Multiple Ways of Measuring Brand Loyalty

Purpose – This article aims to estimate the relationship between brand loyalty and price promotions on the German yoghurt market. It considers consumer loyalty to various corporate brands and their respective sub-brands to analyze promotional strategies between and within certain corporate brands with a larger loyal consumer segment and a moderate strength of consumer loyalty are well suited for effective price promotions following the idea of loss leader by Lal and Matutes (1994). Design/methodology/approach – The paper’s approach follows Allender and Richards’ (2012) and extends to explicitly considering the product line management of every manufacturer in the market. In the first step, a random coefficient logit specification is estimated to compute measures of brand loyalty for each brand. In the second step, the relationship between brand loyalty measures and the frequency and depth of price promotions is analysed. Findings – The results suggest that weaker corporate brands are promoted more aggressively supporting the model hypotheses by Koças and Bohlmann (2008). Within the manufacturer’s product line, sub-brands with a larger loyal consumer segment and a moderate strength of consumer loyalty are more often used for effective price promotions which reflects the idea of loss leading first introduced by Lal and Matutes (1994). Research limitations/implications – The results are limited to a static relationship between brand loyalty and price promotions. Analyzing the dynamics of the relationship between brand loyalty and price promotions should prove fruitful in enhancing the understanding of retailer strategies and provides additional implications for managerial decisions in retailing. Practical implications – Managers need to be more aware of the linkages between product line management and promotional strategies. Changes in the product line management may require a redirection of the promotional measures and strategies. Social implications – Consumer behavior with respect to brand loyalty to some extent determines price promotional strategies of retailers. The promotional strategies provide opportunities to save expenditures, especially for non-loyal and low income households. Originality/value – Matching and analyzing two detailed (consumer, retail) scanner data sets to investigate the relationship between the measures of brand loyalty and the retailers’ price promotional strategies. Novel is the modeling of two different dimensions of brand loyalty (size and strength) and the consideration of sub-brands. The results clearly show that promotional strategies vary not only between corporate brands but also between sub-brands of the same corporate brand.

When calibrating a brand choice model cross-sectionally, a measure of brand loyalty is often introduced into the utility function to account for differences in utility across households and over time. One of the most widely used measures of brand loyalty, proposed by Guadagni and Little (1983), is an exponential smoothing model of past choice behavior by the household. In this study, we argue that the exponential smoothing model of brand loyalty cannot properly distinguish between sources of variation in utility due to heterogeneity (across households) and sources of variation due to nonstationarity (within household over time). We introduce a new measure of brand loyalty, derived from a nonstationary Dirichlet-multinomial choice model, in which heterogeneity and nonstationarity are handled distinctly.

The Banking sector in India a very complex and has very deep penetration in the entire country. Over the years due to shift in consumer preferences Indian banking system has strived to improve performance and to render confidence and high customer satisfaction. The customer satisfaction has got many dimensions and varies from person to person in the context of the banking sector. The paper aims at evaluating the role played by customer satisfaction in brand loyalty and brand switching in the Delhi-NCR region for the banking sector based on the aspects, such as, price, branding, service delivery, prompt response and safety transaction. A thorough and comprehendible questionnaire was made, and the data was collected by conducting a survey in order to bring out the essential information from the customers. The sample size of the survey has been 250 people who have been the customers of various banks. The paper is highly relevant in today’s scenario as it talks about and aims at assessing the role of customer satisfaction in brand loyalty and brand switching in Delhi NCR. The study involves two variables - Brand Loyalty and Brand Switching. There is a positive relationship between brand loyalty and customer satisfaction and there is a negative relationship between brand switching and customer satisfaction.

