Is Customer Loyalty And Brand Preference Relationship Marketing Essay

2735 words (11 pages) Essay

1st Jan 1970 Marketing Reference this

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Brand is a term which distinguishes the product of a company from those of others. the word brand is developed from the old norse word brandr, which indicates “to burn.”According to the American marketing association (AMA), a brand indicates a home, term, sign, symbol or design or a blend of them, which tries to classify one particular companies goods or services and to make a distinction of some goods or services from other companies. Basically, when a company or organization creates a new name or logo for a new goods or services, a brand has been created or formed. (Kevin Keller, 2006)

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On the other hand, brand is a registered trade mark registered with a regulatory authority so the other parties or organizations are not allowed to use that particular name or logo. In the case of most organizations it is one their significant part of marketing. It is a reflection of a product of service in the market place. Many differentiate the physiological feature of a brand from the brand feature of a brand from the experiential. (http//www.inkestorwords.com/568/brat)

Research object:

Topic: Is customer loyalty and brand preference relationship the main reason for the success of a company? A case study of private label and proprietary brand at Tesco.

Due to globalization, any multinational company can start or operate or extend their business to any country of the world. The world is now considered as a single market. Local people of any country get introduced to different types of renowned brands of the word. As a result the importance of brand plays a very significant role for the company and it has been proven that customer is use to pay simple price premium for a renowned brand and they become a loyal customer of that particular brand. A place has been created for that particular brand in a customer mind.

Customer loyalty refers that a customer purchase a product repeatedly or customer continuously use the product.

In other sense, when customer ha s a high relative behaviour or attitude towards a particular product and this make the customer to buy the product again and again, there contains a customer loyalty. For a company, these types of customer are really kind of assets and they don’t mind to pay extra amount of money. Also these customers always influence new customers to buy the product or service. (http//en.wikipedia.org/wiki/brand loyalty)

Basically my research will be based on Tesco; I have to consider many important factor of Tesco. Tesco is offering a variety of private label and proprietary brand to the customer and it become no. one Retailer in the UK. My objective is to find out how a company can gain more customers by offering variety of brand and makes them as a loyal customer. In Bangladesh, we have only three or four retailers which is offering a variety of product and gaining popularity day by day, though they are offering a few segment of product. After finishing my degree, I have a plan to work in this field that is why I have an interest in this sector. The reason behind choosing that topic is to find out how they operate their business towards success and what the factors affecting customer to become loyal.

Literature review:

Brand:

Branding is one o the important stage of market segmentation and product differentiation strategy. Companies always try to provide better customer service or try to fulfil their needs and wants regarding a product. Brand has a great impact in creating competitive advantage through product performance. To create a renowned brand it takes a long time. There are two ways for this. One is from product advantage to intangible value and the other one is from value to product. In long run, this two way movements turn into the core of brand management. For example some famous brands such as Gillette, Sony and some other brand, they become leader in their fields for a long time just because of product improvement and adding and new feature. (Jean-Noel Kapferer, 2005)

Importance of a brand:

In case of conducting business brand is very powerful element. It should have a specific logo for making the brand easier and easy to identify for the customer. The brand value emphasis the quality of a product even to the new customer who has consumed it. If a customer start liking the product he or she must repeatedly by the product or service. Brand explains the reason why customer buys it and save the time of a consumer to choose. Due to brand value, when a marketer launches a new product it commences with trust and credibility so, customer loyalty is the reason of proper branding.(http://www.marketingdeviant.com)

Customer based brand equity:

Two questions are very important regarding brand. 1. which factor makes a brand more strong and how can we make a brand strong? This answer can be found by analysing customer based brand equity model. From the perception of consumer, it can be found that brand equity comes within the reach of CBBE model. Whether it can be an individual or an organization. To become successful, the markers have to analyse about the customer. practically marketers are facing two basic question. No.1, what do customer mean by different brand and 2. How consumers brand knowledge affect their response to a particular product. According to the CBBE model, the strength of a brand consists of customer perception, feelings and the result of their experience regarding a producing over time. The main challenge of marketing to build a brand strong is to make sure that the customer have the right experience while he or she consuming the product. So, we can say that customer based brand equity can be define as the various effect that the brand knowledge has on customs reaction towards the marketing of the brand. When customers react towards a product or service more positively we can say that it has positive customer based brand equity. If a brand has positive customer based brand equity, customer always welcome new brand extension. They don’t bother about the price that means they are not price sensitive at that time. Moreover, they are more willing to hunt for the brand in a new distribution channel. On the other hand a brand with negative consumer based brand equity; customers show their less interest to marketing activity towards the brand.

