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A Simplified Model to Measure Brand Loyalty

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A Simplified Model to Measure Brand Loyalty

&
Bisschoff A. C.
North-West University Potchefstroom Business School, South Africa, Private Bag X6001, Potchefstroom, 2520
&
Moolla I. A.122
Management College of South Africa, South Africa, Po Box 49494, East End, Durban, 4018
&
*Corresponding author: christo.bisschoff@nwu.ac.za
&
Abstract:
A brand loyalty model was developed, validated and tested in various industries by Moolla and Bisschoff. This paper is
an extension of this research, and the objective is to simplify and further validate the model into an empirical working
model that could measure brand loyalty. The original model employed a strong theoretical base to identify 26 brand
loyalty influences employed by various researchers throughout history in brand loyalty models. These influences were
reduced to 12 prominent influences to construct the brand loyalty model. Now, by using factor analysis as purifying
tool, this paper’s results show that after three rounds of simplifying the measuring criteria, an excellent cumulative
variance of 90% was achieved. In addition, the original 12 brand loyalty influences could be reduced to 9 influences.
The original 50 measuring criteria were also reduced to 39 in the new empirical model, signifying yet another
simplification of the original model whilst improving its usability in a business and academic application setting. To a
large extent the results are confirmatory in nature, confirming existing brand loyalty influences. However, a number of
low contributing measuring criteria were identified and omitted from the model.
Keywords: brand loyalty, factor analysis, branding, brand management

1. INTRODUCTION
The concept brand loyalty has become one of the most researched topics within the field of services
marketing since 1990. With the increased interest in a more relational approach to marketing, the
focus shifted to building long-term relationships with customers. This approach is in contrast with
the traditional view of transactional marketing, where the emphasis was on single transactions. As
brand loyalty research intensifies, the brand loyalty models became more refined and representative
of the products and segments they occupy. One challenge however often experienced by researchers
is the construction of a reliable and valid measuring instrument for brand loyalty research to be
confirmed statistically. It becomes even more challenging when a larger number of variables and
products are involved. Resultantly, it then becomes most complex when multiple dimensions of
behaviour and attitudes are added to measure brand loyalty.

In this regard research by Moolla and Bisschoff (Moolla, 2010; Moolla & Bisschoff, 2012a; 2012b;
2013) developed and validated a brand loyalty model that could be operationalized as managerial
tool. This model identified 12 brand loyalty influences, and employs 50 measuring criteria to
measure brand loyalty reliably.

2. PROBLEM STATEMENT
The researchers Moolla and Bisschoff have shown that their model to measure brand loyalty is a
valid and reliable model. However, although the model is proven to be fit to be operationalized as
managerial tool, it still employs a significant number of measuring criteria and do pose some
complexities that act as deterrent for business to adopt the model. In this regard the success by
Parasuraman, Zeithaml and Berry (1985), with the development of their Servqual model in the
1980s, paved the way by showing that industry readily adopts simplified and easy usable academic

22 1
The paper stems from research by AI Moolla (student number: 21641269) for his PhD studies at the North-West University.
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models in business practices. Thus, further research into the brand loyalty model is required to
simplify, improve and make the model a more acceptable one for business managers to adopt and
employ as a managerial tool.

3. OBJECTIVES
The primary objective is to simplify the brand loyalty model of Moolla and Bisschoff (2013).
The secondary objectives are to:
• Determine if all 12 the brand loyalty influences are required to measure brand loyalty;
• Determine if all the measuring criteria are required to measure brand loyalty;
• Improve the effectively of the measurement (increasing variance explained by the
measurement);
• Determine the reliability of the factors identified as brand loyalty influences; and to
• Measure correlations between the identified factors.

4. LITERATURE FOUNDATION
The concept of brand loyalty, as integral part of the brand management strategy evolved in the
1950s, while the attitude to measure brand loyalty as a construct was initiated by the composite
model of Jacoby and Chestnut in 1971. Since then, the concept of brand loyalty became one of the
most researched topics within the field of services marketing from the 1990s onwards with studies
and models by various researchers (Jacoby and Chestnut (1978), Traylor (1981), Dick and Basu
(1994), Park (1996), Chaudhuri and Holbrook (2002), Giddens (2001), Jensen and Hansen (2002),
Schijins (2003), Musa (2005), Rundle-Thiele (2005), Punniyamoorthy and Raj (2007), Maritz
(2007) and Kim et al. (2008). From these and others studies, Moolla (2010) identified twelve brand
loyalty influences and their relative importance to brand loyalty to develop an integrated model of
brand loyalty. The theoretical origin and the brand loyalty influences are summarised in Table 1.