This paper analyzes the persistence of firms’ exporting behavior in a panel of German manufacturing firms using dynamic binary choice models. We distinguish between true and spurious state dependence in exports and apply fixed effects methods that allow us to verify the robustness of our results to critical assumptions on firms’ initial export status. We find robust evidence of state dependence in the current export status of firms. We also document an important role of unobserved permanent firm heterogeneity (spurious state dependence) and quantify the relative importance of different export determinants. Our results, which are consistent with the findings of previous studies on firms in developing countries and in the United States, show the presence of important sunk costs in export market entry and a depreciation of knowledge and experience in export markets.

Keeping It in the Family: Brand Switching between Varieties of a Branded House

The objective of this study is to identify key quality service attributes in the automobile insurance business and determine their influence on brand loyalty. In this study distinction is made between the service during the hiring of the service and the service provided after an accident. In a preliminary exploratory inquiry quality service attributes were identified with the application of in-depth interviews. In an empirical study, hypothesis related to a direct relationship between the attributes and several measures of brand loyalty are contrasted. A sample of n=210 of automobile insurance clients was conformed. Five regression models were developed for the data analysis, one for each loyalty measure. These analyses allowed a specific detection of significant attributes for each case. Though it is concluded that attributes related to the service after the accident have a higher degree of influence on the customer loyalty, it is found that a particular attribute during hiring (reputation of the insurance company) also has an important role.

The theory of reasoned action is applied to reconceptualize brand loyalty. According to the theory of reasoned action, the antecedents of purchase behaviour are attitudes towards the purchase and subjective norm. If the antecedents of purchase behaviour are integrated to predict and measure brand loyalty, the prediction and measurement of brand loyalty will be more stable over time and accurate. This paper aims to integrate three aspects of brand loyalty, and to investigate the relationships among several antecedents of behavioural brand loyalty by introducing the theory of reasoned action. Eight conditions of unit brand loyalty have different levels of brand loyalty shown by the consumers. When attitude, subjective norm and purchase behaviour are all consistent and favourable, the maximum level of unit brand loyalty will be realized.

Over the years, the usage of smartphoneshas burgeoned worldwide. However, it is noteworthy that with this multiplied usage and popularity of smartphones,most of the consumers demonstrateerratic behavior in the selection oftheir preferred brand. Therefore,in order to understand this phenomenon further, this study wasconducted in Pakistan to examine the brand switching behavior of young consumers in the smartphoneindustry.For the purpose of this study, a theoretical framework marks out the relationships between social influence, sales promotion, variety seeking and brand switching. Themethodologyadopted for thisstudy comprised of a quantitative researchdesign,followingapositivistic research paradigm. A sample of 500 young smartphone users from the population of major cities of Pakistan was approached using purposive-sampling method,from which 482 responses were acknowledged. The data was collected via the survey method,following close ended questionnaires. The data was then analyzedby applying the structural equation modeling technique. The research findings filled in theresearch gaps by revealing apositive relationshipbetweensocial influences, variety seekingand sales promotion onbrand switching. However,brand loyalty was found to have a significantunfavorableimpacton these relationships. Brand loyalty weakens the relationship of social influence, variety seeking and salespromotion with brand switching.Hence, the presence of brand loyalty restrictsconsumers from switching theirsmartphone brand due to the influenceof the above mentionedfactors.

