This document presents a research paper on components of brand credibility that drive consumer loyalty in the garment industry. The paper aims to identify key determinants and consequences of brand credibility specifically for the garment industry. A literature review is presented on topics like word-of-mouth, customer satisfaction, brand, brand value, brand innovativeness, and their relationship to brand credibility and consumer loyalty. The paper describes the research methodology used, including a sample survey of 100 customers of major garment showrooms. Preliminary results indicate that Reliance Trends is the most top-of-mind brand for respondents when thinking of clothes.
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BRM project work - FINAL.docx
1. VIT – Business School, Chennai
BUSINESS RESEARCH METHOD
RESEARCH PAPER
ON THE TOPIC
COMPONENTS OF BRAND CREDIBILITY THAT DRIVE
CONSUMER LOYALTY
DONE BY
POOJASHREE - 22MBA1134
ROHINI R - 22MBA1092
SHAHISNA - 22MBA1094
THANIGAI R - 22MBA1106
2. COMPONENTS OF BRAND CREDIBILITY THAT DRIVE
CONSUMER LOYALTY
ABSTRACT:
PURPOSE – The purpose of this paper is to present the components of brand credibility that
drive consumer loyalty that intends to identify the determinants and consequences specifically
in the garments industry.
DESIGN/METHODOLOGY/APPROACH
Sample size – It would be approximately 100 after completing a self-administered online
survey, participants will provide input on the top genuine global brands.
Sample population - Customers of garment showroom
Sample area - Lifestyle, Max, Pantaloons, Reliance Trends, Zudio. This feedback will be used
to construct the study's hypotheses.
Sampling method - The research was concluded by the survey accordance to the quantitative
approach through random sampling method.
FINDINGS- Brand credibility is the main source to overcome negative word of mouth and
retain customers for their products. We conclude that credible brand provides more advantages
to customers and trust is the key component to have loyal customers.
RESEARCH LIMITATION – Due to the limitation of time the research could not be made
more detailed. Due to confidentiality of some information accurate response was not revealed
by some of the respondents. Respondent would answer the question in a biased manner
irrespective of the actual feeling.
ORIGINALITY –This study contributes to the literature by proposing and testing the key role
of brand credibility in consumer choice of brand versus customer loyalty in an existing market.
KEYWORDS - Brand credibility, Garment industry, Perceived quality, Consumer Loyalty,
Brand trust, brand image, apparel.
3. INTRODUCTION
The garment industry plays an important role in the economic growth of both developed and
developing nations (Ministry of Trade and Industry [MTI], 2020). This industry is recognised
as one of the oldest, largest, and most advanced export sectors in the world (World Bank, 2014).
The purpose of this study, apparel brands refer to the brands that are owned and operated by
retailers themselves and will thus be the focal point of this study. As a result, this creates an
opportunity for customers to engage in switching behaviour, thus stifling competition among
the players in the industry (MTI, 2020). This behaviour results in customers insisting on lower
prices, higher-quality products, and consistent service delivery, making it more difficult for
apparel brands to retain a loyal customer base (MTI, 2020).
Brand helps destinations build and communicate a unique identity that differentiates
them from competitors, attracts visitors and fosters loyalty (Morgan and Pritchard, 2004;
Sultana et al. 2018). Brand credibility is especially important in an environment where
consumer uncertainty arises due to the asymmetry of available information, as
organizations and businesses have more information to evaluate products than
consumers do. (Rieh and Danielson, 2007). In this environment, according
to signalling theory, brands play an important role in how consumers evaluate product
information (such as attributes) and make choices (Erdem et al., 2002).
Managing customer churn and revenue is a top priority for executives in service industries
such as retail banking and telecom. In marketing, it is generally accepted
that acquiring new customers is a much more expensive endeavour than building broader and
deeper relationships with existing customers (Rust et al., 1995). The underlying logic of brand
credibility is to increase a brand’s visibility and recognition in the minds of customers (Huang
& Sarigollu, 2014). The development of brand credibility forges a stronger bond with
customers and decreases price sensitivity, leading to the promotion of brand image (Tran et
al., 2019).
