The persistence of excess brand loyalty over multiple years

This study examines the extent to which packaged-goods brands exhibit excess loyalty over a multi-year period. Brand loyalty for 300 brands in 20 UK product categories are compared to theoretically expected loyalty levels calculated using the Dirichlet model. Results show that while many brands show excess loyalty in a particular year (31%), fewer of them (25% and 22%) exhibit excess loyalty over 2 and 3?years, respectively. Almost all the brands that do show persistent excess loyalty are private-label brands or are market-share leaders (either the biggest or the second-biggest brand in the market). Therefore, excess loyalty over multiple years is a rare occurrence for a brand unless it is a market leader or a private-label brand. The study also shows that 38% of all high-share brands have consistent excess loyalty, and 37% of all private-label brands have consistent excess loyalty. These results suggest that existing explanations in the literature as to the sources of excess loyalty need further investigation. The reason is that those explanations relate to distribution effects, which should be similar across such brands. They therefore imply that most high-share and private-label brands should exhibit excess loyalty. The study suggests several avenues for further research to identify the reasons why some high-share or private-label brands show excess loyalty and others do not.     

Factors that influence manufacturer and store brand behavioral loyalty

This study examines the factors that are linked to consumer goods brands having unusually high or low behavioral loyalty, after controlling for the association between brand size and loyalty that occurs due to the ‘double jeopardy’ effect. Behavioral, or repeat-purchase loyalty is measured as the brand's average share of category requirements (in volume) among its buyers over a 12-month period. We examine a range of factors that theory or past evidence suggests are associated with higher or lower behavioral loyalty, including brand type (store brand/manufacturer brand), price level, promotion intensity, as well as average brand volume per occasion and pack size. Using extensive US panel purchasing data, we find that store brands exhibit relatively higher behavioral loyalty than manufacturer brands. We explain the theory behind this result. We also find that the brand's average pack size and volume bought per occasion has a markedly positive association with behavioral loyalty. Finally, we find that the effect of low price on excess loyalty is moderated via a positive association with average volume purchase per occasion. These findings add to the body of knowledge relating to patterns in behavioral brand loyalty for both manufacturer and store brands, as well as the marketing-mix factors that influence it.     

The effect of distribution channel diversification of foreign luxury fashion brands on consumers’ brand value and loyalty in the Korean market

The purpose of this research is to examine South Korean consumers’ brand value and brand loyalty toward foreign luxury fashion brands and current distribution channels for those brands (i.e., Department stores/Specialty stores, Factory outlet, Internet retailing, TV home shopping). Furthermore, this research examines the impact of channel diversification on consumers’ brand value and brand loyalty toward foreign luxury fashion brands. This study employed a quantitative research method. Factor analysis, ANOVA, Duncan test, and multiple regression analysis were employed to test the hypotheses. When testing brand values for each channel diversification case, participants evaluated brand value differently depending on the type of distribution channel. Participants did not show significantly different brand loyalty depending on distribution diversification cases. When the influence of brand value on brand loyalty was tested, different brand values affected brand loyalty depending on the type of distribution channel. Also, this research could suggest possible distribution channel options for foreign luxury brands to be successful in the Korean market and values they need to put an importance depending on the retail types. In addition, foreign luxury brands could apply the results of this study to their own markets.     

Brand loyalty evolution and the impact of category characteristics

A common managerial belief indicates that brand loyalty declines over the years, with consumers becoming more heterogeneous in their choices. The earlier research investigating the phenomenon of brand loyalty decline is, however, inconclusive and does not offer an answer to the reasons behind brand loyalty evolution. In this study, we investigate brand loyalty evolution and explore the impact that a number of category characteristics have on driving brand loyalty evolution. We use Danish panel data across 54 categories over a period of 6 years (2006–2011). Our findings show that at the aggregate level, brand loyalty declines, but this evolution is category-specific, with only a small number of categories showing a significant decline. We further demonstrate that an increase in category penetration results in a negative impact on brand loyalty evolution, whereas an increase in the share of private label brands has a positive impact. We discuss the implications for theory and practice.

