What is Brand loyalty?

Brand loyalty is a construct that has both attitudinal and behavioral elements
then defined as "the biased (i.e., non random) behavioral response (i.e., purchase)
expressed over time by some decision-making units with respect to one or more
alternative brands out of a set of such brands, which is a function of psychological
(decision making, evaluative) processes"
One of the most cited definitions of brand loyalty is the one given by Oliver
(1999), which states that brand loyalty is a deeply held commitment to re buy or
re patronize a preferred brand consistently in the future, thereby causing
repetitive same brand or same brand set purchasing, despite situational
influences and marketing efforts having the potential to cause switching
behavior.
Khan and Mahmood (2012, p. 33) suggested a definition that brand loyalty can
be defined as the customers unconditional commitment and a strong
relationship with the brand, which is not likely to be affected under normal
circumstances.
Brand loyalty has been represented in the literature for more than eight decades,
since Copeland's introduction of brand insistence in 1923 (Jacoby and Chestnut
1978). Early research was primarily focused on the operational definition of
behavioral aspects (i.e., repeated purchase) of brand loyalty, but starting with
Jacoby and Chestnut (1978), brand loyalty has been studied in terms of both
attitudinal and behavioral aspects. Linking attitudinal and behavioral loyalty,
some recent efforts have provided significant conceptual frameworks that
distinguish true brand loyalty from spurious brand loyalty (e.g., commitment:
Odin, Odin, and Valette-Florence 2001; brand sensitivity: Bloemer and Kasper
1995; commitment and trust: Morgan and Hunt 1994). True brand loyalty can be
conceptualized as an attitude-based behavior of brand loyalty, while spuri
ous loyalty can be defined as the inertial repeated purchases with little or no
brand-loyal attitude (e.g., Odin, Odin, and Valette-Florence 2001).
Dimensions of brand loyalty
Some studies have conceptualized customer loyalty as a one dimensional
construct, while others have conceptualized it as more than one dimensional.

Behavioral loyalty
From a behavioral view, customer loyalty is defined as patronage, the proportion
of times a purchaser chooses the same product or service in a specific category
compared to the total number of purchases made by the purchaser in that
category [Rundle-Thiele and Bennett, (2001)]. Referring to this approach,
customer loyalty is interpreted as repeated purchases that result in the extension
of the purchases and expenditures with the same provider [Russell-Bennett et al.,
(2009)]. Only the customers who buy continuously from the same provider could
be considered loyal ones. But, only the behavior indicators of loyalty do not
represent an accurate framework of the reasons why these customers buy, the
way customer loyalty is developed and the factors that cause it [Jacoby and
Chesnut, (1978; Dick and Basu, (1994); Pritchard et al., (1999); Zeithaml et al.,
(1996)]. Different researchers [Dick and Basu, (1994); Jones and Taylor, (2007)];
[Russell-Bennett et al., (2009)] have criticized the use of the behavior approach of
customer loyalty. They have emphasized that the conceptualization of customer
loyalty must be done through the inclusion of attitudinal loyalty.
Attitudinal loyalty
The attitudinal dimension explains why people patronize a product or service. It
contains a preference, a positive attitude over time and a psychological
commitment. Attitudinal loyalty consists on the commitment toward a brand or
service and on the intention to buy it [Mellens et al., (1996); Russell-Bennett et
al., (2009)]. It is seen as a psychological connection with the service or product
[Jones and Taylor, (20070; Oliver, (1999)]. Researchers have conceptualized
attitudinal loyalty as an attitude, preference, intention to buy [Zeithaml et al.,
(1996)], desire to recommend the service provider to other potential customers
[Reichheld, (2003)], commitment to continue to buy at the same service provider
and strong relationship with him [Pritchart et al., (1999)] and encouraging others
to use the service. Despite the positive elements, the conceptualization of loyalty
as attitudinal has gained different criticism. Despite the thought that attitude can
precede the behavior, attitudinal loyalty has not the power to predict the actual
and future behavior [Mellens et al., (1996)]. There is little assurance that
customers who have the attitude to buy will do it in the future and this way
attitudinal loyalty will lead to scarce profits for the organization [Kumar and Shah,
(2004)]. The reliance only on the attitudinal loyalty cannot satisfactorily explain
brand loyalty.
Two dimensional loyalty
The combination of the behavioral and attitudinal loyalty is a more valid and
reliable method to measure customer loyalty [Jones and Taylor, (2007); Russell-
Bennet et al., (2009); Oliver, (1999)]. The use of both behavioral and attitudinal
components of loyalty was first proposed by Day (1969) and since then many
other studies have proposed the use of behavioral and attitudinal elements in the
conceptualization of brand loyalty [Baloglu, (2002); Day, (1969); Dick and Basu,
(1994); Jones and Taylor, (2007)] because neither behavioral loyalty nor
attitudinal loyalty alone cannot asses and analyze thoroughly the construct of
brand loyalty [Baloglu, (2002)]. Despite the number of studies dedicated to it
[Baloglu, (2002); Kumar and Shah, (2004)] there is no agreement between the
researchers about the dimensions of customer loyalty [Jones and Taylor, (2007)]
and only a few studies are focused on both dimensions simultaneously. The
literature has proposed the relationship that may exist between both dimensions
of loyalty [Li and Petrick, (2008b)] indicating that the understanding of attitudinal
loyalty can be a better predictor of future behavior than past one.
These authors specified also four kinds of brand loyalty:
1. True focal brand loyalty is when the consumer demonstrates loyalty to the
brand that is being investigated, referred to as the focal brand.
2. True multi-brand loyalty is when the focal brand is included in a set of brands
that the customer patronizes.
3. Non loyal repeat purchasing of focal brand occurs when a consumer
patronizes a brand even though he or she does not hold a strong emotional
commitment towards it.
4. Happenstance purchasing of focal brand occurs when consumers of a different
brand patronize the focal brand in the absence of their personal choice.
Dick and Basu (1994) identified four categories of loyalty :-
1. True loyalty can be reached by the combination of high attitude and high
patronage from the same provider. This is the ideal case for every business
and service provider who wants to have loyal customers.
2. Latent loyalty: is the case when the level of repeated purchases at the
same provider is low or there are not such purchases while the favorable
attitude is strong. The reason for this may be situational factors or social
norms which lead the customers toward a competitive provider while
having a stronger attitude toward another one. So, these factors have a
greater impact than the attitude in determining of buying behavior.
Customers who are more oriented toward price may choose the service
provider based on the offered price although they may have strong positive
attitude toward another provider. Customers who cannot change the actual
provider may show latent loyalty to other providers and managers should
try to impact on these situational factors
3. Spurious loyalty: is the case when there is no relative attitude or this
attitude is weak while the level of repeated purchases is high, so there is
behavioral but not attitudinal loyalty. Customers continue to buy to the
same provider without having a strong relative attitude but for other
reasons such as familiarity with the provider, prior agreement or because of
the absence of other alternatives. This kind of loyalty may be with products
or services that demand little involvement or when the customer cannot
percept the differences between brands or services. It may be the result of
interpersonal relationships where the purchase is continuous even though
the service or product is perceived to have minor differences from the one
of the competitors. The provider should know to change this situation in
true loyalty encouraging the positive attitude through the marketing
strategy that aims the attitudinal loyalty.
4. No loyalty: is the combination of weak attitude and low purchases. The
cause for the low relative attitude may be the entry of a new
service/product so it is impossible for the customers to compare it to actual
ones. Another reason may be the competitiveness of brands or services as
 they may be viewed as very similar and without differences with each-
other.