Increased brand awareness creates stronger bonds with customers, reduces price
sensitivity, and promotes brand image (Tran et al., 2019). In particular, improving brand
awareness and brand image helps create symbolic meaning, highlight a company's product
attributes and benefits, and build brand trust (Chinomona, 2016; Das, 2016). Brand trust also
creates long-term relationships by reducing fear of uncertainty and opportunism,
further helping to maintain customer loyalty (Bennur & Jin, 2017)
4. To achieve this, the study proposes a valid and reliable parsimonious model that illustrates the
determinants of brand credibility and further explores the moderating role of brand
commitment on the relationship between brand trust and customer loyalty. In terms of practical
significance, the study provides guidelines and strategies for how apparel brands can
implement brand credibility to strengthen brand image, leading to enhanced brand trust and, in
turn, promoting a higher level of customer loyalty.
This paper starts by examining the existing literature on Brand credibility. Next, the
methodology is explained, followed by presentation of the findings and the discussion. Finally,
the paper’s limitations and contributions, and avenues for possible further study are given.
LITERATURE REVIEW
WORD OF MOUTH
Word of mouth from consumers. Consumers look for information before purchasing to reduce
the perceived risk. One of these sources of external information is WOM from friends and
family (Money, 2004). Westbrook (1987) defines WOM as informal consumer communication
addressed to other (potential) consumers about the possession, use or characteristics of certain
goods, services or brands. Satisfied consumers have a positive opinion about the brand and are
more committed to repeat purchases and look forward to sharing their experience with other
consumers (Carroll and Ahuvia, 2006).WOM is thus communication that extends beyond the
company, it originates in the external environment and it is natural and specific to consumers,
being characterized by higher credibility levels (Gremler and Brown, 1999).According to
Ghorban and Tahernejad (2012), WOM can produce two completely antagonistic effects on
the consumer, depending on the general type: positive or negative. Positive WOM has the
ability to foster positive consumer decision-making, whereas negative WOM can be considered
as producing a discouraging effect when choosing a brand. Alam and Yasin (2010) and El-Baz
et al. (2018) report that WOM is one of the elements that contribute to increasing brand
confidence the most. A trusted brand is a credible brand, with a strong relationship between
the WOM and the credibility of the brand (Ghorban and Tahernejad, 2012). Thus, we anticipate
the following hypothesis:
H1: WOM from consumers will positively impact brand credibility
5. CUSTOMER SATISFACTION
Customer satisfaction is the principal variable that is related to customer loyalty, since several
authors’ state that satisfied customers tend to remain loyal to a firm or brand (Zhang ey
al.2012). Customer satisfaction is defined as the positive evaluation of the consumption
experience (Anderson et al. 2004), which derives by the difference between the prior
expectations and the perceptions after consumption (Tu et al. 2012). Research found that
positive brand experiences increased consumer trust, satisfaction and love toward
brands, which significantly strengthened consumer brand loyalty (Khan et al., 2016; Khan and
Fatma, 2017; Huang, 2017; Ferreira et al., 2019).Satisfaction enhances commitment because
satisfied customers are more favourable to continue the relationship (Ranaweera and Menon
2013; Jeong and Oh 2017), enjoying benefits like reduced search cost and lower perceived risks
(Hess and Story 2005).The perceived value, in addition to increase customer satisfaction,
encourages the consumers’ repurchases (Han et al. 2011), promotes re-patronage intentions,
and discourages switching behaviors (Wathne et al. 2001), thus improving customer loyalty
(Nguyen et al. 2018).
H2: Customer Satisfaction will positively impact brand credibility
BRAND
Brand acquires great importance in improving customer loyalty through the effective
management of the brand awareness and brand image (Han et.al.2008). Brands offer unique
identity benefits to customers: they are uniquely viewed by customers as extensions of self and
a source of positive self-concept, which leads customers to have affinities with these brands
(Keller 2012). Brands are market-based assets that provide firms with valuable resources in
managing external relationships (Srivastava, Shervani, & Fahey, 1998). Brands also play on
psychological aspects or symbolic structures in users' minds on the basis of which future
expectations about their operation will be generated. This is difficult to measure and capture
objectively (Feiz and Moradi, 2019; Khamitov et al., 2020).
BRAND VALUE
Brand value consists of two key elements: brand essence and brand strategic positioning.
The essence of a brand represents the core of its identity (Upshaw (1995). Brand equity
consists of two key elements: the essence of the brand or the strategic positioning of the brand.
The essence of a brand is the core of its identity. It represents the core (Upshaw
6. (1995). Brand value end customers are the joint result of manufacturer and retailer decision-
making (Anderson & Narus, 1999). Brand equity is the result of brand equity manifesting
in brand preferences. That's what customers do. It is operational at his three levels
of brand level where accounting standards are applied (Simon and Sullivan, 1993).
