Boosting Brand Loyalty through Referral Marketing

The text discusses the decline in B2C consumer brand loyalty due to factors such as lack of product understanding and emotionally triggered purchase decisions. In contrast, B2B businesses tend to have higher brand loyalty due to longer-term commitments and better knowledge about products and services. The importance of brand loyalty is highlighted, with examples from companies like Facebook and Amazon that have achieved success in both B2C and B2B segments. Additionally, the text explores the concept of brand extension, citing an example of a company called Rasna Limited that failed to successfully extend its brand into a new product category.

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Answer 1: It has been observed that the online fashion company i.e. Misguided has the
shortcomings in order to understand and implement the concept of the marketing. The company
offers products for the women only in order to satisfy them and maximize the revenues to attain
the sustainable competitive advantage. Further, the vision of the company is to offer the products
to the targeted market segment at the affordable prices so that numerous customers can avail the
services. The company was established in the year 2015, and it doesn't have any offline stores
and the company only targets the women of all ages in order to generate the revenues to a great
extent. Moreover, it has been observed that the company is facing various issues in order to
completely utilize the concepts of the marketing ("Women's Clothing - Shop Ladies Fashion
Online | Missguided", 2017). The company focuses on the creation of the product and delivers
them timely, but the process of the communication is not effective enough in order to retain the
customers. The company is not promoting the activities of the business adequately as they are
not updating the information on the website, the new products are not added most of the times,
and the queries of the customers are not handled wisely. Also, it has been observed that the
company is not using the adequate strategy in order to attract more and more customers. But,
now the company has started taking the issues seriously because it is not gaining the sustainable
competitive advantage and the company is even facing some losses because of this. The
company even started offering discounts to the customers on all the products in order to
maximize the sales and generate revenues, but still, their strategy is not appropriate at all.
Furthermore, the company should take various measures in order to improve the strategy. For
example, the company should post the comments on the social media platform in order to have a
continuous growth along with the updated images of the products and should ensure that the
products are actually available so that they can be delivered on time once the order is placed by

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the customer. Further, the company should ensure that the social reviews are leveraged in order
to automate the marketing through word of mouth. The company should ensure that the activities
and the products of the company are promoted appropriately so that the targeted segment of the
market i.e. women of US get attracted towards the online store of the company (Misguided). This
will help the company to attract more and more customers to a great extent and will be able to
generate the revenues along with the maximization of sales (Hollensen, S. 2015). Also, the
company will be able to attain the sustainable competitive edge for a longer period of time and
will give tough competition to the rivals and will achieve the high market share along with the
strong presence in the market by providing great quality products. Therefore, the company
should focus on the promotional activities in order to utilize the concept of the marketing
completely.

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Answer 2: It has been observed that every organization has to make changes in their operations
and the activities by adopting a new technology in order to attain a sustainable competitive
advantage and further compete with the competitors to a great extent. The organizations which
were established a decade ago faces various challenges in order to adapt the new technology, and
their historical model of business is being threatened by transformational technology at every
step (Christensen, C. M. June 2002). Further, Automatic Data Processing is a company of US
which offers the services and the software of human resource management. The company was
established in 1972 and offered solutions and the services to around 20,000 automotive dealers.
After some time, the company started facing challenges in order to sustain the position in the
market due to historical model of business. Then, the company realized the importance of
transformational technology for the survival of the business and the company started focusing on
the customers before starting with the adequate transformational technology. The company also
focused on the employee in order to make the vision and mission statements clear to them so that
the new technology can be used effectively and efficiently to a best possible extent. Furthermore,
the company developed the culture of learning, change, and growth for the employees so that
they can adapt the transformational technology and work productively to achieve the long-term
goals and helps in attaining sustainable competitive edge for a longer period of time. Also, the
company ensured that the employees understand the transformational technology appropriately
so that they doesn’t face any challenges while working effectively.
There were various factors of the organization which helped the company to overcome the
challenges of transformational technology like the marketing, and the business strategy helped
the company to adopt the technology effectively and efficiently to a great extent. Further, the
environment of the company helped to adapt the new technology as the culture of growth,

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learning and the changes was being created which encouraged the employees to work more
effectively and efficiently with the new technology. Whereas, the size of the market helped the
company to face various challenges in order to adopt the transformational technology. The size
of the company is large, and it required great resources and the cost in order to train the
employees to get familiar with the new technology. It has been observed that the structure of the
company is very vast which caused various hindrances in order to use the new technology and
attain the sustainable competitive edge by generating revenues and maximizing the sales to a
great extent to give tough competition to the competitors and further create a strong market
presence. Therefore, every organization should change their traditional way of working with the
time in order to achieve desired goals and the objectives for a longer period of time and this will
help the organizations to attract more customers by offering innovative and the creative products
according to their needs. This will help the organizations to retain the customers and develop a
strong relation with them.

