Theory Of Consumer Brand Relationship Marketing Essay

Marketing consists of transactional marketing and relationship marketing (Robert, 2008). Transactional marketing is a marketing strategy, which is often adopted by many businesses in the old days. It has a general approach. It focuses on single point of sale transactions. Fruchter and Simon (2005) mention that transactional marketing is the transactional benefit delivered to the buyer. It is one time sales-orientated without connection program with consumers and focus on product features. The purpose of transactional marketing is to boost sales volume for maximizing business sales effectiveness.

Market practices have been changing over time. In the recent decades, company has shifted its focus of marketing from transactional to relationship. Compare to transactional marketing, relationship marketing focuses more on developing interactive relationships with customers. Company that adopts relationship marketing recognizes the increasing importance of retaining its customers. Organizations, nowadays, not only focus on single transaction or implementing the traditional 4Ps marketing strategy, but also focus on developing strong relationship with consumers, which can create consumers’ loyalty. Today, relationship marketing has taken a central position in the marketing strategy. Many marketers believe that it is one of the key factors to succeed in nowadays-competitive market (Morgan & Hunt, 1994) since relationship marketing can lead to repurchase habit, create exit barriers, which can benefit to all parties (Andaleeb, 1996).

Unlike transactional marketing has a short-term goal; relationship marketing has a long-term goal (Robert, 2008). In general, relationship marketing is “attracting, maintaining, and enhancing customer relationships” (Berry, 1983). Gronroos (1990) defines relationship marketing as a strategy of developing long-term relationship with consumers and all related parties. And relationship marketing is to build, foster and enhance relationships with consumers and related parties. The purpose is to satisfy different parties from their involvement including profit. Organizations accomplish it through setting of mutual exchange and making fulfillment of their commitments. In addition, Harker (1999) mentions relationship marketing is a strategy that organizations create, develop, and maintain commitment constructively, using different interactive and profitable activities for targeted consumers. Therefore, relationship marketing is customer-orientated, focusing on consumers’ value and communication with them continuously for their retention.

According to Gronroos (1990), building relationship with consumers is crucial to a business’s success because it allows less investment to satisfy existing consumers repurchase to one brand when comparing to the cost of acquiring new customers. Building a long-term relationship with customers helps to create consumer retention. When a company successfully develops a good relationship with its customers by providing a product or service to customers that exceeds the customer’s expectation, the customer will become a loyal advocate for the company’s brand. Having more loyal customers can help a company to boost its profits as loyal customers are fewer prices sensitive. They are willing to pay high prices for a company’s product or services. Reichheld and Sasser (1990) mention organizations could force around 100% profit by retaining only 5% more of their existing consumers. Also, it is believed that loyal customers spread the good value of a brand to others, leading new customers to the business by positive word-of-mouth and help the company to expand.

Consumer-brand relationship is one of the significant types of relationship marketing. This paper will discuss the factors that can affect consumer-brand relationship, the process of building it and its benefits. At the end of the paper, a good and poor example of fast food industry in building consumer-brand relationship will be provided to elaborate the idea.

2. Theory of Consumer-Brand Relationship

Customers play the most important role in any organizations. A business’s “success is getting the right customers and keeping them” (Reichheld, 1996). Brand is like a tool for helping an organization to establish relationship with its consumers (Orth et al., 2004). The American Marketing Association points out that brand comprises name, design, style or symbols, or in combination. Brand is the most valuable asset of an organization. Many similar products, like shampoo or cigarette, which their functions have not a big different, the most differentiation is their brand. Thus, in order to be competitive in the business world, organizations ought to know how to build up their brand and maintain a good relationship between their brands and consumers.

2.1 Brand Equity

Brand equity is one of the key elements establishing a brand (Keller, 1998). It refers to the value of brand. Brand equity tells what one’s brand means to the customer and how a brand is different from the competitive brands. Scholars believe that high level of brand equity results in customers’ favor to the brand and repurchase of the brand’s products or services (Cobb-Walgren et al., 1995). Brand equity is constructed by three elements: brand awareness, brand association and perceived quality (Aaker, 1991; Pappu et al., 2005).