Brand equity comes from the relationship between customers and brands. In other words,
brand equity derives from both how consumers think and behave (Bick, 2009). Brand equity is
best represented by a premium (or discount) price compared to competing brands. The
manufacturing chain of relative brand value, relative brand value, and relative brand
competitiveness presents a very different perspective from traditional frameworks (Yang,
2015). Yang, 2015).
H3: Brand value will have positive impact on brand credibility
BRAND INNOVATIVENESS
Brand innovation is defined as “consumer perceptions of a brand's track record of
product innovation, level of creativity, and potential for continued innovation activity in the
future in a given market'' (Shams et al., 2015). Innovative brands
need to engage with their target market. A brand may be perceived as innovative by
one consumer group but not associated with innovation by another target market. Brand
credibility, which includes credibility and expertise, is the degree to which consumers
believe the brand claims and their perception of the brand's ability to deliver what it
promises (Erdem & Swait, 2004). Brand innovation involves recognizing creativity.
Creativity surprises and fascinates consumers, thus creating excitement and providing
new opportunities for interaction with consumer brands. Consumers feel comfortable with the
brand and derive hedonic value from that feeling (Kunz et al. 2011). Positive emotions
arising from interactions between consumers and brands predict future
brand purchase intentions (Gountas & Gountas, 2007; Sweeney & Soutar, 2001) and have
a greater impact on intentions and behaviour than just perceptions. (Batra & Homer, 2004). ).
Therefore, it is expected that the more innovative the brand, the higher the willingness to
purchase. Thus, we anticipate the following hypothesis:
H4: Brand innovativeness will positively impact brand credibility.
7. BRAND CREDIBILITY
Brands can serve as credible signals to influence consumers’ interpretations and actions
through prior marketing communication strategies (Duncan and Moriarty 1998).It helps
consumer to identify the product. Brand credibility as an antecedent or consequence in a series
of consumer responses. In marketing and consumer behaviour, brand credibility was found to
be an important predictor for purchase intentions (e.g. Tae et al. 2010) and attitudes towards
the product, ad, or service provider (e.g. Lutz et al. 1983).A low level or complete lack of brand
credibility lowers consumer perceptions of quality and purchase intent, while a highly credible
and positive source boosts brand image and brand value. It has been found to increase purchase
intent (eg Goldsmith et al. 2000).Place brands thereby not only identify and differentiate
destinations from each other, they also convey a memorable experience uniquely associated
with the setting and reinforce the collection of pleasurable memories (Tung and Ritchie 2011).
As signal bearers, destination management organizations retain sensitive brand information
and reduce consumer uncertainty by using a wide range of marketing mix elements and
communication channels (e.g., written, personal, digital, non-verbal or symbolic
communications) (Karanges et al. 2018). Thus, we anticipate the following hypothesis:
H5: Brand credibility positively affects consumer’s loyalty
CUSTOMER LOYALTY
Customer loyalty refers to positive attitudes of customers toward a company or brand that result
in repeated repurchasing behaviors and in a lower customer sensitivity to the price and the
offerings of competitors (Anderson and Srinivasan 2003). Consumer loyalty is described as a
consumer’s behavioural intentions and assessments of the likelihood of buying a brand (Busser
and Shulga, 2019). Loyal customers are more profitable than a new one, since they spend more
with the firm and have lower servicing costs (Richard and Zhang 2012). Hence, managing and
enhancing customer loyalty becomes a strategic imperative for firms. Brand acquires great
importance in improving customer loyalty through the effective management of the brand
awareness and brand image (Han et al. 2008). The emotional attachment towards a brand
creates affective commitment that encourages consumers to constantly rely on a specific
brand’s offering (Gustafson et al. 2005; Lee et al. 2007), repurchase the same brand, spread
good words, and not visit competitor’s stores (Han et al. 2018). Thus, we anticipate the
following hypothesis:
H6: Brand credibility positively affects consumer’s loyalty
8. MODEL
WOM is one of the element that contribute to increasing brand confidence the most. A trusted
brand is a credible brand with a strong relationship between WOM and the credibility of the
brand. Brand innovativeness can provide credible marketplace signals and consumers may
build brand trustworthiness and expertise associations based on innovation cues of these
brands. Personal interaction quality affects customer satisfaction and customer satisfaction
influences customer loyalty. Brand value captures what a brand “means” to a firm, brand equity
drives brand value via consumer utility and our model allows competitiveness estimations. All
these factors positively influence brand credibility and this in return leads to customer loyalty.