Table 1: Brand loyalty influences and its origin

INFLUENCE DESCRIPTION RESEARCHERS
Customer satisfaction is believed to mediate consumer learning from prior Punniyamoothy and Raj
experience and to explain key post-purchase behaviours such as complaining, (2007), Musa (2005),
Customer word of mouth, and repurchase intention and product usage. Customer Schijins (2003), Delgado
1
Satisfaction satisfaction has a significant influence on repurchase intention and post (2001), Dick and Basu
purchase complaint and that the higher level of customer satisfaction will lead (1994), Jacoby and
to a higher level of brand loyalty. Chestnut (1978).
In many markets, consumers face non-negligible costs of switching between Kim, Morris and Swait
different brands of products or services. There are at least three types of (2008), Maritz (2007),
Switching switching costs: transaction costs, learning costs, and artificial or contractual Schijins (2003), Dick and
2 Costs costs. Switching costs have been theoretically shown to have positive effects Basu (1994), Jacoby and
over prices, profits, and entry deterrence, and have been linked to a variety of Chestnut (1978).
competitive phenomena such as price wars and deep discounts offered by
firms to attract new customers.
Trust exists when one party has confidence in an exchange partner’s reliability Punniyamoothy and Raj
and integrity. It is suggested that trust positively affects commitment and is (2007), Musa (2005),
the basis for loyalty. Research by Garbarino and Johnson (1999:66) found a Schijins (2003), Chaudhuri
strong relationship between loyalty and brand trust. Their research suggested and Hoibrook (2001),
3 Brand Trust
that there is a distinct need of trust in developing positive and favourable Garbarino and Johnson
attitudes towards brands. Brand trust is the central construct for any long-term (1991), Dick and Basu
relationship and is an important contributor in attaching a kind of emotional (1994), Jacoby and
commitment that leads to long-term loyalty. Chestnut (1978).
Relationship Proneness is an individual characteristic of the buyer, and is Kim, Morris and Swait
defined as “a buyer’s relatively stable and conscious tendency to engage in (2008), Schijins (2003),
relationships with sellers of a particular product category”. Relationship Chaudhuri and Hoibrook
Relationship proneness the stable tendency of a consumer to engage in relationships with (2001), Odekerken-
4
Proneness retailers and can therefore be considered as a part of a consumer’s personality. Schroder (1999), Dick and
In addition, relationship proneness is a conscious tendency to engage in Basu (1994), Jacoby and
relationships as opposed to a tendency to engage in relationships based on Chestnut (1978).
inertia or convenience.
Product involvement involves an ongoing commitment on the part of the Kim, Morris and Swait
5 Involvement
consumer with regard to thoughts, feelings and behavioural response to a (2008), Punniyamoothy
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product category. Involvement is an unobservable state of motivation, arousal and Raj (2007), Musa
or interest toward a product. Studies by Jacoby and Chestnut, (1978); Park (2005), Giddens (2001),
(1996); Traylor (1981) and LeClerc (1997) that examined the relationship Park (1996), Dick and
between product involvement and loyalty indicate a definite correlation. Basu (1994), Jacoby and
LeClerc and Little (1997) found that brand loyalty interacted with product Chestnut (1978).
involvement. In a similar vein, Park (1996) in his study found that
involvement and attitudinal loyalty were highly correlated. Research
conducted therefore suggests that higher level of involvement with a brand
leads to higher level of brand loyalty.