2.1.1 Brand Awareness

Brand awareness is a vital element of brand equity (Aaker, 1991; Keller, 1993). It is defined as the likelihood that customers recognize the existence of a brand. Brand awareness consists of two sub-categories: brand recall and brand recognition. Brand recall refers to the extent to which a brand name is recalled (Keller, 1993); while, brand recognition refers to customers’ competence for keeping the brand in mind easily from different (Aaker, 1991).

There are various approaches to increase customers’ brand awareness, such as offering promotion, discount, free sample and etc. Advertising is the most common way to increase customers’ brand awareness. A persuasive advertisement can increase brand awareness effectively (Percy & Rossiter, 1992). It can attract new customers and helps to expand the company’s customer base. Advertising can boost brand awareness through different media, including television, radio, internet, magazine, newspaper etc. A simple slogan or advertising jingle can familiarize the brand with customers as well. Besides advertising, having a good brand name also can increase brand awareness effectively. A good brand name makes a deep impression on customers’ mind; hence, selecting a brand name is vitally important. For example, using simple words (eg. P&G) or outstanding words for brand name (eg. Michelin) helps customers to remember a brand more easily.

The benefit of building brand awareness is that it helps to differentiate one’s product or service among its competitors (Pappu et al., 2005). High level of brand awareness also helps to gain loyal customers and leads to positive word of mouth. Eventually, resulting in larger customer base, increased sales, more profit and larger market shares.

2.1.2 Brand Association

Another key dimension of brand equity is brand association (Aaker, 1991; Keller, 1993). Brand association is defined as the likelihood that consumers connect anything with the brand in their memory (Aaker, 1991). It contains “the meaning of the brand for consumers” (Keller, 1993). Brand association represents all tangible and reflects the features of a brand’s products (Chen, 2001). There are various sources of brand association; brand personality is the most significant factor (Aaker, 1991).

Brand Personality

Aaker (1997) defines brand personality as “the set of human characteristics associated with a brand”. Customers view the brand’s features or characteristics as the brand personality (Aaker, 1991; Keller, 1993). Azevedo and Farhangmehr (2005) argue that matching personality with brand and customers is the key of relationship marketing. And an effective brand will increase its brand equity by having a consistent set of brand personality. To maximize the effectiveness of branding, the brand personality must be in alignment. Everything an organization does have to align with the intended brand personality attributes.

Customers through their past buying experience will affect them to have relative impression to the brand. Aaker (1991) believes that different meaningful purchase experience can be formed a brand personality. Brand personality can create value to organizations for brand differentiation, building positive word of mouth, creating and providing purchase needs, and expansion of customers’ base.

Brand personality may vary in different countries and cultures. In order to be successful, organizations need to consider the specific cultures when they develop brand personality to ensure conflict will not be occurred (Aaker, Benet-Martinez & Garolera, 2001).

2.1.3 Perceived Quality

Perceived quality is another main element of brand equity (Aaker, 1991). Zeithaml (1988) explains that perceived quality is not the factual quality of the product, it is about consumers how to view product quality subjectively. Groth (1995) suggests that perceived quality has a great impact on buying decisions.Based on the research of Heskett et al. (1997), perceived quality of the brand will affect customers buying decision and thereby building of perceived quality is crucial for organizations.

Perceived quality is a vital factor for customers to make buying decisions. Customers tend to buy a product or service that they think it has a high perceived quality and its benefit is greater than its cost. Organizations need to listen to their target market and understand what level of quality of product or service they should provide to fulfill customers’ expectations. For example, younger group favors modern mobile phone, whereas, aged group desires durable ones. Customers tend to judge product quality from various media that they connect with the product. Therefore, organization can create their brand perceived quality through advertisement which should be matched with customers’ expectation.