Is it Important to create brand loyalty or to have loyal customers,

does it impact the topline and bottomline?
The concept of brand loyalty has been recognised as an important construct in
the marketing literature for at least four decades (Howard and Sheth, 1969), and
most researchers agree that brand loyalty can create firm benefits such as
reduced marketing costs (Chaudhuri and Holbrook, 2001), positive word of mouth
(Sutikno, 2011), business profitability (Kabiraj and Shanmugan, 2011), increased
market share (Gounaris and Stathakopoulos, 2004) and a competitive advantage
in the market (Iglesias et al, 2011).
A study by Bain & Co. (Reichheld and Teal 2001) shows that a 5% increase
in customer loyalty can increase a company's profitability by 40 to 95 %,
and an increase in customer loyalty of 1 % is the equivalent of a 10% cost
reduction.
Advertising and brand loyalty are known to have a mutually beneficial
relationship. For example, Raj (1982) found that the loyal users of a brand
increased their volume of purchase in response to increased advertising,
while nonloyal users did not increase their purchases in spite of the
increased advertising.
Different studies have shown that attracting new customers costs a
business 5 times more than attaining existing ones [Kotler and Armstrong,
(2012)] so brand and customer loyalty become very desirable.

Is still relevant in mordern marketing?

What are the drivers of brand loyalty, is there a framework to
measure or assess brand loyalty?
Drivers of Brand Loyalty
1) Brand Experience
Brand experience consists of four dimensions
Sensorial
Affective
 Behavioural
Intellectual
2) Brand Commitment
Brand commitment can be defined as an enduring desire to maintain a
valued relationship
The aforementioned definition, as it illustrates that a highly committed
consumer will work harder to maintain a relationship with a brand than a
consumer that holds no, or low commitment to a brand.
Brand commitment consists of:-
Affective Commitment
It reflects the extent to which a consumer wants to maintain a
relationship with a brand based on their emotional attachment to
the brand. This phenomenon includes the extent to which the
consumer identifies with the brand, and is the core of the consumer-
brand relationship (Louis and Lombart, 2010). Furthermore, Bansal et
al., (2004) explained that affective commitment is centred around
the consumers emotional attachments to the brand, their
identification with the brand, and their involvement with the brand.
Continuance Commitment
Continuance commitment, also known as cost-induced commitment
(Ritzer and Trice, 1969), calculative commitment (Srivastava and
Owens, 2010) and economic commitment (Evanschitzky and
Wunderlic, 2006), differs from affective commitment in several ways.
There are numerous definitions on the matter, however, most
researchers tend to agree that continuance commitment occurs
when the benefits of staying trumps the costs of leaving a
relationship (Bansal et al, 2004). While affective commitment is
based on the consumers emotions, continuance commitment is a
more rational component, where the cost of leaving a relationship,
and a lack of other alternatives creates a rationale for the consumer
to be committed to the brand (Meyer and Herscovitch, 2001; Bansal
et al, 2004). Fullerton (2003) further explained that continuance
commitment occurs when specific actions are taken that will force
the relationship over a period of time, such as contracts, service
agreements, investments and pledges. These types of relationships
 can often create feelings of entrapment or dependence, which both
are fundamental in the continuance commitment construct. While
consumers who experiences affective commitment will resist any
attitudinal changes, and will always behave favourably towards the
brand, this is not necessarily the case for consumers who stays in a
brand relationship merely because they feel like they have to