     

Cigarette brand loyalty and purchase patterns: An examination using US consumer panel data

This study analyzes data on cigarette purchasing using an extensive panel dataset. Major findings are: (1) cigarette purchasing in this market exhibits a reverse-J, or NBD (Negative Binomial Distribution)-like shape: many infrequent buyers and fewer frequent buyers; (2) Cigarette brands do exhibit high loyalty compared to other consumer categories, and show a trend to higher brand loyalty over time coinciding with fewer price promotions; (3) The data shows a weak double jeopardy pattern of smaller brands enjoying somewhat lower loyalty; (4) Smokers of a given brand are on average more likely to purchase another large cigarette brand than another small brand; (5) A straightforward analysis method identifies occurrences of excessive cross-brand cannibalization in the portfolio of one of the major tobacco corporations; and (6) Certain brands enjoy particular appeal among specific demographic groups. The study sheds more light on consumer behavior towards a product with addictive qualities and known harmful effects.     

Store brand and store loyalty: The moderating role of store brand positioning

Despite extensive research, the relationship between store brand loyalty and store loyalty remains uncertain. Recent research suggest a nonmonotonic relationship between store brand loyalty and store loyalty: positive up to a certain store brand loyalty level, after which it becomes negative (inverted U). However, existing arguments suggest this relationship may relate to the competitive positioning of store brands, especially their price?Cquality positioning. The more quality-oriented the store brand positioning, the more favorable the effect of store brand loyalty appears to be on store loyalty. An empirical study, focused on retailers that simultaneously offer several store brands with different price?Cquality positions, corroborates this proposition. The store brand loyalty level at which store brand loyalty induces a negative effect on store loyalty occurs earlier when the store brand positioning stresses price instead of quality.     

Offering value and capturing surplus: A strategy for private label sales in a new customer loyalty building scenario

The competition between private label brand and national brands in the diaper category is investigated from the view of the private label brand manager. In this category, new customers routinely enter the category buying entry-level diaper sizes (for infants) and then progress to buy larger diaper sizes over time (as their child grows older). Thus, consumer comparisons between the private label brand and national brands are focused on single diaper sizes during any single purchase scenario. Because private label brands are known to suffer from low quality perceptions that often understate the true quality levels of private label brands, this paper advances a pricing strategy to optimize private label performance in the category. The private label brand should price significantly low for small diaper sizes (maintaining a sizeable price gap from national brand competitors). Then, in most cases, the private label brand should shrink the size of this price gap for large diaper size offerings. This strategy will successfully offer initial value to new customers, build private label brand quality perceptions and loyalty, and then capitalize on these gains through higher dollar sales in the late stages of the customer relationship. The price gap shrinking strategy is found to be generally effective, but high national brand competition and too high of an initial price gap diminish the effectiveness of the strategy.     

Store brand and national brand promotion attitudes antecedents

Retailers compete against national manufacturers by launching store brands. National manufactures regularly use brand promotions to fight store brands back. The purpose of this article is to find out whether attitudes toward national brand promotions and store brands have similar or different conceptual antecedents. The study presents and tests a model of the effects of shoppers´ characteristics (price and non-price-related) on attitudes toward store brand and national brand promotions. The results support that constructs relating to price impact both store brand attitude and national brand promotion attitude, but the strength of some of these relationships differ. Other shopper characteristics like brand loyalty and store loyalty, have similar negative and positive effects, respectively. These slight differences suggest that promotions of national brands might be a good tool for fighting back store brands, but manufacturers need to design and target these promotions carefully in order to avoid head-to-head competition.     

The impact of customer awareness of manufacturer name disclosure on retail brand attitudes and loyalty in Korea

This paper explores the impact of exposing the name of the manufacturer on a retail brand product upon national brand loyalty, retail brand loyalty and store loyalty, It does so by exploring customer attitudes towards retail brands in South Korea, where there is a legal requirement for retail brands to portray the manufacturer׳s name. For international retailers entering markets where such disclosure is a legal requirement an understanding of the implications of this for retail brand management is essential. The findings suggest that in the Korean case revealing the name of the manufacturer who supplies the retail brand on the product packaging has a positive influence on attitudes towards retail brands, although it did not mitigate the perceived risks held by customers towards retail brand products in general.     

Building Customer-Brand Relationships through Customer Brand Engagement

Abstract

Engagement has surfaced as a vital tool in marketing to enhance the customer’s relationships and loyalty with brands. Despite this, there is dearth of empirical studies focusing on the role of customer engagement within the context of brands. Thus, the main objective of this study is to investigate the role of customer brand engagement in building customer-brand relationships and brand loyalty within the context of hotel industry. Using convenience sampling technique, a sample of 418 respondents has been collected through self-administered questionnaire method from the users of hotel services in India. The study findings suggest that different dimensions of customer brand engagement vary in terms of their influence on customer-brand relationships and brand loyalty. In addition, customer-brand relationships exhibit positive and significant influence on brand loyalty. This present study enhances the understanding of customer brand engagement construct by empirically verifying its relevance in determining the long-term success of firms/brands.     

