consumer loyalty- types, status, circle, purchase intentions-internal external factors,intervening factors, switching behaviour- basis, reasons, prevention of switching

1. RADHIKA GANDOTRA(45-MBA-16)
TUSHAR GUPTA (65-MBA-16)
VIDHU ARORA (68-MBA-16)

2. Contents
1. Introduction
2. Types of loyalty
3. Loyalty status
4. Loyalty circle
5. Purchase intentions
6. External & Internal Factors
7. Intervening Factors
8. Switching Behavior
9. Basis for switching behavior
10. Reasons behind Brand Switching
11. Preventing Brand Switching

3. CUSTOMER LOYALTY
 Customer loyalty is both attitudinal and
behavioral tendency to favor one brand over
all others, whether due to satisfaction with the
product and services, its convenience or
performance, or simply familiarity and comfort
with the brand.
 It is a deeply held commitment to re-buy
product or services.

4. TYPES OF LOYALTY
 There are four traditional types of loyalty that how
loyal a consumer is to a brand:

5.  No Loyalty:
o group of customers that is not loyal to brands.
Businesses should avoid targeting no-loyalty buyers
because they will never be loyal customers; they add
little to the financial strength of the business.
 Inertia Loyalty:
o This customer buys out of habit. It’s the “because we’ve
always used it” or “because it’s convenient” type of
purchase. This buyer feels some degree of satisfaction
with the company, or at least no real dissatisfaction.
eg : local departmental stores or drycleaner

6.  Latent Loyalty:
o A high relative attitude combined with low repeat
purchase signifies latent loyalty. This type of loyalty refers
to consumers who might not purchase often from a brand
but when they do purchase, they always purchase from
the one brand.
 Premium Loyalty:
o premium loyalty, the most leverageable of the four types,
prevails when a high level of attachment and repeat
purchase. This is the preferred type of loyalty for all
customers of any business.

7.  Today’s consumer demands more from the brands they
love, and as marketers, it’s our job to give it to
them. There is a better type of loyalty that brands
should be looking to increase, which is called
“Reciprocal Loyalty.”

8.  Reciprocal Loyalty:
o It creates a relationship where consumers support
brands through advocacy, purchase behavior, and
community participation.
o As a result, brands then appreciate consumers through
investing in their experiences, providing valuable
content and thanking consumer with rewards and
benefits.

9. LOYALTY STATUS
 Marketers usually four groups based
on brand loyalty status:
o Hard-Core Loyal: consumers who buy only one
brand all the time,
o Split Loyal: consumers who are loyal to two or
three brands,
o Shifting Loyal: consumers who shift loyalty from
one brand to another,
o Switchers: consumers who show
no loyalty towards brand.

10. LOYALTY CIRCLE

12. • The willingness of a customer to buy a
certain product or a certain service in a near
future.
• Linked with the consumer’s attitude, perception and
buying behavior.
• It is a dependent variable that depends on
several external and internal factors.
PURCHASE INTENTIONS

14. Will you buy a Mercedes-Benz automobile
during the next 12 months?
Where 1 – No chance
5 - I definitely will
Purchase intentions represents what
consumers think they will buy
1 2 3 4 5

15. Purchase intention
Attitude of
others
Unanticipated
situational
factors
Purchase
decision
Intervening Factors

16. ATTITUDE OF OTHERS
The person’s attitude influence purchases because
of 2reasons :
1. The intensity of other person’s negative attitude
2. Consumer’s motivation to follow other person’s wishes

17. Example : Suppose Ram’s wife feels strongly that Ram
should buy the lowest-priced computer to keep down
expenses.

18. AS A RESULT
Ram’s “purchase probability” for
other computers will get
reduced.

19. “It can affect consumer’s decision to modify, to
postpone or avoid purchase decisions.
• Changes in income, change of priority eg.
Sudden payment of educational fees etc
UNANTICIPATED SITUATIONAL
FACTORS

20. Some other Purchase
might become more
urgent

21. UNANTICIPATED SITUATIONAL FACTORS
• Heavily influenced by
Perceived risk.
Marketer must understand the factors that
provoke a feeling of risk in consumers and
provide information and support that will reduce
the perceived risk.

22. Serve first, sell second
Aggressively seek out customer
complaints
Get and stay responsive
Win back lost consumers.
Use multiple channels to serve the
customers well
So what Marketers can do?

23. HERO HONDA
created a memorable
campaign with its “fill
it, shut it, forget it”
to highlight its
effective mileage.
Activa ( scooter) launched a
campaign on its mileage and
features.

24. Switching Behaviour
• Consumer-switching behaviour refers to
customers abandoning a product or service in
favour of a competitor's.
• For example, a customer might move funds
from one bank to another if he is dissatisfied
with the customer service at the first.

25. Definition
• Consumer-switching behaviour is an ever-
present danger for a business -- if you don’t
keep your customers happy, your competitors
might directly get benefit.
• Brand switching—as opposed to brand
loyalty is the outcome of customer switching
behaviour.

26. Study by AMA:
• According to estimates made by American
marketing Association it takes 4 times more
expenditure to get a new customer then
retaining a potential customer.

27. Basis of Brand Switching:
• Brand switching can happen for five reasons,
but mainly based on price considerations. The
overall global averages are:
Better Price (41%)
Better Quality (26%)
Better Service Agreement (15%)
Better Selection (10%)
Better Features (8%)

28. Reasons behind Brand Switching
• Product quality .
• Unavailability of product.
• Offers and uniqueness in other brands.
• Price escalation or hike also leads to brand.
• Low research and development which not
provide innovation in product quality and
standards.

29. • Inconsistent Brand positioning of the product
and brand.
• Customer did not possess the desired
satisfaction level which changes his attention
towards alternatives available in the market
• Kleptomaniac customers who just Wish to
taste and consume every kind of product and
utility possession.
Reasons behind Brand Switching

30. • Advertisements by Competitors.
• Boredom: Consumers might leave just for the
sake of variety.
• Role of Celebrity.
Reasons behind Brand Switching

31. How to prevent Brand Switching?
• Considerations:
– Prevent consumer switching by soliciting feedback
and continually optimizing your customer service.
– You can’t please everybody, but making the effort
can go a long way.
– If your customers sense that you are out for their
best interests, brand loyalty will develop, and your
business will be less threatened by consumer-
switching behavior.

32. BIBLIOGRAPHY
• www.drivingretention.com
• www.google.com
• www.brandkeys.com
• www.marketingpower.com
• Marketing Management- PHILIP KOTLER