marketing Reference this

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Customer loyalty is a significant issue strategic marketing management. According to Uncles (1998), organizations should strive for developing customer loyalty as it would result in a situation customers do not look for other products and stay with the organization. Similarly, Solomon (1992) highlighted a loyalty customer does not take much of organizations’ time and thus make the sale transaction relatively simple. It would save lot of selling and administration expenses of organization as loyal customer base does not require organization to spent lot of money on promoting its products. Further to this. Dekimpe (1997) suggested organizations can capitalize on their brand loyalty by launching new brands. As a matter of fact, if the organization launches new brand, the loyal customers do not investigate much about and can get easily attracted towards it. He further regard customer as important asset for the organization and loyal customers help organizations in develop brand equity. Earlier, Demsetz (1982) that brand loyalty creates entry barriers for new entrants.

The development of brand loyalty is key ingredient of developing and generating brand value (Crimmins, 2000). The brand loyalty programs are aimed at developing among the segments to which organizations sell their products and services (Dyson, 1996). From Mellens (1996), the concept is an attitude or behavior of customer towards organizations’ products and services. Further to this, Javalgi (1997) suggested that the brand loyalty is a complex construct and a lot of disagreement occurs on the methods. Most of the time people adopt definition proposed by (Jacoby, 1978a). The debate on measuring the brand loyalty is not new yet it is still alive. The prominent researchers who participated in this debate include (Dyson, 1996, Baldinger, 1997, Farr, 1997, Jacoby, 1973, Tarpey, 1975) According to Rundle-Thiele and Bennett (2001), the measurement of brand loyalty is very difficult as it influenced by number of factors include product characteristics, market conditions and extent of competition. However, the idea proposed by Jacoby (1978a) regard brand loyalty as a biased behavior or attitude which is shown in a customer over a period of time and results in situations where a person selects one particular brand and leave other brands which are substitute of the former brand. He, further, suggested that brand loyalty is psychological phenomenon and is changed with the change in a person’s mentality.

3.0: Review of Brand Loyalty in Consumer Goods Market:

It is envisaged that brand loyalty patters differ among different categories of products and services including consumable, durable and service markets. The difference in product attributes is because of the issues associated with market charcteristics, brand switch behaviors of the customers, frequency with which customers buy products or services, how the brand equity is actually measure, etc.

The marketing literature is rich with literature on consumer goods. Generally, a consumer goods is a product which is very frequently purchased. It is also regarded or termed as “Fast Moving Consumer Good” (FMCG). Some of the examples of these FMCGs include soft drink, washing powder, ice-cream, chocolate, biscuit, office stationery, etc.. There are lot of studies which analysed the brand loyalty in the context of goods (Cunningham, 1956, Jacoby, 1978b, Tranberg, 1986, Newman and Werbel, 1973). Generally, the research in the area of brand loyalty of FMCGs focuses on the behavior of customer or consumer towards a product and the extent to which a customer continue using a particular brand (Ehrenberg, 1988, Sachs, 1992, East, 1996). However, in FMCG market, the customer loyalty is divided which makes an important point to research the issue. According to Currim (1991) and East (1996), in an attempt to use variety of products and service, the customer may switch to a new brand. Similarly, Blattberg (1989), East (1996) and Chandon (1995) highlighted brand switching pattern among customers which is the result of a promotional program offered by a rival brand. East (1996) and Chandon (1995) also highlighted that if at any particular situation, a particular brand is not available, the customer may switch to alternative brand. There are also certain situations when purchaser is not the decision maker and he seeks his convenience in purchase process and which result in switching of brand (Sheth, 1968, Kotler, 2000).

