A Review of the Literature on Brand Loyalty and Customer Loyalty

Page 1: Overview and Definitions

• Brand Loyalty vs Customer Loyalty

  • Brand Loyalty:

    • A biased behavioral response over time.

    • Indicates a consistent repurchase pattern due to positive feelings towards a brand (Mellens, DeKimpe, and Steenkamp, 1996).

    • Influenced by affective, behavioral, and attitudinal factors.

  • Customer Loyalty:

    • A deeply held commitment to re-buy a preferred product, despite potential switching influences (Oliver).

    • Associated with consumer spending power and loyalty programs.

• Research Context:

  • Distinguishes Brand Loyalty (perception of value) from Customer Loyalty (spending power).

  • Both concepts share constructs with an emphasis on affective and behavioral dimensions.

Page 2: Benefits and Importance of Branding

• Consumer Benefits:

  • Aids in product identification and evaluation of quality (Pelsmacker et al., 2001).

  • Makes shopping efficient, reducing decision-making time and perceived risks.

  • Strong brands lead to favorable consumer attitudes, increasing sales.

• Brand Value:

  • A brand creates a strong, positive meaning impacting consumers' loyalty and preferences.

Page 3: Understanding Brand Loyalty

• Definition of Brand Loyalty:

  • Preference for a particular brand in a product category, resulting in repeat purchases due to perceived quality (Jacoby and Chestnut, 1978).

  • Influenced by long-term product use and trust.

• Theoretical Concepts:

  • Brand loyalty measured by metrics such as percentage of purchases, number of purchases, and repeat buying behavior.

  • Daniel A. Aaker's definition highlights how brand loyalty indicates consumer attachment and affects switching behavior based on brand equity.

• Aaker's Brand Loyalty Pyramid:

  • Levels:

    1. Non-loyal Consumers

    2. Satisfied Consumers

    3. Habitual Buyers

    4. Loyal Buyers (consider brand as a friend)

    5. Committed Buyers (extremely loyal)

Page 4: The Role of Brand Loyalty in Brand Equity

• Aaker's Core Concept:

  • Brand loyalty is integral to brand equity, influenced by awareness, associations, and perceived quality.

  • Loyalty is essential for competitive advantage and reducing entry barriers for competitors (Reichheld, 1996).

Page 5: Dimensions of Brand Loyalty Research

• Key Dimensions:

  • Brand loyalty as a multi-dimensional construct including behavioral and attitudinal measures.

  • Jacoby and Chestnut's categories for measuring brand loyalty encompass behavioral intention and actual purchases.

• Sheth and Park's View:

  • Proposed three dimensions: emotive, evaluative, and behavioral tendencies towards brands.

Page 6: Customer Loyalty Definition and Framework

• Oliver's Definition:

  • Customer loyalty as commitment to consistently re-patronize a product or service, explaining situational responses and loyalty development phases.

• Dick and Basu's Framework:

  • Explored the strength of the relationship between attitude and repeat purchasing behavior.

Page 7: Research Contributions on Loyalty

• Key Authors and Contributions:

  • Jacoby and Chestnut (1978): Framework for measuring psychological commitment.

  • Dick and Basu (1994): Relative evaluation between attitude and repeat patronage.

  • Christopher et al.: Loyalty ladder model showing customer progression.

Page 8: Emerging Constructs in Loyalty Research

• Innovative Measurement Approaches:

  • Development of scales to measure loyalty including commitment indicators and psychological measures.

  • Emphasis on service loyalty definitions in evolving market contexts.

Page 9: Behavioral vs Attitudinal Measures of Loyalty

• Behavioral Measures:

  • Focuses on actual purchase behavior; advantages of direct relatedness to performance.

  • Limitations include potential spurious loyalty and non-distinction from repeat purchases.

• Attitudinal Measures:

  • Captures consumer feelings and sentiments toward brands, providing deeper insights into loyalty psychology.

Page 10: Integrative Approaches to Loyalty

• Evolution from Behavioral to Attitudinal:

  • Recognition for a holistic understanding of loyalty, integrating situational factors into behavioral models.

• Day’s Composite Approach:

  • Suggests loyalty encompasses both attitudinal and behavioral perspectives.

Page 11: Theory of Reasoned Action in Loyalty Research

• Fishbein and Ajzen (1975):

  • Proposed that behavior is influenced by attitudes and subjective norms, applicable in marketing contexts.

Page 12: Conclusion and Future Directions

• Market Context:

  • As competition increases, understanding brand and customer loyalty becomes pivotal for success.

  • Recognizing consumer irrationality and decision-making inconsistencies remains essential in marketing strategies.

References

• Aaker, D. A. (1991). Managing Brand Equity. The Free Press, New York.

• Pelsmacker, P., Geuens, M., & Van den Bergh, J. (2001). Marketing Communications. Pearson Education Limited.

• Dick, A. S., & Basu, K. (1994). Journal of The Academy of Marketing Science, 22, 99-113.

• Fishbein, M., & Ajzen, I. (1975). Belief, Attitude, Intention, And Behaviour. Addison-Wesley.