Punniyamoorthy and Raj (2007) describe perceived value as the consumer’s Kim, Morris and Swait
overall assessment of the utility of a product based on perceptions of what is (2008), Punniyamoothy
received and what is given. Perceived value is made up of several and Raj (2007), Musa
components. The four most common components identified that represent (2005), Schijins (2003),
perceived value are Giddens (2001), Garbarino
• Functional value and Johnson (1991), Dick
Perceived and Basu (1994), Jacoby
6 • Emotional value and Chestnut (1978).
Value

• Price-worthiness factor

• Social value

Brand commitment according to Kim, Morris and Swait (2008:2) occurs when Kim, Morris and Swait
consumers pledge or bind themselves them to purchase the brand. Customer (2008), Punniyamoothy
commitment is a central construct in the development and maintenance of and Raj (2007), Musa
marketing relationships because it is a key psychological force that links the (2005), Schijins (2003),
consumer to the selling organization (Bansal, Irving and Taylor (2004). The Chaudhuri and Hoibrook
nature of commitment according to Fullerton (2005:161) is that it is an (2001), Garbarino and
attitudinal construct representing customer feelings about the act of Johnson (1991), Dick and
maintaining a relationship with a commercial partner. Delgado (2001:299) Basu (1994), Jacoby and
argues that commitment explains the process by which it is presumed that a Chestnut (1978).
7 Commitment customer is loyal because he/she has a favourable attitude toward the brand
and is also a frequent buyer of that brand. This process is a feature of brand
communities in which consumers share identification with a brand they
consume as individuals and as part of the community (McAlexander,
Schouten, and Koenig, 2002:18). Intuitively, affective commitment would lie
at the heart of a consumer – brand relationship because consumers come to be
identified with and be involved with many of the brands they regularly
consume (Fournier, 1998:41). There is overwhelming evidence to suggest
that the higher the level of commitment, the higher the level of brand loyalty
(Fullerton, 2005:162).
The consistent repeat purchase is one kind of “Loyalty-Prone” behaviour Kim, Morris and Swait
(Cunningham, 1956:29) which forms the base for brand loyalty. Repeated (2008), Punniyamoothy
purchase behaviour is an axiomatic term that simply refers to the extent to and Raj (2007), Musa
which consumers re-purchase the same brand in any equal-length period of (2005), Schijins (2003),
time (Ehrenberg, 1988:176). The strength of behavioural brand loyalty is, Chaudhuri and Hoibrook
therefore, directly a function of the repetitive occurrence of purchase or (2001), Garbarino and
Repeat consumption behaviour. The consumer according to Gordon (2003:333) Johnson (1991), Dick and
8
Purchase establishes a systematic biased response or habit simply due to the frequency Basu (1994), Jacoby and
of encounters. Chestnut (1978).

Once the behavioural brand loyalty is strongly manifested by the consumer, it

is very difficult to change the systematic bias away from the brand thus
resulting in repeat purchase pattern leading to higher level of brand loyalty
(Chaudhuri and Holbrook, 2002:43).
Brand affect is defined as the potential in a brand to elicit a positive emotional Musa (2005), Schijins
response in the average consumer as a result of its usage (Chaudhuri & (2003), Chaudhuri and
Holbrook, 2002; Morgan and Hunt (1994). In another study, brand affect is Hoibrook (2001),
defined as a brand's potential to elicit a positive emotional response in the Moorman, Zaltman and
average consumer as a result of its usage (Moorman, Zaltman, & Deshpande, Deshpande (1992), Dick
1992). and Basu (1994), Jacoby
9 Brand Affect
and Chestnut (1978).
Most commonly, affect is characterized in terms of two independent
dimensions: positive and negative. Several authors suggest that people strive
to experience positive affect and avoid negative affect. Furthermore, Baker et
al. (1992) find a positive relationship between positive affect experienced in a
retail context and willingness to buy. Moreover, they report that the positive
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affect may mediate the effects of store image on loyalty. In line with Watson
and Tellegen (1985) we define positive affect as the extent to which an
individual affirms a zest for life.
With the geometric proliferation of increasingly meaningless brands in the Kim, Morris and Swait
marketplace, consumers are now seeking brands that establish relevance (2008), Tucker (2005),
Moore (2008:920). A brand according to Tucker (2005:87) needs to stand for Musa (2005), Schijins
something that actually matters in a world of too many brands for human (2003), Chaudhuri and
cognition. Brands that are relevant (it has freshness about them and portray Hoibrook (2001), Giddens
Brand positive significance) are according to Liddy (2001:17) a key component in (2001), Dick and Basu
10
Relevance ensuring brand loyalty. As businesses, nonprofits, and governmental entities (1994), Jacoby and
alike are embracing branding and spending more money on marketing, their Chestnut (1978).
brand messages need to become more complex and orchestrated to carry more
meaning and to establish effective brand relevance. The traditional strategies
of repetition are inadequate of themselves to create either the “authentic
newness” or the “individual”.
Perceived performance is the customer’s evaluation of product or service Musa (2005), Schijins
performance following the consumption experience. Brand performance (2003), Chaudhuri and
according to Musa (2005:47) is the subjective evaluation of the core product Hoibrook (2001), Endut
Brand (i.e., attributes of the focal product), comprising both intrinsic (effectiveness) (1999), Dick and Basu
11
Performance and extrinsic (packaging) characteristics. Direct seller performance refers to (1994), Jacoby and
performance-delivery elements including the direct salesperson’s Chestnut (1978).
characteristics and services offered (Endut, 1999; Raymond and Tanner,
1994).
Kotler and Keller (2006:177) regard culture as the most important consumer Punniyamoothy and Raj
buying organization in society. Grant (2005:54) confirms that young (2007), Mann (2007),
individuals remain loyal to family brands until other factors take over. Mann Musa (2005), Schijins
(2007:2) maintains that family and culture plays an integral role in purchasing (2003), Chaudhuri and
12 Culture
behaviour and brand loyalty. Simons (2004:112) adds that family introduces a Hoibrook (2001), Dick and
psychological dimension to brand loyalty in that it indirectly assures security Basu (1994), Jacoby and
and trust through generations of use. Simons (2004:112) also maintains that Chestnut (1978).
nostalgia is a related factor that keeps individuals loyal to classical brands.
Moolla & Bisschoff (2012a)

