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.