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Report on Impact of Brand Image on Customer Loyalty.
1. IMPACT OF BRAND IMAGE ON
CUSTOMER LOYALTY
by
Siddharth Bhatnagar
2. i
EXECUTIVE SUMMARY
The Purpose of the study was to investigate the effect of brand image benefit on customer
satisfaction and Loyalty intention directly and indirectly based upon different analytical tools
and methods. The measures were reconstructed and re-standardized to make it suitable for the
purpose of the study. Numbers of factors were identified through chi square technique. The
results of chi-square analyses through SPSS method revealed that there is a strong positive
relationship between brand image and loyalty intention, While, the relationship between
customer satisfaction and loyalty intention was found to be less weak. This indicates that
there might be a mediation effect of customer satisfaction between brand image and loyalty
intention. A mediating effect of customer satisfaction was found between Brand Image and
Loyalty Intention. A survey was carried out on 111 respondents which comprised of 67 male
respondents and 44 female respondents. Though the percentage of male respondents was
higher, being 60.3% while females being 39.6%, it was deduced that gender does not have
any impact on customer loyalty or brand image. The results also indicated that overall
satisfaction does influence customers' loyalty which implies that marketers should focus on
brand image benefits to achieve customer loyalty.
3. ii
CONTENTS
Particulars Page No.
Disclaimer i
Declaration ii
Acknowledgement iii
Executive Summary iv
List of Tables & Figures vi
Chapter-1: Introduction 1
1.1 Research Question 2
1.2 Investigative Questions 2
1.3 Research Objective 2
1.4 Hypothesis 2
1.5 Limitations 3
Chapter-2: Literature Review 4
Chapter-3: Research Methodology 6
3.1 Method 6
3.1.1 Data 6
3.1.2 Reasoning 6
3.1.3 Research Tools 7
3.2 Sampling Design 7
3.3 Sample Size Calculations 7
3.3 Questionnaire Design 8
Chapter-4: Data Analysis & Interpretation 9
4.1 Demographic Presentation 9
4.2 Hypothesis Testing 15
4.3 Findings 17
Chapter-5: Conclusion 19
References 20
Appendix A 21
Appendix B 22
4. iii
LIST OF TABLES & FIGURES
Table/Figure Number and Name Page Number
Table 2.1: Important findings of Literature Review 5
Table 4.2.1: Null Hypothesis Test for the Impact of Brand Image 15
on Customer Loyalty to Gender.
Table 4.2.2: Null Hypothesis Test for the Impact of Brand Image 15
on Customer Loyalty to Age.
Table 4.2.3: Null Hypothesis Test for the Impact of Brand Image 15
on Customer Loyalty to Monthly Income.
Fig. 4.1.1: Gender 9
Fig. 4.1.2: Age Groups 10
Fig. 4.1.3: Monthly Income 10
Fig. 4.1.4: Brand Favourability to Customer Loyalty. 11
Fig. 4.1.5: Brand Ambassador Endorsement to Customer Loyalty. 11
Fig. 4.1.6: Attractive Packaging / Delivery to Customer Loyalty. 12
Fig. 4.1.7: Brand Strength to Customer Loyalty. 12
Fig. 4.1.8: Variety of offerings to Customer Loyalty. 13
Fig. 4.1.9: After sales service to Customer Loyalty. 13
Fig. 4.1.10: Brand Uniqueness to Customer Loyalty. 14
Fig. 4.1.11: Unique Offerings to Customer Loyalty. 14
Fig. 4.1.12: Unique Experiences to Customer Loyalty. 14
5. 1
Chapter-1
INTRODUCTION
There have been a reasonable number of studies that have proved that brand image is the
image that any brand has in the market. In a similar fashion, there is another term called
customer satisfaction which also has been proved as a psychological condition of a
consumer that may have significant advantages to different parties or organizations. There
are a number of factors that critically influence brand image and customer satisfaction.
There have been compelling findings by different researchers that suggest the impact of
brand image on the loyalty of a customer for any organization. There are research
findings that closely examine the relationship between factors like Brand Image,
Customer Satisfaction and Customer Loyalty.
This study is essential in a number of ways. Brand Image is conducive for purchasing or
marketing programs. Martin (1995) deduced that the development and management of a
strong brand image is an essential element of an organization’s marketing program. Brand
Image has also been studied along some other major build ups such as brand favorability,
brand strength and brand uniqueness.