One of the elements of consumer satisfaction is caused by perceived quality (Anderson & Sullivan, 1993). Perceived quality provides clear brand value to customers and motivates customers buying the brand from various competitors (Pappu et al., 2005). It is believed that the higher perceived quality of a brand’s product or service, the more likelihood customers will purchase it.

Brand equity is defined as value of the brand. It is the initial stage for customers recognize the brand, associate with brand image and perceive brand quality. If all of the above is build up positively, the next stage is to create consumer-brand relationship.

2.2 Process of Building Consumer-Brand Relationship

Brand loyalty is the organizational ultimate aim. It needs a good relationship between consumers and brand to sustain it. To build up a good consumer-brand relationship may need a long period of time. Having customers’ assent toward the brand can intensify their self-identification with the brand that helps customers’ satisfaction. According to the study of Ballester and Aleman (2001), customers repeat purchase is caused by four dimensions: overall satisfaction, customer involvement, brand trust and customer commitment. The process of building consumer-brand relationship is elaborated in the context.

2.2.1 Brand Identification

Social identification refers to a person who is a member of one group that he takes on the group’s views (Ashforth & Mael, 1989). Apply to social identification concept in consumer-brand relationship, organization creates identity that can affect customers’ perception without any interaction (Bhattacharya and Sen, 2003). For example, Apple is a leading technology company in the world and its iPhone leads the trend. iPhone’s brand personality emphasizes on innovation and being stylish and classy. In fact, Brand identification reinforces personality identity. Because of iPhone brand identity, some individuals think it is stylish and classy to own an iPhone.

A brand is a valuable asset to every organization. Building this asset can acquire competitive advantage, including changing customers’ buying habit. Since identity is the basis of behavior, brand identity selection becomes the most significant to make buying decision (Akerlof & Kranton, 2000). Implement a brand recognition strategy can help business to succeed. When customers feel that brand is prestige, customers may link up themselves with that brand as they will have higher self-esteem (Campbell et al., 2004, Kuenzel et al., 2008). As a result, if customers want to have higher self-esteem, and the brand can make satisfy them, customers will tend to the brand.

2.2.2 Overall Satisfaction

Satisfaction is related to brand identification (Bhattacharya et al., 1995), without brand reputation, consumers who with satisfactory cannot become to loyal customers (Sandvik & Duhan, 1996; Selnes, 1993). From the study of Oliver (1980), satisfaction is defined as an essential to build up relationship which is customers respond to the brand positively after having purchase experience from it.

The higher brand satisfaction leads to higher involvement of customers (Ballester & Aleman, 2001). Today, more customers tend to anticipate involvement to brand activities. Through these activities, customers reflect their satisfaction with product/service of brand. For example, customers who are iPhone lovers search its information through different media or give a “like” in Facebook.

High customers’ overall satisfaction can generate trust and commitment towards the brand. (Ballester & Aleman, 2001). Therefore, the overall satisfaction becomes one of the major indicators of success to one’s brand.

2.2.3 Brand Trust

Ballester & Aleman (2001) proves that if consumers have higher satisfaction to one brand, they have higher trust to that brand. Brand trust as an expectation of customers who believe that they can receive specific quality with consistent, capable, truthful or accountable from the brand (Doney & Cannon, 1997), it leads to beyond customers’ satisfaction in terms of products’ performance and characteristic. Brand trust consists of two dimensions (Deighton, 1992): first is brand reliability which a brand has capability to response customers’ desires and commitment to future performance. The second is brand intention, it refers to take customers into account proactive action (Michell et al., 1998).

Brand trust evolves customers from former experience and previous communication with the brand (Garbarino & Johnhson, 1999). Thus, giving a good impression to customers is necessary in terms of improving quality, creating a strong brand name (both in internal and external), adopting a customer-oriented strategy and building distinctive brand identity. It can also draw customers higher involvement and more commitment to the brand.

Brand trust can be built through adverting or promotions. Adverting and promotions help to maintain a good impression, image and relationship with consumers (Ballester & Aleman, 2001). According to the theory of Morgan and Hunt (1994), trust is an important factor to develop and retain permanent relationship between customers and brand. When consumers have a trust to the brand, repurchasing behavior will be formed. It leads to commitment to the brand, and the relationship between brand and consumer can be built up. Ultimately, they will become loyal customers (Morgan and Hunt, 1994).