As a result, this study investigates brand credibility with customer loyalty with
multidimensional constraints (WOM, brand value, brand innovativeness, customer
satisfaction) in brand perspectives.
WOM
Customer
satisfaction
Brand
innovativene
ss
BRAND
CREDIBILITY
CUSTOMER
LOYALTY
9. RESEARCH METHODOLOGY:
STUDY CONTEXT
India is well placed to study the global brand-buying phenomenon. With promising growth
trends, India is seen as a lucrative investment destination for multinational companies. Rising
income levels in the country have significantly changed living standards, creating opportunities
for both domestic and multinational companies. These evolving trends are creating promising
economic opportunities for global and domestic brands. Therefore, the study highlights the
importance of brand authenticity and its driving force in explaining purchase intent to global
and domestic brands in the context of India.
EXPERIMENTAL DESIGN
Hypothesized relationships were checked using a field experiment design. Participants were
selected from major cities of Chennai using random sampling technique, and asked to fill the
questionnaires. Respondents were mostly literate people and belonged to different age
groups. They were directed about the contents of the questionnaire and its relative
significance. The questionnaire were collected through online Google forms. 96 surveys were
returned out of the distributed 100 questionnaires.
DEMOGRAPHIC CHARACTERISTICS OF THE RESPONDENTS
All the respondents were aged 18 and above. The average age of the respondents was 18-
25years. About 75 percent of the respondents were male whereas 25 percent of them were
female. About 63 percent single and 47 percent married people contributed to the survey. In
income category 80 percent were students with less than 20,000 income and rest 20 percent
was mixed of 20000 to 1,00000 income.
BRAND SELECTION
Garments was chosen as the brand of study. This was done specifically to examine the impact
of consumer orientation on brand credibility. Fabric also provides a broad set of
data for investigation, as the majority of people are aware of the problem/choice and can be
involved in designing experiments. Respondents were given a list of the top brands traded in
Chennai (Pantaloons, Max, Lifestyle, Zudio, Reliance Trends, etc.). Respondents had
to complete the entire survey, taking into account the brands mentioned.
10. RESULT:
WHEN YOU THINK OF CLOTHES WHAT BRAND COMES TO YOUR MIND
As we can see with the responses received, it is inferred that majority of 27.7% of the people
chose reliance trends, 21.4% max and Zudio, 20.5% of them Lifestyle and 8.9% of people
pantaloons.. Every brand has a uniqueness of their own but Reliance Trends is the brand that
is opted by majority of people.
HOW OFTEN DO YOU PURCHASE CLOTHES
As we can see with the responses received, it is inferred that majority of 45.5% of people
purchase clothes once in three months,25% of people purchase once per month,15.2% of
people purchase once in six months,8.9% of people purchase several times per month and
none once per year. It is based on many factors that a person will decide the frequency of
purchase of their clothes and when they purchase it will be from their favourite brand.
Frequent visit to the brand increases the brand credibility.
HOW MUCH DO YOU SPEND ON CLOTHING PER YEAR
11. As we can see with the responses received, it is inferred that majority of 53.6% of people
spend less than Rs.10,000 on purchase of clothes, 25% between Rs.10,000 – Rs.20,000,
16.1% between Rs.20,000 – Rs.30,000 and none between Rs.30,000 – Rs.40,000 more. It is
based on many factors that a person will decide the frequency to spend on the purchase of
their clothes and when they purchase it will be from their favourite brand.
BRAND CREDIBILITY
WHICH OF THE FOLLOWING THINGS WOULD MAKE YOU LOYAL TO A BRAND
As we can see with the responses received, it is inferred that majority of 74.1% of people
chose Quality and 11.6% of people price to be loyal to a brand. Other factors like satisfying
customer service, offers and brand value minimal role. A product of brand should be worth to
the price that their customers pay. By which the brand gains satisfied customer and make
them purchase again.
12. ON A SCALE FROM 1 TO 5: HOW WAS YOUR EXPERIENCE WITH THE BRAND
As we can see with the responses received, it is inferred that majority of 74% of people chose
scale 4 for rating their experience with their favourite brand. Other scales are opted due to
many factors like unsatisfied service, price and quality. Only 18% of people has opted scale 5
which has satisfied all their wants.
HOW FAMILIAR ARE YOU WITH THE BRAND
The customers are moderately familiar with the brand, this indicate that the brands are well
known to the customers and they are in frequent contact with the brands. This increases
brand credibility.