We conducted a preliminary survey of 111 respondents regarding the impact of brand
image on customer loyalty. The results show that gender does not have any impact on
customer loyalty or brand image. Also, age has a direct relationship with brand
favorability, which means that age has a direct impact on brand image as well as brand
loyalty of the customer. Monthly income of the customer also has a direct relationship
with brand favorability, brand strength and brand uniqueness and hence has a direct
impact on customer loyalty.
6. 2
1.1 Research Question
Is there an impact of Brand Image on Customer Loyalty?
1.2 Investigative Questions
1. What is the relationship between gender and Impact of Brand Image on Customer
Loyalty?
2. How age is related with the Impact of Brand Image on Customer Loyalty?
3. What is the relationship between Monthly Income and the Impact of Brand Image
on Customer Loyalty?
1.3 Research Objectives
1. To determine the impact of brand image on customer loyalty.
2. To determine the relationship between gender and different aspects of brand
image.
3. To understand the relationship between age and different aspects of brand
image.
4. To analyze the relationship between monthly income and different aspects of
brand image.
1.4 Hypothesis
HO1: There is no significant impact of favorability of Brand on Customer Loyalty.
HA1: There is significant impact of favorability of Brand on Customer Loyalty.
HO2: There is no significant impact of Brand strength on Customer Loyalty.
HA2: There is significant impact of Brand strength on Customer Loyalty.
HO3: There is no significant impact of uniqueness of Brand on Customer Loyalty.
HA3: There is significant impact of uniqueness of Brand on Customer Loyalty.
7. 3
1.5 Limitations
1. The number of respondents taken is not much due to the time constraint.
2. Only three major contributing factors to brand image are considered for the study,
the usage of scale is kept simple for the ease of understanding and analysis.
3. More descriptive statistical analysis methods such as the factor analysis aren’t
employed since the nature of the study was confined to the validation of
relationships among different variables.
8. 4
Chapter-2
LITERATURE REVIEW
The aim of the research is to study the impact of Brand Image on the Customer Loyalty
throughout the country. This research utilized a more holistic measure of the relevant
parameters than previous studies. The measures accounts for the Brand Image’s expanded
relevance in the realm of trust, customer satisfaction and customer loyalty. Presently,
Brand Image is a dominant and defining characteristic in the domain of marketing and
intersecting disciplines.
In this study, we developed three hypotheses to examine the relationship between formed
variables and the impact of Brand Image on the Customer Loyalty. Hsieh and Lindridge
(2005) states that Brand image is the perception of a brand through brand association in
the minds of customers and Sondoh, S.L.; Ishak, I. and others (2007) add that it is a set of
brand associations formed and attached to the minds of customers.
Keller (2009) deduced the inclusion of the whole elements of brand image, such as
favorability of brand, strength of brand, and uniqueness of brand for analysis while Kotler
(2005) found out that the elements of uniqueness include variation of service provided,
the variation of the price, as well as differentiation of the physical appearance of a
product.
Da Silva (2010) inferred that the idea behind brand image is that the consumer is not
purchasing just the product or service but also the image associated with it while Schultz
(2005) concluded that customers who are loyal to certain brand will recommend it to
other people and are not easily influenced by competitors to make purchases.
9. 5
Table 2.1: Important findings of Literature Review
S. No. Author(s) Year Key Findings
1. Hsieh and Lindridge 2005
Brand image is the perception of a brand through
brand association in the minds of customers.
2.
Sondoh, S.L.; Ishak, I.
and others.
2007
Brand image is a set of brand associations formed
and attached to the minds of customers.
3. Keller, K.L. 2009
Inclusion of the whole elements of brand image,
such as favourability of brand, strength of brand,
and uniqueness of brand for analysis.
4. Kotler, P. 2005
Elements of uniqueness include variation of service
provided, the variation of the price, as well as
differentiation of the physical appearance of a
product.
5.
Davies, B.A. and
others
2003
Strong brand image results in the overall customer
satisfaction for a product/service.
6. Vinhas and Faridah 2008
Brand image has something to do with product
appearance.
When customers are satisfied with the
product/service they will become loyal to the
brand even though they have other optional
brands.
7. Earls and others 2004
Strong brand image results in customer satisfaction
and therefore in customers loyalty.
8. Schultz, D.E. 2005
Customers who are loyal to certain brand will
recommend it to other people.
Customers Loyal to a Brand are not easily
influenced by competitors to make purchases.
9.
Vazquez-Carrasco, R
and Foxall, G.R.
2006
Social, confident and special brand image has
positive impact on loyalty intention.
10. da Silva, R.V. 2010
Idea behind brand image is that the consumer is
not purchasing just the product or service but also
the image associated with it.