2.2.4 Customer Commitment

Morgan and Hunt (1994) believe that “successful relationship marketing requires relationship commitment and trust”. Consumers feel higher trust to one brand, they commit more to that brand (Ballester & Aleman, 2001). Trust is an entrance of triumphant relationships while commitment as a desire to maintain a valuable relationship. Customer commitment refers to customers intend to keep the relationship or purchase the same brand continuously, they pay more positive attention and involvement to the brand, and consequently more commitment of customers to the brand (Ballester & Aleman, 2001).

Customer commitment made a certain impact on brand trust and customer satisfaction, and influence on customers’ loyalty and boost consumer-brand relationship. If consumers have a high rating of commitment which refers to forceful feeling and favor to several brands, consumers assume these brands’ image is as same as their personality, value or lifestyle etc. In this stage, customers are willing to repurchase toward the products of these brands, brand personality can contribute development of trust and commitment. Higher commitment for a brand, higher price of the brand is acceptable by consumers (Ballester & Aleman, 2001). Customer commitment enhances a stable relationship and building customers loyalty to the brand.

2.2.5 Brand Loyalty

Brand Loyalty as emotional customers toward a brand (Aaker, 1991). Oliver (1997) defines brand loyalty as customers have a strong commitment to purchase to one brand continuously in the future, even various marketing promotions may affect customers switching behavior. It emphasizes two sides of concept: behavioral and attitudinal. Behavioral brand loyalty consists of purchase to one brand consistently, while attitudinal brand loyalty refers to level of characteristic commitment for the brand differentiation. If customers have high trust in the brand who link through brand loyalty of behavioral and attitudinal, the brand can get the larger market share and price tolerance (Chaudhuri & Holbrook, 2001).

From the research of Magin et al. (2003), it can be seen that customers have more loyalty towards the brand, if their buying experience with higher satisfaction. Listening, understanding and responding what customers say through modification of brand proposition and brand identity to fulfill their needs and wants. Once customers formed loyalty to a brand, customers will repeat purchase for that brand, a permanent consumer-brand relationship can be established, and the organization can gain enormous benefits from this solid customer relationship.

2.3 Benefits of Consumer-Brand Relationship

Brand loyalty is the aim of consumer-brand relationship, it generates benefits including word of mouth and repurchase intention.

2.3.1 Word of Mouth

In relationship marketing, loyal customers as an advertisers who can promote products or services to the brand. It shows their behavior with loyalty because customers recommend the brand when they have satisfied to their products or services (Bettencourt, 1997). When customers recognize a brand, they often tend to buy it. They will suggest the brand’s products to others and make positive recommendations about the brand. The outcomes of a successful relationship is that customers give positive word of mouth and recommendation about the brand, customer recruitment, brand loyalty and repurchase intention (Bhattacharya & Sen, 2003)

2.3.2 Repurchase Intention

Customers repurchase intention is critical in today’s business since customers have many information and choices in the market. In order to survive in the business world, retention strategy is required in relationship marketing to keep long term relationship with customers (Bhattacharya and Sen, 2003). According to the study of Kuenzel and Halliday (2008), when consumer-brand identification is intensified, successful relationship marketing can be formed by producing repurchase and word of mouth loyal behaviors. Whereas, Bhattacharya and Sen (2003) mention that the higher company identification, the more positive influence on buying behavior.

Repurchase intention is an indicator of brand and service loyalty (Bettencourt, 1997). Brand loyalty can be defined as the extent of customers’ faithfulness to a brand (Bhattacharya et al., 1995). Maintaining customers and minimizing defects resulting in greater profit of organization (Reichheld & Sasser, 1990).