CUSTOMER LOYALTY
HOW LIKELY ARE YOU TO EXPAND THE USE OF PRODUCT OR SERVICE
13. As we can see with the responses received, it is inferred that majority of 42.9 % of people
sometimes expand the use of product or service, 30.4% of them often and 21%
occasionally. It can be due to many factors and may vary individually.
HOW LIKELY ARE YOU TO PATRONIZE YOUR FAVORITE BRAND
As we can see with the responses received, it is inferred that majority of 51.8% of people
chose sometimes,25.9% of people often and 16.1% of them rarely. Patronize means to be a
regular customer. If a customer is patronize to a brand then they are considered as loyal.
HOW RELIABLE IS THE BRAND WHICH YOU PREFER
14. As we can see with the responses received, it is inferred that majority of 78.6% of people are
satisfied, 11.6% are neither satisfied nor dissatisfied and 9.8% very satisfied. A consumer can
trust his favourite brand only if they are satisfied with their service and results. When their
consumers are satisfied it will automatically make them reliable to the brand and creates loyal
customers.
BRAND INNOVATIVENESS
DO YOU GET ATTRACTED BY THE BRAND ADVERTISEMENT
The customers have neutral opinion towards advertisement and many customers agree that
they get attracted towards advertisement. Good advertisement attracts customers and
increase credibility.
15. DOES YOUR BRAND PROVIDE DISCOUNT OR COUPONS
Brands sometimes provide discount or coupons to attract customers. This makes them to
purchase from the brand frequently. This makes them loyal customers to the brand.
DOES YOUR BRAND LAUNCH NEW DESIGNS AND CREATE MARKET TRENDS ALL
THE TIME
The brand occasionally launch new designs and create market trends. This is done to
attract customers and increase their purchase rate. This in return makes the customers
credible to the brand as they purchased many clothes at a low and reasonable price.
WORD OF MOUTH
HOW LIKELY YOU RECOMMEND YOUR FAVOURITE BRAND TO OTHERS
16. The customers often recommend their brand to their circle or atleast they recommend it
sometimes. This shows that they are satisfied to the brand and they want the brand to
expand. This indicate that the customers are loyal to the brand.
IF THE BRAND SATISFIES MY EXPECTATIONS, THEN I WILL DEFINITELY
RECOMMEND IT TO OTHERS
Majority of the customers agree that if the brand satisfy their expectations, they will
definitely recommend it to others. The brand has to satisfy the customer expectations on
many factors like price, quality, brand value. This makes them to have a good relationship
with the brand.
HOW OFTEN DO YOU HEAR PEOPLE TALKING ABOUT OUR BRAND
17. Occasionally customers hear people talking about the brand and this when it is
communicated positively, it makes them stay loyal to the brand.
CUSTOMER LOYALTY
HOW LONG HAVE YOU BEEN USING THE SAME BRAND
The customers are using the brand for a longer period of time. Majority are between 1year-
5years gap. It is assured that when their needs are satisfied they purchase from the same
brand again.
HOW LIKELY ARE YOU TO SWITCH TO COMPETITOR BRAND
18. Many customers switch to the competitors brand sometimes when they feel that their
expectations are satisfied by the other brands they switch to it. The brand have to fulfil
their expectation and satisfy them to make them stay loyal to the brand.
DO YOU STAY LOYAL TO THE BRAND EVEN IF THE PRICE INCREASED
Many customers are neutral towards staying towards the same brand even when the price
increases. Other factors also determine customers continuing in the same brand. This is
important to make customers loyal to a brand.
19. CONCLUSION:
This research was aimed at understanding the role of trustworthiness and customers in the
augmentation of brand credibility and customer loyalty. Positive and highly significant
correlation between trustworthiness and brand credibility indicates that highly trusted brands
enhance their credibility in the eyes of the customers. This provides a guideline for the brand
managers in the sense that they should adopt strategies that can build onto their
trustworthiness. Advertisements and policies must incorporate true perceptions and image of
the product, thereby augmenting the brand's credibility. Brand credibility was observed to
have a significant positive relationship with customer loyalty. Also, brand credibility
mediates the relationship between innovation, satisfaction and customer loyalty. This
validates the argument that trustworthiness and higher perceived quality of the brand lead to
the credibility of brand, which enhances the customer loyalty. This study confirms our
hypothesized relationship between the variables that brand credibility mediates the
relationships between credibility – customer loyalty. We find sufficient evidence that brand
credibility mediates the relationship of customer loyalty with trustworthiness, perceived
quality and loyalty.
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