Introduction to Consumer Loyalty
It is essential for businesses to understand why certain consumers are loyal to certain brands and what factors influence these loyalties.
Marketing managers have the very important task of motivating buyers to become repeat purchasers by increasing:
- consumption
- attracting consumers from competitive brands
- preventing consumers from switching to alternative brands or stores.
Consumer loyalty entails a committed supporter who is a repeat buyer at a specific store, or of a specific brand.
Loyal consumers demonstrate loyal behaviour by informing friends, family and colleagues of the positive aspects of a specific store or brand.
Brand Loyalty
- Brand loyalty is expressed through consumer behaviour when making a conscious or unconscious decision to repeatedly purchase a specific brand on a regular basis.
- Brand loyalty is more than just repeat purchasing.
- There are many consumers who buy a product regularly but are not truly loyal to the brand; they repurchase the offering out of mere habit, lack of alternatives or because it is convenient.
- Real brand loyalty occurs because the consumer has the perception that the particular brand offers the right product features, image or quality at the right price.
- For businesses to create brand loyalty, they must break consumer habits and assist consumers in developing new ones.
- Businesses must subsequently reinforce consumers’ newly acquired habits by reminding them of the value of their purchase and encouraging them to continue purchasing these particular products in future.
- This type of loyalty can be a great asset to a business, since such consumers are willing to pay higher prices, cost less to serve and can bring new customers to the business.
Formation of Brand Loyalty
- Consumers’ perceived value
- Brand trust
- Product or service satisfaction
- Repeat purchase behaviour
- Commitment
are the main factors influencing brand loyalty.
Influence of a Brand Name
Brands offer convenience and guaranteed levels of quality and reduce the risk of purchasing a defective product, as consumers will reject unacceptable brands.
- Brand names on products such as toothpaste, jeans, deodorants, beer, cell phones and cars have a strong effect on brand preference.
Brand Image
Brand image provides a product with a unique character and appeal, and can be a business’s main source of competitive advantage.
The challenge for all businesses is to avoid a negatively perceived brand image and to create a brand image that is more than just an identity but represents personality.
In designing a successful brand image, a business must develop powerful images and reinforce them using communication channels.
Consumers do not just buy a product, but also the image associated with the product, such as power, wealth, sophistication, identification and association with other users of the brand.
Some ways to reinforce brand images are through communication channels, such as:
- packaging
- advertising
- promotion
- customer service
- word-of-mouth messages.
Brand loyalty and repeat buying behaviour
As mentioned previously, repeat purchases may not necessarily reflect brand loyalty or brand preference.
Businesses have to create commitment and psychological attachments between the brand and the consumer.
When consumers make a purchasing decision, especially when having to buy complex products such as electronic goods, they go through a decision-making process, which impacts on the brand they choose and to which they become loyal.
Complex desicion making and brand loyalty
Brand loyalty is seen as a reflection of the degree of involvement the consumer has in purchasing a product.
Figure 15.4 in the prescribed book, indicates the difference between high and low involvement.
- An example of low involvement products is staple food, such as bread, although it can be argued that today’s consumers are brand conscious even on this level, since they may still prefer certain brands such as Albany or Sasko.
- On the other hand, high involvement products are durable goods, such as refrigerators and cars.
Brand loyalty and Vulnerability
Consumers exhibit different patterns of loyalty as well as varying degrees of loyalty.
This difference is better expressed by the term vulnerability.
Vulnerability is used to differentiate loyal consumers:
- those who both buy and like the brand
- who buy a brand but like other brands equally well or better.
As a result a certain section of these consumers is vulnerable to other brands, which then results in varying patterns of brand loyalty.
Stages of Brand Loyalty
- Stage 1: Brand awareness
- Stage 2: Brand trial
- Stage 3: Brand image
- Stage 4: Brand preference
- Stage 5: Brand habit
- Stage 6: Brand loyalty
Stage 1: Brand awareness
The consumer becomes aware of a product or brand as a result of a company’s promotional efforts.