The effects of 2-tier store brands’ perceived quality,perceived value,brand knowledge,and attitude on store loyalty

This paper divides store brands into generic ones versus individual ones. Accordingly, two types of store brand loyalty are discussed, namely general versus individual brand loyalty. It also analyzes perceptions of 2-tier store brands in terms of perceived quality and value, and explores the respective effects of consumer knowledge and brand attitude on store loyalty. Results show that both low-priced and medium-priced store brands are able to build individual store brand loyalty and store loyalty among customers. Managerial implications are also provided.     

Determinants of customer brand loyalty in the retail industry: A comparison between national and private brands in South Korea

Finding motivations for customer brand loyalty is one of the most popular academic and practical research fields; in this regard, some scholars have explored motivations in the retail industry. As the concept of private brands has been one of the most widely employed strategies for business success in the industry, comparing private and national brands in terms of customer loyalty is an important topic in the retail industry. Thus, the current research focuses on exploring antecedents of customer loyalty in private and national brands, as well as investigating whether there are notable structural differences between the brands. The results, based on 1,631 responses, indicate that customer perceived service/product quality, satisfaction, trust, and cost are notable determinants of brand loyalty, while the relationship between customer satisfaction and service quality of private brands is not supported. Moreover, both indirect and direct effects of the employed factors on customer brand loyalty are reported.     

The effects of store brand loyalty on store loyalty: evidence from the Spanish market

This article studies the impact of retailers' store brands on store performance. Specifically, we analyze the extent to which store brands contribute to store loyalty. On the one hand, a positive relationship between customers' familiarity with and loyalty to the retailer's own brand and customers' loyalty to the retailer should result from the potential of the store brand to differentiate the retailer. On the other hand, an negative relationship between customers' familiarity with and loyalty to the retailer's own brand and customers' loyalty to the retailer may result from store brands' association with more price-sensitive customers, who have a higher propensity to buy at different stores that offer the best bargain. The empirical analysis, conducted with a sample of customers of leading retailers in the Spanish detergent market, shows no relationship between store brand loyalty and loyalty to the retailer. Although the purchase of store brands relates positively to higher loyalty to the retailer, this relationship deteriorates with the degree of exclusivity of store brands within the customer's shopping basket.     

Brand Loyalty and Price Promotion Strategies: An Empirical Analysis

Though brand loyalty has been studied extensively in the marketing literature, the relationship between brand loyalty and retail pricing strategies is not well understood. Designing promotion strategies involves two key decisions: the percentage reduction in price from the existing price point (depth), and the frequency with which a product is promoted. These decisions, in turn, are critically dependent upon how many consumers can be convinced to switch to a brand by temporarily reducing its price, and how many are instead brand loyal. Theoretical models of how the strength of brand loyalty influence optimal promotion strategies have been developed, but there are no rigorous tests of their hypotheses that take into account wholesale price variation. We test how brand loyalty impacts promotion strategies for two frequently purchased consumer packaged good categories. Our results confirm that retailers promote strong brands shallower and more frequently compared to brands with weak loyalty. Our results highlight the importance of carefully modeling wholesale prices when testing behavioral models on retail pricing.     

The influence of brand personality and relative brand identification on brand loyalty in the European mobile phone market

This study investigates the influence of brand personality on consumer loyalty and the moderating role of relative brand identification for multiple brands in the same product category. Survey data were collected from 1,651 respondents in the United Kingdom, France, and Germany. Results indicate that dimensions of brand personality that are positively associated with consumer brand loyalty vary across brands in the mobile phone category. Furthermore, relative brand identification not only positively affects consumer loyalty, it also moderates the relationship between brand personality and consumer loyalty. Copyright © 2015 ASAC. Published by John Wiley & Sons, Ltd.     

