Customer Roles And Loyalty To Products, Brands And Stores


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Customer Roles And Loyalty To Products, Brands And Stores

  1. 1. Customer Roles and Loyalty to products, brands and stores
  2. 2. Brand loyalty <ul><li>Behavioral evidence of brand loyalty </li></ul><ul><ul><li>Consistency of repurchase of brand as measured by: </li></ul></ul><ul><ul><li>proportion of purchase: loyalty as a percentage </li></ul></ul><ul><ul><li>sequence of purchase: undivided versus divided loyalty </li></ul></ul><ul><ul><li>probability of purchase based on history </li></ul></ul><ul><ul><li>Length of time as a loyal buyer </li></ul></ul><ul><li>Attitudinal evidence of brand loyalty </li></ul><ul><ul><li>a greater liking of a particular brand (liking, satisfaction, preference) </li></ul></ul><ul><ul><li>measured through customer rankings, ratings, choice measures </li></ul></ul><ul><ul><li>Measures of performance/importance for brand overall or of specific attributes and benefits associated with the brand </li></ul></ul>
  3. 3. Jacoby’s definition of brand loyalty <ul><li>Brand loyalty is the biased (i.e. non-random) behavioral response (i.e. purchase), expressed over time by some decision-making unit, with respect to one or more alternative brands out of a set of such brands, and is a function of psychological (decision-making, evaluative) processes. </li></ul><ul><li>(Jacob Jacoby, emeritus professor, Purdue University) </li></ul>
  4. 4. Customer loyalty <ul><li>A customer’s commitment to a brand, store or supplier, based on a strong favorable attitude and manifested in consistent repurchase </li></ul><ul><li>Loyalty is evidenced as both a Behavioral and an Attitudinal construct </li></ul>
  5. 5. Loyalty Measurements: Loyalty to a product/brand <ul><li>Please rate the following statements on a 5 point scale from 5 (strongly agree) to 1 (strongly disagree). </li></ul><ul><li>I like this brand very much </li></ul><ul><li>In this product category I have a favorite brand </li></ul><ul><li>When buying X, I always buy my favorite brand, no matter what. </li></ul><ul><li>In the past, almost all of my purchases of (product class) have been of this brand. </li></ul><ul><li>If my favorite brand of (product class) is not available in the store, I would go to another store rather than buy a substitute </li></ul>
  6. 6. Loyalty Measurements: Shopper Proneness to Loyalty <ul><li>Please rate the following statements on a 5 point scale from 5 (strongly agree) to 1 (strongly disagree). </li></ul><ul><li>I generally buy the same brands I have always bought </li></ul><ul><li>Once I have made a choice on which brand to purchase, I am likely to continue to buy it without considering other brands </li></ul><ul><li>Once I get used to a brand, I hate to switch </li></ul><ul><li>If I like a brand, I rarely switch from it just to try something different </li></ul><ul><li>Even though certain products are available in a number of different brands, I always tend to buy the same brand. </li></ul>
  7. 7. Contributors to brand loyalty <ul><li>Perceived brand–performance fit </li></ul><ul><ul><li>meets customers’ needs/wants </li></ul></ul><ul><li>Social and emotional identification </li></ul><ul><ul><li>social images acquired through marketing </li></ul></ul><ul><ul><li>customers identify selves with brands </li></ul></ul><ul><li>Habit and history </li></ul><ul><ul><li>customers acquire preferences through repeated use </li></ul></ul><ul><ul><li>customers become familiar/comfortable with brand </li></ul></ul>
  8. 8. Detractors from loyalty: Attraction of Alternatives <ul><li>Market factors </li></ul><ul><ul><li>brand parity: how similar and mutually substitutable the brands are </li></ul></ul><ul><ul><li>competitive promotional activity: special price deals available on competing brands </li></ul></ul><ul><li>Customer factors </li></ul><ul><ul><li>variety seeking: customers get bored with the same brands </li></ul></ul><ul><ul><li>product involvement: some products considered trivial </li></ul></ul><ul><ul><li>price sensitivity: negatively related to loyalty </li></ul></ul>
  9. 9. Brand equity <ul><li>Two views </li></ul><ul><ul><li>investors: brand equity is brand valuation </li></ul></ul><ul><ul><li>customers: value of brand to customer compared to other brands </li></ul></ul><ul><li>Brand equity versus brand loyalty </li></ul><ul><ul><li>brand loyalty is consistent repurchase of brand accompanied by a favorable brand attitude </li></ul></ul><ul><ul><li>brand equity is the value of the brand to the buyer and seller </li></ul></ul>
  10. 10. Store choice <ul><li>Planned purchases </li></ul><ul><ul><li>those that customers intended to make before entering the store </li></ul></ul><ul><li>Unplanned purchases </li></ul><ul><ul><li>those that customers did not intend to make before entering the store </li></ul></ul><ul><ul><ul><li>restocking unplanned purchases </li></ul></ul></ul><ul><ul><ul><li>evaluated new unplanned purchases </li></ul></ul></ul><ul><ul><ul><li>impulse purchases </li></ul></ul></ul>