Brand awareness is used by marketers to arouse consumer needs and interest by using cues transmitted by the various marketing communication vehicles, such as television or SMS.
Stage 2: Brand trial
The consumer decides to try out the product.
A business can assist the consumer in this step by offering free samples or a discount in order to persuade customers to try the product.
Stage 3: Brand image
The consumer forms a brand image from messages and experience of the brand.
Stage 4: Brand preference
The consumer becomes familiar with a particular brand and chooses it from a set of alternative brands.
The brand that the consumer chooses above others is the brand to which he or she has a positive attitude.
Stage 5: Brand habit
The consumer purchases the brand habitually, meaning that the consumer purchases the brand regularly.
- An example of brand habit is when a customer who regularly purchases Stimorol chewing gum, buys his or her next best brand, such as Dentyne or Eclipse chewing gum when Stimorol is not available.
Stage 6: Brand loyalty
The consumer is now committed to the brand and displays repeat purchase behaviour.
Consumers who are loyal to the brand are those who will wait for the product to be available if it is out of stock.
Brand loyalty and Brand Segmentation
Brand-loyal consumers can be identified by marketers as a market segment;
ithey are a defined segment already as they purchase similar products.
They are also a useful group for analysing market segmentation.
Market segmentation refers to a group of consumers with similar needs and consumption patterns and, by identifying a segment, marketers are able to customise products to suit the needs of the particular group.
Brand Loyalty Correlates
You have to understand the relationship between:
- Brand loyalty and consumer buying habits
- Shopping patterns and market structure characteristics.
Models of Brand Loyalty
Two models are used to understand brand loyalty, namely the deterministic and the stochastic model.
A deterministic model
- Explains the process consumers go through from choosing the brand to being brand loyal.
- This philosophy involves variables that are internal and external to the individual and determine the outcome of behaviour.
The stochastic models:
This philosophy is based on the promise that the model of market response and the actual consumption process are both stochastic, and not just the model. 
Determining the Brand Loyal Segment
Behavioural approach and the Cognitive approach to brand loyalty, as well as the combined behavioural and attitudinal approach.
To influence loyalty a business must understand consumer attitudes and behaviour.
Attitudinal loyalty
- includes a positive attitude towards a brand, business or establishment, which is generated through an internal evaluation process.
Behavioural loyalty
- The degree of purchase repetition that an individual maintains with a brand or business. Positive attitudes do not always lead to loyal behaviour and loyal behaviour does not always imply positive attitudes.
There are three types of brand name consumers recognise before they decide to purchase an offering:
- • Manufacturer brands
- • Store brands
- • Generic brands
• Manufacturer brands
Manufacturer brands are created by manufacturers and their products depict their brand name.
Manufacturers are responsible for marketing their brand and they can capitalise on widespread distribution of the product and build customer loyalty when retailers want to sell their brand.
- Many successful clothing designers have licensed their manufacturer’s brand name beyond the clothing category to include cosmetics, perfume and jewellery.
• Store brands
Store brands are specific to retail and chain stores and the producers of these products are unknown to consumers.
Store brands are also known as private brands,
- PicknPay No Name Brand, Shoprite’s house brand and Edgars’ house brand.
• Generic brands
Generic brands are distinguished by the absence of a specific brand name and are identified by product characteristics.
They are usually lower priced than store-brand products sold by supermarkets and imitate more expensive brands
Their pricing is very competitive and they are usually sold in supermarkets as well.
Store loyalty
Store loyalty refers to the tendency to shop repeatedly at the same store.
Store patronage, in particular, can be expressed in behavioural terms by looking at consumer purchase behaviour.
Store loyalty involves the customer’s commitment to shop at a particular store and is influenced by factors such as:
- the store’s location and shopping hours
- relationship with staff
- service delivery
- variety and range of products offered
- price, promotions and competitions
- store ambience
- payment methods
- availability of credit.