4.0: Background and Importance of Research:

For decades now building brand loyalty has been bring forward as the universal remedy for all organizations to struggle the growing rivalry in the market place. Various studies have been conceded out to comprehend what constitutes loyalty towards a brand. In the early hours researchers focused on repurchase behaviour as a measure of loyalty towards a brand. Another determinant is customer satisfaction as the link between customer satisfaction and customer loyalty has also been established (Homburg, 2001). Completely satisfied customers are strongly loyal customers (Roos, 1999). This approach, which could be, applied to FMCG products would require companies to research several aspects of customer satisfaction and brand loyalty. This approach combines several aspects of loyalty, customer satisfaction, inertia loyalty and switching behaviour of consumers. According to (Kumar, 2009), repeat purchase based on reasons other than commitment to a brand is inertia loyalty. Therefore any research on loyalty should take inertia loyalty into consideration. While loyalty, satisfaction and Customer Relationship Management (CRM) are related concepts, recent literature throws up several interesting findings, which may be of importance to consumers. These determinants will be under consideration as the area of the research is the “Analysis of brand loyalty in FMCGs”. A consumable goods market includes fast-moving consumer goods such as toothpaste, detergents, cereal, ice-cream and business to business markets where goods are consumed, such as office stationery. Numerous studies have been conducted to examine determinants of loyalty in goods (Cunningham, 1956, Jacoby, 1978a, Tranberg, 1986) and the most effective ways of building loyalty for goods. Brand loyalty research in consumable markets has typically focused on behavioural measures of loyalty such as share of category requirements (commonly referred to as proportion of purchase measures) and allegiance, or length of time spent with the brand.

5.0: Research Aim:

The main aim of this dissertation is to analyze the Brand Loyalty pattern of Consumers in FMCG industry of Pakistan.

6.0: Research Questions:

The achievement of above stated aim require answering of a number of research questions. These research questions are mentioned as below:

What are the important factors in purchasing the FMCGs?

Is their any relationship between repeat purchase and brand loyalty in FMCGs?

What are the important factors that influence the customers to repurcharse FMCGs?

7.0: Research Objectives:

The assocaited reseach objectives are as follows.

To analyze the important factors in purchasing the FMCGs.

To analyze the relationship between repeat purchase and brand loyalty in FMCGs.

To analyze the important factors that influence the customers to repurcharse FMCGs.

8.0: Proposed Research Methodology:

8.1: Research Type:

The disseration will use the reseach typology described by Cooper and Schindler (2006). They gave various crtieria on which a reseach issue can be categorized. Using those critieria, this reseach can be regarded as a desciptive research as the issue in hand is quite clear. Moreover, the disseration candidate intends to collect data from the field setting and would also intend to ensure that the data should be collected from actual routines of the customers so this research will be a filed study. Moreover, it is intended that the required data will be collected though questionnaires so this research will be a communication research. Moreover, the data will be collected from the respondents after the incident had taken place so the reseach will be an expost fact. Similarly, the disseration candidat will select a sample of respondent from cross section and the data collected will be subject to statistical analysis so the disseration research will be communication and statistical research. The research will involve both qualitative and quantiative aspects.

8.2: Population Definition and Sampling Design:

The population of this disseration reseach will be a cross section of respondents who purchase FMCG items from various departmental stores. An important characteristics of the population and sample selection is that they will be requested to particapte at the time of making or after a transaction in which FMCG items would be actually purchased. A sample of 200 respondents will be taken. No reference will be made to gender. However, it is envisaged that most of the respondents will be household or more than 20 years of age. The data will be collected from Gujranwala, Lahore and Multan. These are three major cities of Punjan andreflect diverse poulation and demographic characteristics.

8.3: Data Collection and Analysis:

The disseration candidate will develop and adminster a strcutred questionnaire for this research.

8.4: Construct Validity and Reliability:

Construct validity and construct reliabilty are important dimensions of research. The disseration candidate intends to use Crobnach’s alpha (Cronbach, 1951) to analyze the relaibility of the scale which will be used for data collection. Similarly, as far as possible, the constructs and vaiables will be extracted from literature which will ensure consruct validity.

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