There contains three key points in this definition(a) differential effect (b)brand knowledge (c)consumer response to marketing. So firstly brand equity comes through variation in consumer response. If there no difference happens then the brand can be termed as commodity or generic version of the product. In that case, competition will be based on price only. Second, the differences regarding customer response while they use the product are consumer knowledge about the brand. Third, consumer different time response which makes up the brand equity is focused in perception, preference and attitude related to all areas of marketing of a brand. (Kevin Keller, 2006)

Brand equity as a bridge:

Consumer knowledge drives the differences that manifest themselves in terms of brand equity. In a border sense, according to this view through brand equity marketers get a vital strategic bridge from their past to their future.

Brand as a reflection of the past:

The money which is spend every year for marketing and manufacturing a product should not be consider as an expense but an investment. Investment in the sense of what consumer learned, felt and experience. If it is not designed and implemented properly, it may not be a good investment. That is why in building the brand, the quality of investment is very vital factor.

Brand as a direction of future:

At the same time, the marketers who created brand knowledge over time is the direction of appropriate or inappropriate future direction for the brand. On the basis of beliefs, attitude and felling consumers will decide about the brand should go and grant permission to any marketing action and program. (Jean-Noel Kapferer, 2005)

Customer loyalty:

Customer loyalty is defined as the behaviour of customer who repurchases the same product. Once a customer gets whatever he or she wants from particular product, he or she response positively towards that product or a brand. It also indicates a process or a function or group of programs whose main aim to keep a client or customer happy and make him satisfied. In some cases, customer loyalty can be gained by offering a quality product with some extra feature in it. By offering different types of promotion like free offer, coupons extended warranties customer loyalty can be achieved. The main focus of a customer loyalty program is to make sure that the customer has been satisfied after consuming the product and as a result, he or she will come back to buy the product or service. It also indicates a process or a function or group of programs whose main aim to keep a client or customer happy and make him satisfied. In some cases, customer loyalty can be gained by offering a quality of product with some extra feature in it. By offering different types of promotion like free offer, coupons, extended warranties customer loyalty can be achieved. The important feature of customer loyalty is the existing customer convence the new consumers to buy the product or service. Customer loyalty is an ongoing group of programme that attract customers. Offering a risk free trial period for a product or service is one of the good way to gain loyal customer. Brand name loyalty is an important term which indicates that customers not only buy the same product repeatedly but also experience the other product or services offered by some company. Another key element of gaining loyal customer is to provide superior customer service or create a place in customer s mind regarding the service. In this case, it may includes replace the product or in some cases the company should give the customer money back. This makes the customer think positively to the brand and the company as well. This is a standard procedure of a renowned business. Different people think that differently regarding customer loyalty. (http://www.wikipedia.com)

According to the Jim novo, customer loyalty is the tendency of consumers to choose the product over another for a specific need. Customer loyalty is ultimately the finishing of well managed customer relation programs focus on communication with the customer, motivate them to be active and inspire them to the custom with the company. To increase the customers loyalty relationship marketing or permission marketing or crm, etc these types of programs are really effective. (Jim novo, 2002)

As I am going to conduct the research based on Tesco regarding brand preference and customer loyalty, my objective is to find out the way they provide customer service and make them as a loyal customer. Tesco is offering both private label and proprietary brand to their customer.

Tesco is a British based international grocery and general merchandising retail chain. In terms of market share and global sale it has become the largest British retailer, whose profit is more than three billion. So based on revenue, it is the third largest retailer across the world, just behind the wall mart and Carrefour. Tesco is specialized in selling food and drink but now it has diversified into different areas such as, clothing, consumer electronics, financial services, health and car insurance internal service etc. Tesco’s UK stores are categorized into six divisions according to their size and range of product these are Tesco extra, Tesco superstores, Tesco metro, Tesco express, Tesco one stop and Tesco home plus.(http:en.wikipedia.org)

Tesco use to sell a variety of brand. They categorised their all product in three types: Tesco value, Tesco finest, Tesco organic. So, customer can get a variety of product of different brands at a single place.

Research methodology:

Research methodology is the way how the information will be gathered. This can be made by conducting interview, survey of literature review etc. And then it should be explained each method whet are they and what should be done in each method. It is an organized investigation regarding a topic to identify or discover facts, theories application etc. Research methodology is followed by particular discipline. In a word, it indicates the way to conduct the research. Research can be of two types qualitative and quantitative.

