User:Abulak/BrandLoyaltyTwentyFirstCentury

Effectiveness of Brand Loyalty

Definition

Brand loyalty has been an effective marketing strategy used all over the world for quite some time. Almost every major brand uses it to some extent.

An online dictionary (Business Dictionary ) defines brand loyalty as "the extent of the faithfulness of consumers to a particular brand, expressed through their repeat purchases, irrespective of the marketing pressure generated by the competing brands."

Another way to define Brand Loyalty is "when consumers become committed to your brand and make repeat purchases over time."

Brand loyalty stems from the roots of the consumers behavior and is ultimately decided based on one's preferences. Once a consumer/customer becomes loyal to a certain brand, they will, in most cases, purchase that product or service regardless of price of convenience. United States companies, along with companies around the world, use a variety of different methods to establish such a relationship with their consumers.

Also, for more definitions see the Brand loyalty Wikipedia page.

Effects

Brand loyalty is established and kept through many means and topics such as price, prior purchasing habits, customer satisfaction, and age play a role in doing so.

Income of Consumer

Families that are better off, or have an higher income, may ignore or not participate in weekly sales of products or services, thus staying loyal to the brand that they always purchase. However, a household that has a lower based income and is larger is much more apt to purchase the least expensive product or service. This means these lower based income families are much less likely to establish brand loyalty with certain brand or company.

Price of Product

A study done on the consumption of orange juice in the United States by graduate students and professors at the University of California Berkeley shows that price does effect brand loyalty.

Huang and his team found little empirical evidence that there was much brand loyalty in the orange juice retail market. Sixteen percent of consumers that purchase refrigerated orange juice stay true to the United States national big brand names such as Minute Maid and Tropicana. Six percent of consumers of refrigerated orange juice stay try to private brands of orange juice. This leaves seventy-seven percent of the sampled market changing what brand of orange juice they purchase weekly based on the current sale or different prices.

Consumer Purchasing Habits

A study done by Tesfom and Birch says previous consumer purchasing habits do effect how loyal consumers are to a product.

The way the consumer purchases their own food, is the way they purchase their dog's food. If the consumer is loyal to healthier brands of food, that same consumer is much more likely to be more loyal to dog food brands that produce healthier food. Same is true for vegetarians. Vegetarian consumers are more likely to buy from brands that do not put meat in their dog food.

A consumers purchasing habits play a major role in the process of picking other brands for different products or services. This study shows that the consumer will purchase from similar types of brands even when not purchasing for themselves.

Customer Satisfaction and Overall Experience

Consumer/customers are much more likely to establish brand loyalty with a company or brand when they enjoy their experience with a product or service. Brands that use this effect to try and attract consumers focus on three primary topics of customer service.

(1) How reliable the company is, are they able to live up to their promises.

(2) How responsive the company is, are they willing to provide a quick helping hand.

(3) Does the company provide assurance, does the companies employees, through their ability provide and demonstrate trust and confidence.

This study shows that if a company or brand is successful in doing the previous three responsibilities there customers will have a better experiences shopping with their company. If the customer has a better experience the customer service rating will rise. If the customer service rating rises so doesn't loyalty from their customers, which in the end increases the amount of brand loyalty to their product or service.

Age

Brand loyalty may differ with the age. Older children may prefer brands more strongly than younger ones based on their overall knowledge of certain brands and companies.

Seven hundred and thirty-nine students were surveyed and the results show that in most cases the loyalty of younger consumers is based on that of their parents. Younger consumers were shown to be more likely to by the brand or use the services of which their parents buy or use.

Does Type of Product or Service Matter?

Product

In many cases it seems too play some sort of role.

When purchasing a more expensive, investment such as an automobile about forty eight percent of the purchasers purchase an automobile from the brand they had previously purchased from. This seems to be a lot more than the twenty-three percent that stayed loyal to orange juice, a less expensive, quick purchase.

In most cases, even the people who didn't end up purchasing the same brand still thought about their old brand initially.

How Brands Get Us To Become Loyal

Along with the effects above major brands and companies around the world promote and reach out to consumers in different ways in attempt to establish brand loyalty for years to come.

Reward Programs

This just might be one of the biggest, more popular ways companies are implementing to get consumers to return.

Subway (restaurant), one of the world's most famous sandwich shops, is a prime example of using customer reward programs to establish a returning market. Subway uses a card to tract a customers purchases on them. Upon receiving the rewards card, the customer will receive one point for every dollar the customer spends. This points will be kept track of on the card and can be used to get free menu items at participating Subways.

Other Examples of Reward Systems: See Wikipedia page, Loyalty program

Social Networking Sites

Social Networking Sites such as, Facebook, Twitter, and Myspace, have become all the rage now-a-days and companies are starting to take advantage of its use.

Companies make profiles on these sites because it easily creates a way to reach a large community. Brand loyalty is established earlier on in life. This is why companies take advantage of younger adults using these networking sites.

Store Credit Cards

Many clothes stores will allow you to set up an account with them and be able to put purchases from their stores onto a card to be paid of at a later date. A popular example of this would be the credit card offered from Abercrombie and Fitch.