3. Consumer-Brand Relationship in Fast Food Restaurant Industry

McDonald is a global well known brand in the fast food industry. McDonald is established in 1940. In 1963, a clown Ronald McDonald was introduced. The aim of that is to attract children. This is the beginning of McDonald to create brand loyalty. At the end of 2011, they had 33,510 restaurants in 119 countries and serviced 47 million customers daily in the world (McDonald Annual Report 2011). Their operations manual reflect that they have clear target customers – children, they think that children are important decision makers about where does a family go to eat. In order to promote their brand personality, McDonald’s advertisement emphasizes Ronald McDonald is a loving and friendly clown. Ronald McDonald is kids’ lover.

McDonald emphasizes social corporate responsibility, forming Ronald McDonald House Charities is one of the contributions. Its’ mission is to provide a safe and comfortable accommodations for children who need special healthcare, such as critical illness or suffer injury. McDonald holds various community activities such as raising fund for helping children in need. In Hong Kong, those activities include putting smiles on kids faces 2006, Stars shine in world children’s day at McDonald 2007 concert, McHappy Day at McDonald 2010 Officially concluded star-studded McHappy Day concert 2010 etc. McDonald also concretes on sustainability. McDonalds also concerns environment protection. It strives to balance environment interest in different aspects: serving customers, suppliers, supply chain and eco-friendly. Because of all the things McDonalds have done, it is perceived to be a child-loving and environmental friendly organization.

Besides, McDonald’s logo is streamline with sharp color can also make customers recall their brand easily. Various advertising campaigns, jingles and slogans of McDonald over the years, they are rooted in customers’ memory. The latest slogans “I’m lovin’ it” can connect with customers around the world. “Da-da-da-da-dah, I’m lovin’ it” is a catchy advertising jingle, it can keep customers’ mind deeply and quote customers close to them Different McDonald’s campaigns are cover in many countries. McDonald standardizes their brand name but “act local” on their advertisement. Through consistent on stars advertising campaigns, McDonald’s aim is to make their products’ perception to higher quality. Every meal customers buy, McDonald will donate specific amount to Ronald McDonald House Charities. In addition, they standardize their internal operations and production line technology. All these can ensure to lift customers’ perception on the brand.

Different brand personality dimensions in different countries for various cultural issues (Aaker et al., 2001). Elimination of culture barrier is one of McDonald’s key accomplishments. They work with franchisees around the world closely and allow them to make customization to address particular cultural needs. Cultural diversity can be reflected on their various menus in different countries. For example, to prevent religion restriction, McDonald customizes burgers with chicken, lamb and fish in Indian; Beer is served in most McDonald in Europe; rice hamburger is on Hong Kong’s menu. Stores’ size is ranging from small outlets in Tokyo to large restaurants in Moscow where are provided 700 seats. McDonalds can flexible in dealing with cultural differences.

The success of McDonalds is because customers have greater satisfaction from their buying experience with the standard products’ quality and services from McDonald. To guarantee efficiency of production, McDonalds applies optimum process of production and set an effective rules and regulations. They promote meal discount regularly. McDonald’s products are in big size and they provide the most effective way to get totally full from hunger. “As a culture, we tend to believe that bigger is better” (G. Ritzer, 2000). Customers feel that they can get more than they spend. McDonald also provides healthy food products (eg. salad) to respond customers’ expectation about healthy food. Ultimately, customers are satisfied since McDonald can fulfill their needs and wants.

McDonald’s mission is to provide a great place and experience for customers eating and drinking. They deliver a message to customer is not simply selling hamburgers, but having a joy and delicious time in McDonald. They provide 24-hour service, free Wi-Fi and create pleasant experience to customers lead to their involvement in McDonald’s activities. McDonald holds many community activities, number of participant and amount of donation are satisfactory. McDonald’s toys redemption activities popular with customers all the time and over 25,600,000 people to discuss in McDonald’s facebook account.