(Herbert J.Rubin, Irene S.Rubin, 2002)

`Qualitative approach:

Qualitative approach is more effective in compared to quantitative approach. It emphasis on analysing and reflecting on intangible features of research subject. Such as values attitude, emotions and feelings. In this research I have selected qualitative approach because brand and customer loyalty regarding Tesco is all about customers belief, value and own judgement. Qualitative approach examines the data which is not related to quantitative approach as I will try to focus on value, belief, attitude or perception of a customer. I will collect the data through the following ways.

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Secondary data:

We can be benefited by using secondary data in two ways it is the time saving and cost saving as well. Secondary data is the main source of focusing the key subjective of the research and deliver background to existing practice and thus build a connection between theory and practice. In my dissertation I will use the secondary data for literature review and analysis of the relationship between brand preference and customer loyalty. On the other hand, I will use some articles and journals conducted by many researchers regarding brand equity and customer loyalty program to make analysis and try to link up with the factor. I will also use some relevant books, related fields of journal and data from some institution to make it more authentic.

Primary data:

Primary data are those which is being gathered or collected by the researcher for a particular reason. It may be collected by observation while research is conducted or by interviewing.

I will collect the primary data through interview and questionnaire.

Interview:

It can be taken by individual or by a group. I will take the people shopping at Tesco. I think through interview I will get the response directly from the customer.

Questionnaires:

It is the most popular way to collecting information. It should be open ended and close ened both. The benefit of questionnaire is I can collect the data by asking all or a sample of people.

Main sample:

Sampling is the small part of population in this dissertation topic; my sample will be customers of Tesco, employees and managers of Tesco. (http://www.brent.tvu.ac.uk.)

Data analysis and interpretation:

Data analysis is the process of data shorting, summarising interpreting and comprising the data to find out the actual result. I will conduct data analysis by the following way:

Data sorting

Data Summarising

Data Interpreting

Data comprising

During the final stage of my report at this stage, after interpreting all the data I will write down the findings.

Time Scale:

As I will get approximately three months, I will proceed through a time frame, which is given below daftly:

Week

ACTIVITIES

First & Second

Third & Fourth

Fifth & Sixth

Seventh & Eighth

Ninth & Tenths

Eleventh & twelfth

Conclusion:

In marketing strategy, brands play a very important role. Its main goal is to deliver the right message to the customer, ensure the credibility, influence the buyer and obviously create loyal customer. Sometimes customers become blind towards a brand, they have a very positive response to a new product under the same brand. So, to become a successful marketer it is very important to create a brand image. In case of Tesco, it is going to become an international brand due to variety of brand under different category and superior customer service.

Brand is a term which distinguishes the product of a company from those of others. the word brand is developed from the old norse word brandr, which indicates “to burn.”According to the American marketing association (AMA), a brand indicates a home, term, sign, symbol or design or a blend of them, which tries to classify one particular companies goods or services and to make a distinction of some goods or services from other companies. Basically, when a company or organization creates a new name or logo for a new goods or services, a brand has been created or formed. (Kevin Keller, 2006)

On the other hand, brand is a registered trade mark registered with a regulatory authority so the other parties or organizations are not allowed to use that particular name or logo. In the case of most organizations it is one their significant part of marketing. It is a reflection of a product of service in the market place. Many differentiate the physiological feature of a brand from the brand feature of a brand from the experiential. (http//www.inkestorwords.com/568/brat)

Research object:

Topic: Is customer loyalty and brand preference relationship the main reason for the success of a company? A case study of private label and proprietary brand at Tesco.

Due to globalization, any multinational company can start or operate or extend their business to any country of the world. The world is now considered as a single market. Local people of any country get introduced to different types of renowned brands of the word. As a result the importance of brand plays a very significant role for the company and it has been proven that customer is use to pay simple price premium for a renowned brand and they become a loyal customer of that particular brand. A place has been created for that particular brand in a customer mind.

Customer loyalty refers that a customer purchase a product repeatedly or customer continuously use the product.

In other sense, when customer ha s a high relative behaviour or attitude towards a particular product and this make the customer to buy the product again and again, there contains a customer loyalty. For a company, these types of customer are really kind of assets and they don’t mind to pay extra amount of money. Also these customers always influence new customers to buy the product or service. (http//en.wikipedia.org/wiki/brand loyalty)

Basically my research will be based on Tesco; I have to consider many important factor of Tesco. Tesco is offering a variety of private label and proprietary brand to the customer and it become no. one Retailer in the UK. My objective is to find out how a company can gain more customers by offering variety of brand and makes them as a loyal customer. In Bangladesh, we have only three or four retailers which is offering a variety of product and gaining popularity day by day, though they are offering a few segment of product. After finishing my degree, I have a plan to work in this field that is why I have an interest in this sector. The reason behind choosing that topic is to find out how they operate their business towards success and what the factors affecting customer to become loyal.