10. 6
Chapter-3
RESEARCH METHODOLOGY
3.1 Method
To analyze the Impact of Brand Image on Customer Loyalty, mixed approach was used
which included both exploratory and inductive reasoning in order to accumulate
background information on the given topic to filter the research questions. The
identification of the information which is to be used along the sample to derive the
response and their analysis, investigative questions were formulated.
3.1.1 Data
Primary Data:
Survey data gathered from questionnaire is used as the primary source of data.
Secondary Data:
The various scholarly journals & research articles were used as the secondary source of
data.
3.1.2 Reasoning
We employed inductive and exploratory reasoning because it satisfies the exploratory
nature of our research.
11. 7
3.1.3 Research Tools
A study is conducted on the sample population using a self-framed questionnaire which is
forwarded to the respondents through the web-link.
The steps used to conduct the survey include:
Defining the objective of the survey
Determining the sampling group
Preparing the questionnaire
Registering the responses
Data analysis
3.2 Sampling Design
Sampling is selecting some elements in a population and drawing conclusion about the
entire population. Population is the total collection of elements about which we wish to
make some references. Convenience sampling is used in the study of the population as it
is a non-probability sampling technique where respondents are selected as per the
accessibility and proximity. The population involved is very large in number it’s clear
that individual interaction in impossible to carry out. Convenience sampling being very
fast, inexpensive is the most relevant choice for sampling design.
3.3 Sample Size Calculation
The Population (Population of India) is N = 1339200000
Confidence Interval (e) = 6%
Sample proportion (p) = 0.5
q = 1 – p = 0.5
Confidence Level = 95%
Z-Score = 1.96
Formula to calculate Sample Size:
For larger or infinite population;
S = (Z2* p * q) / e2
And Sample Size (n) = S / [1 + (S - 1)/N]
12. 8
3.4 Questionnaire Design
The questionnaire has been thoughtfully designed keeping the research objectives in
mind. It consists of 12 questions in total; out of which 3 are demographic and the
remaining 9 are intended to capture data at all the levels (Nominal, Ordinal, Interval and
Ratio).
We have kept the questionnaire as concise as possible to get the maximum reliable
responses.
The questionnaire consists of the following kinds of questions and scales:
Demographics
Likert Agreement Scale
13. 9
Chapter-4
DATA ANALYSIS & INTERPRETATION
This chapter consists of the analysis and interpretation of 111 responses collected on an
unbiased basis from people of different parts of the country. Analysis was done with the help
of Google Forms and then generating useful graphs in Microsoft excel. Hypothesis testing was
done by chi-square method using the SPSS software and various graphs were obtained from
MS Excel and Google sheets.
4.1 Demographic Presentation
The total samples collected from population are 111, out of which 44 are female and 67 are
male students. This is shown in Fig 4.1.1
Fig. 4.1.1: Gender
44
67
0
Gender
Female Male Other
14. 10
As seen in Fig. 4.1.2, 75 respondents are in the age group 18-24, 24 in 25-34 age group. From
this we can conclude that most of the respondents are in the age group of 18-24.
Fig. 4.1.2: Age Groups
Of all the respondents, when it comes to their Monthly Income 66 earn under 15000 ₹, 19
earn in the range of 30000₹ to 49999 ₹. This is given in Fig. 4.1.3
Fig. 4.1.3: Monthly Income
4
75
24
2 5 1
Age
below 18 18-24 25-34 35-44 45-55 above 55
66
15
19
6 2 21
Monthly Income
under 15000₹ 15000₹ to 29999₹ 30000₹ to 49999₹ 50000₹ to 74999₹
75000₹ to 99999₹ 100000₹ to 150000₹ over 150000₹
15. 11
From the Fig. 4.1.4 it is clear that a majority of the respondents (59) said that they agree with
the fact that Brand Favorability is an important factor in repurchase and recommendation of a
brand.
Fig. 4.1.4: Brand Favorability to Customer Loyalty.
From the Fig. 4.1.5 we can see that 52 of the respondents agree with the fact that Brand
Ambassador Endorsements is a contributing factor in brand repurchase and recommendation.
Only 19 respondents selected strongly disagree or disagree.
Fig. 4.1.5: Brand Ambassador Endorsement to Customer Loyalty.
2 0
15
59
35
0
10
20
30
40
50
60
70
Strongly
Disagree
Disagree Neutral Agree Strongly Agree
Brand Favorability
5
14
30
52
10
0
10
20
30
40
50
60
Strongly
Disagree
Disagree Neutral Agree Strongly Agree
Brand Ambassador Endorsement
16. 12
For the question related to Attractive product packaging / service delivery being a decisive
factor in repurchase and recommendation of a brand, most respondents (56) agreed to the
argument.