Loyal Customers are emotional creatures which are highly driven by their
desire to maintain a relatioship with the brand they feel emotional
connection with. Continuance commitment was not found to have any
considerable impact on the consumers loyalty towards a brand therefore
factors such as price and other available alternatives do not influence the
 desire to maintain relationshio with a brand. Moreover, although the
feelings related to continuance commitment engages the customer in a
brand relationship, these feelings are not enough to develop feelings of
loyalty in consumers mind.
Affective commitment, on the other hand, was found to be an important
driver of brand loyalty. organisations should therefore rather focus on
creating positive brand experiences for the consumer, and establishing an
emotional connection between the consumer and the brand, as this
emotional connection is vital in establishing affective commitment
There are five variables that have been uncovered to be potential drivers of brand
loyalty; several have multiple indicators that are combined. These variables are:

Dependable: described as always deliver to expectations, I can depend

on, I trust and consistent experiences

Better: described as better than others, and only brand that does what it
does

Social media: described as has interesting and engaging content online

Light emotional connection (LEC): described as makes me happy

Heavy emotional connection (HEC): described as connects with me

emotionally, makes me feel inspired and has a purpose I believe in
Consider the satisfied model. The dependable variable has more than three and
a half times the explanatory impact as does the better variable. This confirms
the hypothesis that satisfied loyalists are driven by habit, familiarity, comfort and
satisfaction, and being better is not as important as delivering the brand promise.
They are instead going to stick to the brand as long as it delivers. Controlling for
dependable and better (perceived superiority), the light emotional
connection variable has a meaningful role, about equal to that of the better
variable, while the heavy emotional connection variable has zero impact.
Finally, the social media variable, as expected, was not a driver, essentially zero.

The satisfied group included brands that do not engender much passion or
emotional connection. Of the top 50 brands of the Relentless Relevance 2015
database, 15 were classic brand names that largely delivered functional benefits
and were extremely high on the dependability measure. Leading the way with
positions in the top 25 were Betty Crocker, Band-Aid, Clorox, KitchenAid and
Folgers. All were extremely high on the dependable and trust dimensions as
well. That reinforces the hypothesis that delivering to expectations may not be
glamorous, but it can drive a brands ability to create and keep a loyal segment,
which can be the basis of a healthy long-term business. Theres also likely some
emotional benefit linked to the nostalgia of growing up with these brands. They
become part of the fabric of peoples lives.

Next consider the committed model. The better variable has a large impact,
about equal to that of the dependable variable. The heavy emotional
connection variable has an explanatory power equal to the better variable and
more than twice that of the light emotional connection variable. Finally, the
social media variable is now more of a player, albeit smaller than the other
variables.

The committed customer group is necessary if you want to be a leader in more

involving categories. This is the group that can deliver social buzz and net
promoter scores. And it can defend you when you have an unfavorable incident.
But to create and nurture this group, it is clear that brands must get beyond
dependable to better and get beyond happy to deliver a meaningful
emotional feeling that connects and inspires. The top brands on the committed
scale such as Apple, Microsoft, Netflix and Chick-fil-A, also score high on the
emotional connection, inspiring and having a purpose. Apple, in fact, is in the top
two on each of these dimensions. They are clearly more than functional, high-use
brands that deliver satisfaction. Social media also became relevant. The
committed will likely include people that are influencers on social media, and they
have an impact far beyond their number.

The strength of the dependable dimension to explain the committed status of a

brand is noteworthy. Many of the top brands on the committed scale such as
Apple, Netflix and Microsoft ranked extremely high on dependability and ease of
use. Amazon, added to the study in 2016, was also extremely high in the
committed and dependability measures. The ability of these high-tech, innovative
brands to deliver an astonishing level of performance on the dependability
dimensions is a crucial and largely unrecognized element of their brand strength.
In general, they deliver on their brand promise without frustration or
disappointment.

How to build brand Loyalty, New ways being used or can be used to
create brand loyalty?
FSTA Framework
 Information Processing View
Cognitive representations of experiences
Familiarity Knowledge about the brand

Customer's needs and wants oriented

Emotional evaluation
Satisfaction Positive consumption experiences

Customer Satisfcation
Commitment and Cooperation
Trust Relationship Marketing

Emotional Commitment
Favorable attitude
Attitudinal
Loyalty True Brand Loyalty

What can TIE do to create brand loyalty?