Literature review:

Brand:

Branding is one o the important stage of market segmentation and product differentiation strategy. Companies always try to provide better customer service or try to fulfil their needs and wants regarding a product. Brand has a great impact in creating competitive advantage through product performance. To create a renowned brand it takes a long time. There are two ways for this. One is from product advantage to intangible value and the other one is from value to product. In long run, this two way movements turn into the core of brand management. For example some famous brands such as Gillette, Sony and some other brand, they become leader in their fields for a long time just because of product improvement and adding and new feature. (Jean-Noel Kapferer, 2005)

Importance of a brand:

In case of conducting business brand is very powerful element. It should have a specific logo for making the brand easier and easy to identify for the customer. The brand value emphasis the quality of a product even to the new customer who has consumed it. If a customer start liking the product he or she must repeatedly by the product or service. Brand explains the reason why customer buys it and save the time of a consumer to choose. Due to brand value, when a marketer launches a new product it commences with trust and credibility so, customer loyalty is the reason of proper branding.(http://www.marketingdeviant.com)

Customer based brand equity:

Two questions are very important regarding brand. 1. which factor makes a brand more strong and how can we make a brand strong? This answer can be found by analysing customer based brand equity model. From the perception of consumer, it can be found that brand equity comes within the reach of CBBE model. Whether it can be an individual or an organization. To become successful, the markers have to analyse about the customer. practically marketers are facing two basic question. No.1, what do customer mean by different brand and 2. How consumers brand knowledge affect their response to a particular product. According to the CBBE model, the strength of a brand consists of customer perception, feelings and the result of their experience regarding a producing over time. The main challenge of marketing to build a brand strong is to make sure that the customer have the right experience while he or she consuming the product. So, we can say that customer based brand equity can be define as the various effect that the brand knowledge has on customs reaction towards the marketing of the brand. When customers react towards a product or service more positively we can say that it has positive customer based brand equity. If a brand has positive customer based brand equity, customer always welcome new brand extension. They don’t bother about the price that means they are not price sensitive at that time. Moreover, they are more willing to hunt for the brand in a new distribution channel. On the other hand a brand with negative consumer based brand equity; customers show their less interest to marketing activity towards the brand.

There contains three key points in this definition(a) differential effect (b)brand knowledge (c)consumer response to marketing. So firstly brand equity comes through variation in consumer response. If there no difference happens then the brand can be termed as commodity or generic version of the product. In that case, competition will be based on price only. Second, the differences regarding customer response while they use the product are consumer knowledge about the brand. Third, consumer different time response which makes up the brand equity is focused in perception, preference and attitude related to all areas of marketing of a brand. (Kevin Keller, 2006)

Brand equity as a bridge:

Consumer knowledge drives the differences that manifest themselves in terms of brand equity. In a border sense, according to this view through brand equity marketers get a vital strategic bridge from their past to their future.

Brand as a reflection of the past:

The money which is spend every year for marketing and manufacturing a product should not be consider as an expense but an investment. Investment in the sense of what consumer learned, felt and experience. If it is not designed and implemented properly, it may not be a good investment. That is why in building the brand, the quality of investment is very vital factor.

Brand as a direction of future:

At the same time, the marketers who created brand knowledge over time is the direction of appropriate or inappropriate future direction for the brand. On the basis of beliefs, attitude and felling consumers will decide about the brand should go and grant permission to any marketing action and program. (Jean-Noel Kapferer, 2005)

Customer loyalty:

Customer loyalty is defined as the behaviour of customer who repurchases the same product. Once a customer gets whatever he or she wants from particular product, he or she response positively towards that product or a brand. It also indicates a process or a function or group of programs whose main aim to keep a client or customer happy and make him satisfied. In some cases, customer loyalty can be gained by offering a quality product with some extra feature in it. By offering different types of promotion like free offer, coupons extended warranties customer loyalty can be achieved. The main focus of a customer loyalty program is to make sure that the customer has been satisfied after consuming the product and as a result, he or she will come back to buy the product or service. It also indicates a process or a function or group of programs whose main aim to keep a client or customer happy and make him satisfied. In some cases, customer loyalty can be gained by offering a quality of product with some extra feature in it. By offering different types of promotion like free offer, coupons, extended warranties customer loyalty can be achieved. The important feature of customer loyalty is the existing customer convence the new consumers to buy the product or service. Customer loyalty is an ongoing group of programme that attract customers. Offering a risk free trial period for a product or service is one of the good way to gain loyal customer. Brand name loyalty is an important term which indicates that customers not only buy the same product repeatedly but also experience the other product or services offered by some company. Another key element of gaining loyal customer is to provide superior customer service or create a place in customer s mind regarding the service. In this case, it may includes replace the product or in some cases the company should give the customer money back. This makes the customer think positively to the brand and the company as well. This is a standard procedure of a renowned business. Different people think that differently regarding customer loyalty. (http://www.wikipedia.com)