Fig. 4.1.6: Attractive Packaging / Delivery to Customer Loyalty.
A majority of the respondents agree (58) with the fact that Brand Strength is an important factor
in brand repurchase and recommendation.
Fig. 4.1.7: Brand Strength to Customer Loyalty.
3 3
15
56
34
0
10
20
30
40
50
60
Strongly Disagree Disagree Neutral Agree Strongly Agree
Attractive Packaging / Delivery
3 2
13
58
35
0
10
20
30
40
50
60
70
Strongly Disagree Disagree Neutral Agree Strongly Agree
Brand Strength
17. 13
From Fig. 4.1.8 it is evident that majority of the respondents (59) agree that Variety of offerings
is a factor in repurchase and recommendation of products/services offered by a brand.
Fig. 4.1.8: Variety of offerings to Customer Loyalty.
From the Fig. 4.1.9 it is evident that majority of the respondents (60) strongly agree that after
sales service is a major reason in repurchase and recommendation of a brand.
Fig. 4.1.9: After sales service to Customer Loyalty.
2 4
13
59
33
0
10
20
30
40
50
60
70
Strongly Disagree Disagree Neutral Agree Strongly agree
Variety of offereings
2 3
6
40
60
0
10
20
30
40
50
60
70
Strongly Disagree Disagree Neutral Agree Strongly agree
After Sales Service
18. 14
From the Fig. 4.1.10 it is clear that majority of the respondents (55) agree that Brand
Uniqueness is a decisive factor in repurchase and recommendation of a brand.
Fig. 4.1.10: Brand Uniqueness to Customer Loyalty.
From the Fig. 4.1.11 it can be inferred that majority of the respondents (62) agree that Unique
set of offerings by a brand is an important reason of repurchase and recommendation.
Fig. 4.1.11: Unique Offerings to Customer Loyalty.
From the Fig. 4.1.12 it is evident that majority of the respondents (86) either agree or strongly
agree that unique buying experience is decisive in repurchase and recommendation of a Brand.
Fig. 4.1.12: Unique Offerings to Customer Loyalty.
3 4
16
55
33
0
10
20
30
40
50
60
Strongly Disagree Disagree Neutral Agree Strongly Agree
Brand Uniqueness
3 4
18
62
24
0
10
20
30
40
50
60
70
Strongly Disagree Disagree Neutral Agree Strongly Agree
Unique Offerings
5 4
16
49
37
0
10
20
30
40
50
60
Strongly Disagree Disagree Neutral Agree Strongly Agree
Unique Experiences
19. 15
4.2 Hypothesis Testing
The three hypotheses developed in the earlier stages were put to test with the help of a chi-
square analysis. For this purpose, we have used SPSS for analysis. To complete the analysis,
the three hypotheses were put to test with the different attributes i.e. impact of different factors
and their outputs are presented in the tables below:
Table 4.2.1: Null Hypothesis Test for the Impact of Brand Image on Customer Loyalty to Gender.
S. No. Factor df Chi-Square
Value
Table
Value
Null
Hypothesis
1. Brand Favorability 3 6.472 7.815 Accepted
2. Brand Ambassador Endorsement 4 3.615 9.488 Accepted
3. Attractive Packaging/Delivery 4 4.182 9.488 Accepted
4. Brand Strength 4 0.719 9.488 Accepted
5. Variety of Offerings 4 3.152 9.488 Accepted
6. After Sales Service 4 3.031 9.488 Accepted
7. Brand Uniqueness 4 2.923 9.488 Accepted
8. Unique Offerings 4 6.407 9.488 Accepted
9. Unique Experience 4 3.560 9.488 Accepted
*Significance Level=95% (α=0.05)
20. 16
Table 4.2.2: Null Hypothesis Test for the Impact of Brand Image on Customer Loyalty to Age.
S. No. Factor df Chi-Square
Value
Table
Value
Null
Hypothesis
1. Brand Favorability 15 8.740 24.996 Accepted
2. Brand Ambassador Endorsement 20 34.462 31.410 Rejected
3. Attractive Packaging/Delivery 20 32.680 31.410 Rejected
4. Brand Strength 20 14.102 31.410 Accepted
5. Variety of Offerings 20 9.964 31.410 Accepted
6. After Sales Service 20 32.084 31.410 Rejected
7. Brand Uniqueness 20 13.236 31.410 Accepted
8. Unique Offerings 20 7.579 31.410 Accepted
9. Unique Experience 20 20.077 31.410 Accepted
*Significance Level=95% (α=0.05)
21. 17
Table 4.2.3: Null Hypothesis Test for the Impact of Brand Image on Customer Loyalty to Monthly Income.