5. RESEARCH METHODOLOGY

5.1 Data collection

The sample consisted of consumers in the databases of four higher education institutions in South
Africa. More specifically, the population consisted of part-time students enrolled on a Master of
Business Administration degree or post-graduate business courses. The students are in full time
employment. The rationale behind the selection of this sample was the high exposure the
respondents have to a wide range of brands, their strong educational background and higher
income. A randomly selected sample of 550 was drawn. It was also possible to achieve a highly
favourable questionnaire return rate of 98% (541 out of 550) using the direct approach data
collection approach.

5.2 Data analysis

The data were analysed by exploratory factor analysis. The minimum factor loadings were a high
0.70 (Statistica, 2014) while duel loading criteria were also eliminated. The Kaiser, Meyer and
Olkin measure of sampling adequacy (minimum requirement 0.70) and Bartlett’s test of sphericity
(<0.005) were employed to determine suitability for factor analysis as analytic tool (Field, 2007).
Correlations between the brand loyalty influences (factors) and the reliability thereof were
determined by Pearson correlation coefficients and Cronbach Alpha coefficients (α>0.70) (Field,
2007).

6. RESULTS

The factor analysis was repeated three times, each time eliminating strong dual loadings and low
loading criteria from the analysis (Fields, 2013). The first analysis (Original model) depicts the
point of departure, namely the original model as developed by Moolla (2010), with the last column
referring to the simplified final model. The results of the statistical procedures appear in Table 2.
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Table 2: Criteria employed to simplify the model
Original Model Improved model Final model
KMO test of sample adequacy 0.568 0.778 0.778
Bartlett’s test of sphericity 0.000 0.000 0.000
No. of factors extracted 10 9 9
Cumulative variance explained % 89.07% 88.86% 90.27%
No of statements 50 41 39
Statements omitted 5, 13, 20, 27, 28, 30, 12 & 29 ***
37, 42 & 43

The results are promising. From the table it is clear that the model improved as it was simplified. The KMO value improved from an
unsatisfactory 0.568 to a satisfactory 0.778. The cumulative variance explained increased marginally from a very satisfactory 89% to
90%, but important to note, it did so by eliminating 11 of the 50 measuring criteria. In addition, the original model had 12 brand
loyalty influences. This has now been reduced to 9 influences as measure of brand loyalty. In practice this means that fewer criteria
and fewer brand loyalty influences now actually measures brand loyalty better than before. Table 3 shows the rotated (Varimax)
factor table, variance explained and the reliability of the factors.