According to the Jim novo, customer loyalty is the tendency of consumers to choose the product over another for a specific need. Customer loyalty is ultimately the finishing of well managed customer relation programs focus on communication with the customer, motivate them to be active and inspire them to the custom with the company. To increase the customers loyalty relationship marketing or permission marketing or crm, etc these types of programs are really effective. (Jim novo, 2002)

As I am going to conduct the research based on Tesco regarding brand preference and customer loyalty, my objective is to find out the way they provide customer service and make them as a loyal customer. Tesco is offering both private label and proprietary brand to their customer.

Tesco is a British based international grocery and general merchandising retail chain. In terms of market share and global sale it has become the largest British retailer, whose profit is more than three billion. So based on revenue, it is the third largest retailer across the world, just behind the wall mart and Carrefour. Tesco is specialized in selling food and drink but now it has diversified into different areas such as, clothing, consumer electronics, financial services, health and car insurance internal service etc. Tesco’s UK stores are categorized into six divisions according to their size and range of product these are Tesco extra, Tesco superstores, Tesco metro, Tesco express, Tesco one stop and Tesco home plus.(http:en.wikipedia.org)

Tesco use to sell a variety of brand. They categorised their all product in three types: Tesco value, Tesco finest, Tesco organic. So, customer can get a variety of product of different brands at a single place.

Research methodology:

Research methodology is the way how the information will be gathered. This can be made by conducting interview, survey of literature review etc. And then it should be explained each method whet are they and what should be done in each method. It is an organized investigation regarding a topic to identify or discover facts, theories application etc. Research methodology is followed by particular discipline. In a word, it indicates the way to conduct the research. Research can be of two types qualitative and quantitative.

(Herbert J.Rubin, Irene S.Rubin, 2002)

`Qualitative approach:

Qualitative approach is more effective in compared to quantitative approach. It emphasis on analysing and reflecting on intangible features of research subject. Such as values attitude, emotions and feelings. In this research I have selected qualitative approach because brand and customer loyalty regarding Tesco is all about customers belief, value and own judgement. Qualitative approach examines the data which is not related to quantitative approach as I will try to focus on value, belief, attitude or perception of a customer. I will collect the data through the following ways.

Secondary data:

We can be benefited by using secondary data in two ways it is the time saving and cost saving as well. Secondary data is the main source of focusing the key subjective of the research and deliver background to existing practice and thus build a connection between theory and practice. In my dissertation I will use the secondary data for literature review and analysis of the relationship between brand preference and customer loyalty. On the other hand, I will use some articles and journals conducted by many researchers regarding brand equity and customer loyalty program to make analysis and try to link up with the factor. I will also use some relevant books, related fields of journal and data from some institution to make it more authentic.

Primary data:

Primary data are those which is being gathered or collected by the researcher for a particular reason. It may be collected by observation while research is conducted or by interviewing.

I will collect the primary data through interview and questionnaire.

Interview:

It can be taken by individual or by a group. I will take the people shopping at Tesco. I think through interview I will get the response directly from the customer.

Questionnaires:

It is the most popular way to collecting information. It should be open ended and close ened both. The benefit of questionnaire is I can collect the data by asking all or a sample of people.

Main sample:

Sampling is the small part of population in this dissertation topic; my sample will be customers of Tesco, employees and managers of Tesco. (http://www.brent.tvu.ac.uk.)

Data analysis and interpretation:

Data analysis is the process of data shorting, summarising interpreting and comprising the data to find out the actual result. I will conduct data analysis by the following way:

Data sorting

Data Summarising

Data Interpreting

Data comprising

During the final stage of my report at this stage, after interpreting all the data I will write down the findings.

Time Scale:

As I will get approximately three months, I will proceed through a time frame, which is given below daftly:

Week

ACTIVITIES

First & Second

Third & Fourth

Fifth & Sixth

Seventh & Eighth

Ninth & Tenths

Eleventh & twelfth

Conclusion:

In marketing strategy, brands play a very important role. Its main goal is to deliver the right message to the customer, ensure the credibility, influence the buyer and obviously create loyal customer. Sometimes customers become blind towards a brand, they have a very positive response to a new product under the same brand. So, to become a successful marketer it is very important to create a brand image. In case of Tesco, it is going to become an international brand due to variety of brand under different category and superior customer service.

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