Smartphone preferences and brand loyalty: A discrete choice model reflecting the reference point and peer effect

Brand loyalty and interest have significant impacts on consumers' smartphone choices. What about brand loyalty and interest of smartphone in South Korea where Samsung originates from? This study investigates brand loyalty and interest and how they are affected by the satisfaction of innovative peers in South Korea. An asymmetric discrete choice model with reference-dependent preferences is applied for the analysis. The estimation results show that in South Korea the brand is the most important attribute of smartphone and Apple is the strongest in brand loyalty. Whether consumers who are currently owners of Apple smartphones continue to maintain the same brand in their next purchasing depends not only on their brand loyalty but also on the satisfaction of their highly innovative peers who currently own the Apple. On the other hand, Samsung's brand loyalty is lower than that of Apple, but the brand interest is the highest. Additionally, in all smartphone brands, satisfaction with smartphone brands owned by innovative peers has a significant impact on consumers' interest.     

Service brand coolness in the construction of brand loyalty: A self-presentation theory approach

As service brands need to find new methods to overcome consumers' distrust of physical spaces in the post-COVID-19 era, we explore how niche and mass service brands can recover their experiential value through perceptions of coolness. In three studies, we evaluate service brand coolness and its consequences for communal–brand connection and loyalty. In Studies 1 and 2, we examine consumers’ thoughts on coolness and communal connection when describing their encounters with service brands. In Study 3, we test the relations among service brand coolness, communal–brand connection, and loyalty. Our findings show that for both niche and mass firms, service brand coolness similarly enhances communal–brand connection and loyalty.     

Creation of consumer loyalty and trust in the retailer through store brands: The moderating effect of choice of store brand name

Within the current economic context, store brands play an important role in differentiation strategies based on assortment and positioning in terms of distributor prices. To begin with, this study identifies three determining aspects of retail loyalty and trust: satisfaction with price levels, the perceived image of the assortment and loyalty to the store brands (SB). Secondly, this study proposes a theoretical relational model among the aforementioned aspects. Finally, this study analyzes the moderating role that the strategy of choosing SB name (umbrella brand label vs. brands different from the label brand) plays in the relationship between loyalty to SB and loyalty to and trust in the retailer. By including this moderating variable, we seek to contribute to current academic research and to provide insights into the importance that SB strategy (label vs. own name) has for the effect of loyalty to SB on the relative results of the retail company. Our research results show that making the umbrella SB name the same as the label brand name increases the positive effect of customer loyalty to SB on loyalty to the retailer, but not the effect of trust on this loyalty compared to chains that use SB names different from those of the label. These results have important implications for management.     

A temporal analysis of behavioural brand loyalty among urban Chinese consumers

Abstract

Chinese marketing is evolving, and this is having a dramatic influence on the incomes and spending patterns of consumers. Set against these longer-run trends, the contribution of this paper is to examine the year-on-year persistence of brand purchasing and behavioural brand loyalty in packaged goods markets in China. Revealed preference data for two product categories (toothpaste and soy sauce) in two contrasting cities (Shanghai and Xi'an) are analysed, with particular attention being paid to whether brand purchasing and behavioural brand loyalty are invariant over a five-year period. Conceptually, the NBD-Dirichlet model of brand choice and purchase incidence is employed. Analysis shows that patterns found in the Chinese data are quite similar to those reported previously for Western markets, with invariant results over time – notwithstanding supply-side and demand-side changes over the study period. In particular, the double jeopardy effect and multi-brand loyalty are consistently observed in the toothpaste and soy-sauce markets in both cities over the full five-year period. Results distinct to the Chinese market are also identified: exclusive brand loyalty appears to be declining in favour of multi-brand loyalty, and there are between-city differences in the magnitude of this decline.     

Loyalty programs and their impact on repeat-purchase loyalty patterns

Loyalty programs are currently increasing in popularity around the world. This paper discusses the potential of loyalty programs to alter the normal market patterns of repeat-purchase behaviour which characterise competitive repeat-purchase markets. In line with this thinking, a large scale loyalty program is evaluated in terms of its ability to change normal repeat-purchase patterns by generating ‘excess loyalty’ for brands in the program. Panel data were used to develop Dirichlet estimates of expected repeat-purchase loyalty statistics by brand. These estimates were compared with the observed market repeat-purchase behaviour. Overall a trend towards a weak level of excess loyalty was observed, although the expected deviation was not consistently observed for all the loyalty program brands. Only two of the six loyalty program participant brands showed substantial excess loyalty deviations. However, these deviations in repeat-purchase loyalty were observed for non-members of the loyalty program as well as members and appear likely to be at least partially the result of other loyalty efforts particular to these brands.