Table 3: Rotated E%;362&3%8-#&

Factors
1 2 3 4 5 6 7 8 9
C47 .932
C48 .913
C46 .857
C45 .833
C50 .825
C49 .812
C44 .720
C33 .927
C32 .917
C34 .893
C31 .862
C35 .848
C36 .728
C17 .944
C16 .931
C15 .904
C18 .879
C19 .742
C14 .738
C2 .905
C3 .887
C1 .819
C4 .763
C40 .893
C39 .877
C41 .810
C38 .730
C25 .971
C26 .927
C24 .882
C10 .968
C11 .884
C9 .847
C7 .919
C6 .839
C8 .757
C22 .867
C21 .812
C23 .731
% Variance 15.2% 14.7% 13.3% 9.1% 8.7% 8.1% 7.7% 6.9% 6.4%
Cronbach Alpha 0.960 0.972 0.953 0.938 0.961 0.958 0.951 0.948 0.955

The factors all portray favourable reliability coefficients, exceeding the required minimum
Cronbach Alpha coefficients (0.70) with ease). The nine brand loyalty influences extracted by the
factor analysis are labelled as: (1) Culture orientated brand performance; (2) Repeat purchase; (3)
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Relationship proneness ; (4) Customer satisfaction; (5) Brand relevance; (6) Perceived value; (7)
Brand benefits; (8) Switching costs; and (9) Involvement.

Table 4 shows the Pearson correlations between the brand loyalty influences.

Table 4: Factor correlations

F1 F2 F3 F4 F5 F6 F7 F8 F9
F1 Pearson Correlation 1 .395** .371** .299** .533** .300** .188** .234** .436**
Sig. (2-tailed) .000 .000 .000 .000 .000 .000 .000 .000
N 541 541 541 541 541 541 541 541 541
F2 Pearson Correlation .395** 1 .335** .514** .541** .024 .324** .404** .246**
Sig. (2-tailed) .000 .000 .000 .000 .575 .000 .000 .000
N 541 541 541 541 541 541 541 541 541
F3 Pearson Correlation .371** .335** 1 .294** .312** .132** .274** .245** .520**
Sig. (2-tailed) .000 .000 .000 .000 .002 .000 .000 .000
N 541 541 541 541 541 541 541 541 541
F4 Pearson Correlation .299** .514** .294** 1 .397** .063 .304** .505** .202**
Sig. (2-tailed) .000 .000 .000 .000 .142 .000 .000 .000
N 541 541 541 541 541 541 541 541 541
F5 Pearson Correlation .533** .541** .312** .397** 1 .090* .312** .363** .313**
Sig. (2-tailed) .000 .000 .000 .000 .035 .000 .000 .000
N 541 541 541 541 541 541 541 541 541
F6 Pearson Correlation .300** .024 .132** .063 .090* 1 .015 .054 .461**
Sig. (2-tailed) .000 .575 .002 .142 .035 .721 .208 .000
N 541 541 541 541 541 541 541 541 541
F7 Pearson Correlation .188** .324** .274** .304** .312** .015 1 .528** .172**
Sig. (2-tailed) .000 .000 .000 .000 .000 .721 .000 .000
N 541 541 541 541 541 541 541 541 541
F8 Pearson Correlation .234** .404** .245** .505** .363** .054 .528** 1 .209**
Sig. (2-tailed) .000 .000 .000 .000 .000 .208 .000 .000
N 541 541 541 541 541 541 541 541 541
F9 Pearson Correlation .436** .246** .520** .202** .313** .461** .172** .209** 1
Sig. (2-tailed) .000 .000 .000 .000 .000 .000 .000 .000
N 541 541 541 541 541 541 541 541 541
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).

All of the influences are correlated significantly. The strong correlations (>0.50) (Field, 2007:51) are F1 and F5 (0.533), F2 and F4
(0.514); and F4 and F8 (0.505). In practice this means that improvement of one of these influences would have a strong positive
effect on the other influence.

7. CONCLUSIONS AND RECOMMENDATIONS

From the analysis it can be concluded that the model for brand loyalty was simplified. This
simplification also improved the variance explained by 1%, but did so with a reduction of 11
measuring criteria (from 50 to 39). The KMO value also increased showing that the fewer criteria
suits the sample better. The original 12 brand loyalty influences were reduced to nine. In addition,
excellent reliability coefficients were recorded for each brand loyalty influence. The fact that all the
influences are also significantly positively correlated also indicates that brand loyalty should be
addressed as communal construct and that the separate brand loyalty influences should not be
treated in isolation.

Regarding the objectives set for this research, it can positively be concluded that the primary
objective has been achieved. It was possible to significantly simplify the model to measure brand
loyalty.
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