Brand Loyalty

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What is Brand Loyalty? Meaning.

Brand Loyalty (BL) is the situation when a consumer is reluctant to switch from buying and consuming the product from the brand he knows and trusts. It is part of a firm's Relational Capital.

It consists of a consumer's commitment or preference to repurchase the brand and can be demonstrated by repeated buying of the product or service or other positive behaviors such as word of mouth advocacy. It is more than simple repurchasing behavior, since customers may repurchase a brand also due to:

• Situational constraints.

• A lack of viable alternatives.

• Out of convenience.

Such loyalty is then referred to as "Spurious Loyalty".

Factors Leading to Brand Loyalty

Studies have been conducted how BL is created or what factors determine BL. The most common mentioned antecedents to BL are the following:

1. Satisfaction (brand reputation): BL is often seen as a way for consumer to show that they are satisfied with certain goods and services.

2. Perceived Quality: This is the perception that customers have about the ability of certain goods to satisfy their needs and wants. In other words, it is about a customer’s perception about the quality a certain product has with regard to its intended purpose. Perceived quality is a factor often seen as indirectly affecting BL through overall satisfaction.

3. Brand Trust: Although the relationship between brand trust and BL is difficult to analyze because brand trust measurements are lacking, several studies have found that brand trust creates positive attitudes towards brands which in turn causes increased commitment and BL. Furthermore, brand trust might also lead to an increased desire to create a long-term relation with a brand.

3 reasons why Brand Loyalty is important:

1. Higher sales volume. Through reducing customer loss.

2. Premium pricing ability. As loyal consumers are less sensitive to price changes, generally, they are willing to pay more for their preferred brand.

3. Lower costs for advertising, marketing and distribution. Brand loyalists are willing to search for their favorite brand and are less sensitive to competitive promotions.

Brand Switching can be defined as the process of moving loyalty from one brand of a certain type of product/service to another brand by the customer, due to dissatisfaction, inconvenience, or other problems.

Source: Delgado-Ballester, E. And J.L. Munuera-Alemán (2001) “Brand trust in the context of consumer loyalty” European Journal of Marketing Vol. 35 Iss. 11/12 pp 1238-1258.

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