S. No. Factor df Chi-Square
Value
Table
Value
Null
Hypothesis
1. Brand Favorability 18 41.336 28.869 Rejected
2. Brand Ambassador Endorsement 24 30.826 36.415 Accepted
3. Attractive Packaging/Delivery 24 43.613 36.415 Rejected
4. Brand Strength 24 30.215 36.415 Accepted
5. Variety of Offerings 24 51.402 36.415 Rejected
6. After Sales Service 24 44.540 36.415 Rejected
7. Brand Uniqueness 24 38.826 36.415 Rejected
8. Unique Offerings 24 45.064 36.415 Rejected
9. Unique Experience 24 27.797 36.415 Accepted
*Significance Level=95% (α=0.05)
4.3 Findings
Questions 1 to 3 are related to the impact of brand favorability aspect of the brand image on
the customer loyalty.
Questions 4 to 6 are related to the impact of brand strength aspect of the brand image on the
customer loyalty.
Questions 7 to 9 are related to the impact of brand uniqueness aspect of the brand image on the
customer loyalty.
Table 4.2.1: Gender
The relationship between the impact of brand image on customer loyalty and gender is non-
existing due to the fact that none of the different factors have any sort of relationship with the
gender of population.
22. 18
Table 4.2.2: Age
The relationship between the impact of brand image on customer loyalty and age is evident
from the data as brand ambassador endorsement, attractive packaging / delivery and after sales
service factors of the brand image has a significant relationship with the age of the population.
Table 4.2.3: Monthly Income
The relationship between the impact of brand image on customer loyalty and monthly income
is evident from the data that brand favorability, attractive packaging / delivery, variety of
offerings, after sales service, brand uniqueness and unique offerings has a significant
relationship with the monthly income of the population.
23. 19
Chapter-5
CONCLUSION
The results of this project are based on the analysis of data collected from a sample of 111
people across the country. Participating population in the survey were from various income
brackets and different age groups.
The main objective of this research was to understand the impact of brand image on customer
loyalty, the analysis of the data showed that gender has no significant relationship with the
brand image in impacting the customer loyalty while age and especially monthly income has
significant relationship with the brand image in impacting the customer loyalty.
None of the three major contributing factors to brand image including brand
favorability, brand strength and brand uniqueness has a significant relationship with the
gender of the population.
Brand ambassador endorsement, attractive packaging / delivery and after sales service
are the major attributes which have a significant relationship with the age of the
population, It can be concluded that brand favorability is the major contributing factor
in association with the age to the brand image in impacting the customer loyalty.
Brand favorability, attractive packaging / delivery, variety of offerings, after sales
service, brand uniqueness and unique offerings are the attributes which have a
significant relationship with the monthly income of the population. The conclusion
which can be drawn out of this is that all of the three contributing factors to the Brand
Image namely: Brand Favorability, Brand Strength and Brand Uniqueness has a
significant relationship with the Monthly Income and hence they surely have an impact
on the customer loyalty.
26. 22
APPENDIX B
Questionnaire
Hello! We are a group of Management students trying to analyze the Impact of Brand Image
on Customer Loyalty, please fill the following Questionnaire. Your responses will be kept
confidential. Thank You!
1. Brand Favorability is an important factor in repurchase and recommendation of a brand.
Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
2. Brand Ambassador Endorsements is a contributing factor in brand repurchase and
recommendation.
Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
27. 23
3. Attractive product packaging / service delivery is a decisive factor in repurchase and
recommendation of a brand.
Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
4. Brand Strength is an important factor in brand repurchase and recommendation.
Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
5. Variety of offerings is a factor in repurchase and recommendation of products/services
offered by a brand.
Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
28. 24
6. After sales service is a major reason in repurchase and recommendation of a brand.
Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
7. Brand Uniqueness is a decisive factor in repurchase and recommendation of a brand.
Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
8. Unique set of offerings by a brand is an important reason of repurchase and
recommendation.
Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
29. 25
9. Unique buying experience offered by a brand is decisive in repurchase and
recommendation of a Brand.
Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Section: Demographics
1. Gender
Female
Male
Other
2. Age
>=18
19-30
29-40
39-50
49-60
60<
30. 26
3. Income
under ₹ 15,000
₹ 15,000 to ₹ 29,999
₹ 30,000 to ₹ 49,999
₹ 50,000 to ₹ 74,999
₹ 75,000 to ₹ 99,999
₹ 100,000 to ₹ 150,000
over ₹ 150,000