In this paper we develop a general class of dynamic brand choice models, called Lightning Bolt (LB) models, which are consistent with the theory of random utility maximization of consumer choice behavior. The underlying random utility process is Markov, and the inter-temporal evolution of the (utility-maximizing) brand choice process is also Markov. The models permit parsimonious parameterizations of the random utility process in brand choices with the resulting switching probabilities being functionally related to explanatory variables. The model allows for structural state dependence (feedback), habit persistence (inertia), and unobserved heterogeneity. The theoretical development shows that several well known stochastic brand choice models can be deduced from random utility maximization theory. From a managerial perspective, the usefulness of the proposed model stems from its ability to separate out the effects of habits, state dependence and heterogeneity. Strong state dependence effects imply incentives for inducing trial of a brand (e.g., product sampling). In contrast with state dependence, a strong habit persistence effect may be indicative of buyer behavior where inducement of trial of a different brand may not be sufficient to maintain a (sustained) defection of the consumer from the habitually purchased brand to the trial brand. Failure to distinguish between these two effects has important implications. For example, a model that only accounts for state dependence effects would, in the presence of only habit persistence, incorrectly attribute it to state dependence. Based on this the manager could decide to embark on an expensive sampling program that might prove ineffective due to the absence of state dependence. It is also important to distinguish between the effects of unobserved heterogeneity and state dependence. In the absence of true state dependence, failing to account for unobservable variations across households (such as differences in price sensitivities), results in the temporally persistent unobservable elements showing up as state dependence in the model. Hence, a manager may incorrectly opt for sampling as the appropriate marketing action, whereas, a couponing or price promotion strategy should have been preferred. We estimate the model parameters using the AC Nielsen household scanner panel data set on catsup purchases. Further, we investigate empirical techniques for overcoming the “initial conditions” problem that affects many dynamic models of brand choice. Through simulation analysis using the estimated parameters, we show that the calculated profitability of a promotion must take into account the multi-period impact due to state dependence. Further, we demonstrate how ignoring heterogeneity can result in spurious state dependence, thereby making marketing tactics such as product sampling appear far more attractive than they actually are. Specifically, the model that accounts only for habit persistence and state dependence effects predicts a share increase of 2.4% points through sampling for one of the brands in the empirical analysis. Once the effects of unobserved heterogeneity are accounted for, however, this number drops precipitously to 0.3%. While even this low number might fulfill the objectives of the brand manager, it ensures that expectations are not eight times that number. It is important to note that this paper is a first attempt at analyzing the three fundamental dimensions of dynamic brand choice behavior. Our formulation represents a “reduced form” approach as opposed to a “structural” approach. Other limitations of the model include our focus on time-invariant choice sets. Extensions of the model to situations where choice sets vary over time are possible, but are difficult. Another limitation is the dependence on multivariate extreme value distributions. An alternative would be to use multivariate normal distributions, i.e., a probit-like structure which has certain useful properties. A comparison of the two approaches would be useful. Empirical extensions of the model to allow for higher-order processes and nested logit type model structures could also be fruitful. Explicitly incorporating variety-seeking behavior in the model would further enrich the theoretical framework proposed in this paper.

In many advanced welfare states, welfare recipients often receive benefits for long periods. This persistence of welfare receipt can be caused by two distinct mechanisms: genuine or spurious state dependence. Knowledge of which of the two mechanisms drives the observed state dependence is important because the policy implications are different. Most of the empirical evidence on state dependence relies on survey data. However, survey data on welfare receipt are subject to substantial measurement error (i.e., misreporting of welfare benefit receipt), which may also bias state dependence estimates. This paper uses rich linked survey and administrative data to measure the effect of misreporting in the survey data on the estimated state dependence in welfare receipt in Germany. We find a rate of underreporting of welfare benefits of 8.6%. Recipients with relatively good labour market chances tend to underreport benefits more frequently. Overreporting benefits is less pronounced with a rate of 1.6%. Within the survey data, we observe more transitions into and out of the welfare system. However, our estimates of state dependence in welfare receipt based on a dynamic random effects model reveal that the effect of misreporting on estimated state dependence is small, even when we distinguish between working and non-working recipients in the model.

Consumers recognize brands by building favorable attitude towards them and through the purchase decision process. Brand preference is understood as a measure of brand loyalty in which a consumer exercises his decision to choose a particular brand in presence of competing brands. This study aims at discussing the cognitive factors that determine brand preference among consumers based on empirical research. Brand attributes including emotions, attitudes, personality, image, reputation, and trust that influence consumer perceptions and temporal association with brands are critically examined in the study. The study reveals that higher brand relevance and brand trust build strong association of consumers with the brand in long-run.