McDonald believes that customers are their most valuable asset and focus on building customer loyalty. In Hong Kong, they have a Fun Club, Mother’s Club and a Happy Meal Stamp Card for their customers. McDonald shows their friendly services and creates interactive relationship with customers. Their sincere commitment appeals for most customers toward the brand and it enhances relationship between McDonald and customers. From McDonald’s annual report, the operating income was US$3,984 million in 2005. In 2011, it was increased 114% to US$8,530 million. It reflects McDonald has a huge customer base to earn such profit. Because of loyal customers, McDonald has a slightly increase 6.2% operating income from 2008 to 2009 during economic recession.

In contrast, Hardee’s business is shrinking. Hardee’s is a hamburger fast food restaurant chain and is United States based company. It is established in 1960 for fast servicing in drive through place. In 1990s, Hardee’s entered into the overseas market. At the end of 2011, they have over 1,900 restaurants in 30 US Status and 19 countries. Their logo is a star with bright anthropomorphic smiling which is not clear to recognize their target segment. It cannot simply identify it is a children’s brand, but also cannot identify it is an adult brand. In 2006, Hardee’s modified their logo with minimizing the smiling star icon, it looks like to design for an audit customers but still doubtful. It is hard to catch on customers due to no obvious brand personality.

Some pressure groups (eg. Parents Television Council) criticized Hardee’s advertising campaigns in the 2000s. They complained Hardee’s campaigns preach “More than a piece of meat” and featuring scantily clad women are shown to promote Hardee’s products thickburger in the advertising campaigns. Customers think that Hardee’s products show pornography concept and no corporate responsibility. Such denied comments affected Hardee’s image. (Hardees’ Distateful Ad, 2009)

Hardee’s was obtained ‘The Ten Worst Corporations of 2004’for corporate social responsibility. To eat one thickburger is like to eat five McDonald’s hamburgers, its calorie is 1,420 per one. Hardee’s has no qualm about public’s health, several customers view Hardee’s as a monster (Multinational Monitor, 2004). Customers refuse to buy their food because customers don’t want to be associated as people that neglect social interest.

Most customers are satisfied with Hardee’s quick service and easy to order in drive through place, nevertheless, customers complain Hardee’s restaurants whose products’ price is higher than most other fast food restaurants, a few tables can be provided and clean up tables are not efficient (Altucher, 2006). Customer satisfaction can build up strong relationship with customers (Oliver, 1980). Nevertheless, the bad comments from customers will have negative impact for building relationship between Hardee’s and customers.

Hardee’s attempts to push customers involve in their promotion activities. They launched several gallery collections figures in 1900s. The popular figures are California Raisins (1987) and Beach Bunnies (1989), but other than that, the feed back is unenthusiastic (Altucher, 2006).

In short, Hardee’s brand personality is cloudy and has not satisfied by most customers. Therefore, Hardee’s failed to build a long term and good relationship with its customers. In 2006, Hardee’s withdrew all their business in Asia. In today’s business world, consumer-brand relationship is vital to not only exist but also to surpass in the market.

4 Conclusion

Nowadays, the market is more complicated, the theory of consumer-brand relationship has a great influence in the marketing field (Gronroos, 1997; Gummesson, 2002; Wang & Head, 2005). Customers can source much information from various media. Organizations without brand, customers cannot recognize its products. Therefore, building relationship with customers is a vitally important. In order to survive, organizations are not only satisfy customers’ needs and wants, but also need to build up solid consumer-brand relationship.

From the above analysis, the factors of building Consumer-Brand Relationship in fast food industry are presented in Appendix A. For developing effectual and permanent consumer-brand relationship, organization needs to create consistent brand personality to their target segments. The brand identification including marketing promotions and organization’s image must be aligned with their intended brand personality attributes. It is important to satisfy customers’ needs and wants, and their expectation of the brand, since higher satisfaction lead to customers’ higher involvement, and customers’ commitment to the brand (Ballester & Aleman, 2001). Higher commitment of customers, higher loyalty to the brand. As a result, organization can achieve price tolerance, they can expand of their brand, and increase larger loyal customer base. Benefits of strong consumer-brand relationship can be reflected on repurchase intention and word of mouth. Consequently, organization can acquires the larger market share and achieves its profit objective.