  11. 11. Store choice (cont.) <ul><li>In-store factors </li></ul><ul><ul><li>These include knowledge of the store, time pressures, purchase companions, special store promotions, atmospherics and customer mood. </li></ul></ul><ul><li>Exploratory shopping </li></ul><ul><ul><li>browsing: more likely if customer is familiar with the store </li></ul></ul><ul><li>Atmospherics </li></ul><ul><ul><li>the physical setting of the store </li></ul></ul>
  12. 12. Shopping motives <ul><li>Reasons customers visit stores </li></ul><ul><ul><li>recreation </li></ul></ul><ul><ul><ul><li>shopping is fun! </li></ul></ul></ul><ul><ul><li>socialisation </li></ul></ul><ul><ul><ul><li>social interaction with friends and family </li></ul></ul></ul><ul><ul><li>seeking status </li></ul></ul><ul><ul><ul><li>respect and attention from sales staff </li></ul></ul></ul><ul><ul><li>self-gratification </li></ul></ul><ul><ul><ul><li>rewarding self </li></ul></ul></ul><ul><ul><li>information </li></ul></ul><ul><ul><ul><li>what’s new, what’s in fashion </li></ul></ul></ul>
  13. 13. Customer loyalty to stores <ul><li>The Store Offering </li></ul><ul><ul><li>merchandise quality: brand names stocked </li></ul></ul><ul><ul><li>assortment: number of different items carried </li></ul></ul><ul><ul><li>price value: customers seek low prices </li></ul></ul><ul><li>The Shopping Process </li></ul><ul><ul><li>ease of merchandise selection: layout and design </li></ul></ul><ul><ul><li>in-store credible information and sales assistance </li></ul></ul><ul><ul><li>convenience: ease getting in and out of store </li></ul></ul><ul><ul><li>problem resolution: remedy for mistakes </li></ul></ul><ul><ul><li>personalization: positive employee behavior </li></ul></ul>
  14. 14. One-stop shopping / Super Stores Big Box/Category Killer Stores <ul><li>The practice of acquiring of all related products from one supplier </li></ul><ul><li>Customer motivations for seeking one stop shopping: </li></ul><ul><ul><li>convenience </li></ul></ul><ul><ul><li>cost savings </li></ul></ul><ul><ul><li>integrated products </li></ul></ul><ul><li>Risks of one stop shopping: </li></ul><ul><ul><li>lower risk selecting a single supplier </li></ul></ul><ul><ul><li>Walmart / Kmart superstores for all needs Category Killers (Home Depot, Office Max) for needs within a given product category </li></ul></ul><ul><ul><li>fate tied to single supplier </li></ul></ul>
  15. 15. The Three Customer Roles <ul><li>Customer loyalty to products and stores and the three customer roles </li></ul>. Appeals to shopper Try new stores or new products/brands . Shopper role dominates when price sensitive . . . . . User Indifference . May seek variety in product/use . Emotion about brand Available Alternatives Brand Parity Competitive Promotions Variety Seeking Product Involvement Price Sensitivity . . Routinized purchase behavior/history Attribute / benefit evaluation Requests purchase User Attribute/benefit evaluation User conditioning to products / sources B. L. Determinants Brand Performance Social/Emotional Habits/History Sales Pattern Loyalty . . Preference / Knowledge . Preferences Brand Loyalty Concept Behavioral Attitudinal Shopper Influencer User Concept
  16. 16. The Three Customer Roles Minimize cognitive effort Seeks economic value Influenced by shopping experience May request if with shopper Seeks new items Unplanned and Impulse Purchases Browsing/Shopping In-Store Promotions Atmospherics Knowledge of store layout Time Pressure Purchase companion Time/Convenience Budget Value May put pressure on shopper . . Specification of brand Store Choice Distance/convenience Price Merchandise Shopper willing to pay more for superior value . . Knowledgeable about product, may specify May specify preferred brand . Most relevant to user User value vs. economic value Users have assurance of quality/value Brand Equity Performance Social Image / Value Trustworthiness Shopper Influencer User Concept
  17. 17. The Three Customer Roles Seek these benefits in a store. These create an enjoyable shopping experience and minimize the effort involved. May focus here when user is also the shopper, especially for hard to solve problems Store Purchase Process Ease of shopping experience In-store assistance Convenience Problem resolution Personalization Shoppers maximize these factors while minimizing cost. These create value in the shopping experience. Little input for nationally branded or commodity/ generic products. May influence store selection for specialty goods Users want quality and value Store Loyalty Merchandise Quality Assortment Price value Store Brands Service Quality Store Image Shopper Influencer User Concept
  18. 18. Key terms <ul><li>Behavioral brand loyalty Restocking unplanned purchases Attitudinal brand loyalty Evaluated new unplanned purchases </li></ul><ul><li>Brand loyalty Impulse purchases </li></ul><ul><li>Customer loyalty Brand parity </li></ul><ul><li>Attraction of alternatives Competitive promotional </li></ul><ul><li>Exploratory shopping activity Atmospherics </li></ul><ul><li>Brand valuation Store visiting </li></ul><ul><li>Brand equity Shopping motives </li></ul><ul><li>Planned purchases Store loyalty </li></ul><ul><li>Unplanned purchases Assortment </li></ul><ul><li>One-stop shopping </li></ul>