PurposeThe purpose of this paper is to examine the category‐level differences of both risk perception and brand loyalty effects on consumer proneness towards buying private label brands (PLBs).Design/methodology/approachThis paper extends the work of Batra and Sinha by also examining the PLB effects of brand loyalty and price‐quality by product category using a mall‐intercept survey.FindingsThe results indicate that quality variability, price consciousness, price‐quality association and brand loyalty influence consumer proneness to buy PLBs. In addition, income, education and household size are moderators of PLB purchasing.Research limitations/implicationsThis research confirms the importance of price consciousness and quality variability on PLB purchasing. The importance of these determinants depends on both the product category and the PLB market share within the category.Practical implicationsRetailers and manufacturers need to consider the effects of PLB in relation to the product category. For retailers, the value of a PLB is less relevant in some categories but appealing to the price conscious consumer is important. Manufacturers should note in some categories that brand loyalty is important but not as much as price consciousness. Customer income is still an important determinant of PLB purchasing.Originality/valueThe paper shows that it is important to consider product category differences which make it more difficult to generalize about PLB purchasing.

This study attempts to develop the empirical model for measuring brand loyalty in English newspapers. The model has been developed by using factor analysis, multiple regression analysis and the analytical hierarchy process (AHP) model. It describes the results of a survey of 180 respondents in three dominant cities of India. The work focuses on the factors that influence loyalty. The model has been built based on the factors found which influence loyalty. The study also examines the loyalty behaviour of customers, especially from an Indian perspective, and measures the brand loyalty score of three major English newspapers by using the developed model, concluding with suggestions for mounting high loyalty among customers.

This study aims to examine the determinants influencing brand-switching decisions during an economic recession period in the Egyptian emerging market. It investigates the main factors in driving consumer brand switching across all product categories. Quantitative and qualitative techniques were employed to address the literature gap by conceptually and empirically examining the drivers of brand-switching decisions under unstable market conditions and their effect on consumer purchasing behavior. After forming an extensive theoretical review, a conceptual model was developed and tested through the use of 281 collected questionnaires and supported by 13 in-depth personal interviews with Egyptian consumers to gain in-depth explanations for the results. The data was analyzed through the use of rank order question (ordinal scale), assignment problem, and Hotelling’s T-square test by using SPSS V.27 and Management Sciences Package software. The results revealed that price is the most influential determinant of brand switching across all product categories during economic distress. Furthermore, practical implications for marketers and business managers are provided, offering strategic recommendations to help in navigating through economic downturns and preserve competitive advantage in the market. These insights are crucial for crafting adaptive marketing strategies that retain existing consumers and attract new consumers to minimize the impact of economic challenges on brands’ performance.

PurposeThis study seeks to examine whether or not the effect of personal cultural orientation on brand‐related consumer behaviors functions invariably at the individual level in two culturally opposite countries (South Korea and the USA).Design/methodology/approachData were collected from college students from South Korea and the USA. A total of 415 eligible questionnaires were collected: 212 South Korea and 203 USA. Data analysis was conducted using Multivariate analysis of variance.FindingsIt was found that personal collectivistic orientation had a significant effect on both brand loyalty and equity among both Americans and Koreans. Brand loyalty was higher among people of high collectivism than those of low collectivism across brands in both the US and South Korean samples. Likewise, brand equity was also higher among people of high collectivism than those of low collectivism across brands in both countries. These findings indicated that regardless of their national culture, collectivist consumers would show higher brand loyalty and equity than individualist consumers.Research limitations/implicationsOne limitation was that only one product category was examined in only two countries. Future research will need the validate the findings by including more product categories across more countries. In addition, other types of personal cultural orientation need to be investigated.Originality/valueOne major contribution of the study is that it examines the personal cultural orientation, not stereotyping consumers by their country or subculture membership. The other contribution is that the effect of personal collectivistic orientation holds regardless of country‐level culture.