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Answer 3: The referral marketing is defined as a method which is being used in order to
promote the products and the services to the customers by using the referrals mainly word of
mouth. It has been observed that the referrals occur spontaneously and the organizations can
persuade this by using the adequate and the appropriate strategies (Berman, B. 2016). Further,
the company which uses the excellent referral strategy of marketing is Maple.
a) Maple offers the service of food in the city of New York, and the company has managed
to use the marketing strategy of referral effectively and efficiently in a best possible way.
Further, the company uses the straightforward strategy of marketing in order to attract the
customers. Referral marketing strategy helped the company to maximize the delivery of
meals to a great extent. The company used to offer discounts to the customers in order to
have the meals along with the high-quality services, and this helped the company to
attract more customers because the quality and the price of the food was being promoted
through word of mouth i.e. referral strategy of marketing. Moreover, the company started
observing the customers who were visiting more frequently in order to develop a loyal
relation with them, and additional offers were made available to them in order to retain
and satisfy them and as a result the customers used to refer the services of Maple to their
friends who helped the company to expand its services and attract more customers.
Therefore, the company effectively and efficiently used the marketing strategy of
referrals in order to create the strong market presence and attain a sustainable competitive
edge for a longer period of time.
b) According to the reports, it has been observed that in the US around 2 billion
conversations are being made about the brands on the regular basis as a part of referral
marketing program. Further, people talk about the services and the products which they

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like the most and further recommend them to their friends. Also, approximately 70
percent of the organizations comes through the referrals which mean that most of the
customers purchase the products and avail the services because they are being
recommended by people. Moreover, every type of firm is suitable for the program of
referral marketing i.e. retail stores, restaurants, banks, automotive companies, healthcare,
clubs, etc. The program of referral marketing is the traditional tool of marketing the
products and the services which still holds the great importance in the organizations
which helps in achieving a great market share and the create a strong market presence
along with the sustainable competitive advantage for a longer period of time. This
marketing program also helps the companies to develop a strong base of customer loyalty
which further helps the company to retain the customers for a longer period of time.
During the program of referral marketing, the companies offer benefits to the customers
who give reference and even to those customers as well to whom they have referred the
products and the services.

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Answer 4: The brand loyalty is being defined as the scenario in which the customer fears in
order to purchase and consume the products from some other brand without any trust.
Further, the components of brand loyalty are publicity through word of mouth, buying
repetitively, the sensitivity of the price, trust towards the brand, commitment and the
satisfaction level of the customers. Moreover, the brand loyalty is an essential part of an
organization as it persuades the customers to make the purchases continuously and this
makes the customers be loyal to the particular brand for a longer period of time and as a
result the company is able to attain a sustainable competitive edge for a longer period of time
and develop a great market presence through the activities and the loyalty towards customers
(Sutikno, B. 2011). Also, if the other brands offer the same products at the lower prices then
also the customers do not make purchases due to the brand loyalty, and if the organization
provides great brand loyalty to customers, then they help in promoting the brand through the
strategy of referral marketing.
Further, it has been observed that the B2C consumer brand loyalty is thought to be on the
decline because the purchases do not have a great effect on the customers for a longer period
of time. Further, the prices of the products are very less, and due to this, the customer gets
various other options in order to make a choice among the products. It has been observed that
the customers of B2C don't get detailed understanding and the information of the products
and the services which they purchases (Maheshwari, V., Lodorfos, G., & Jacobsen, S. 2014).
Also, the customers of the B2C makes the purchase decisions which are emotionally
triggered.
Moreover, it has been observed that the B2C and the B2B businesses are completely different
to a great extent because they both have the different targeted audience. The process of the

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functioning is not simple in the B2B as it includes distinct areas and the departments. The
process of purchasing is time-consuming, and it includes huge cost as compared to B2B.
Further, businesses look for commitments for a longer period of time before engaging with
the other organizations. So, it has been observed that the brand loyalty is much higher in the
B2B because the relationships have an essential impact on the operational cost and systems,
processes which further foster the partnerships among the businesses. In B2B the customer
gets better knowledge about the particular products and the services and further the purchases
are made accordingly. The customers of B2B are clear about the products and the services
which they want to avail in order to get satisfied and further recommend the products and
services to others. But, some of the brands have proved all the myths wrong and achieved
great success in the segments of B2C and B2B. For example, Facebook and Amazon.
Therefore, brand loyalty is very essential for an organization in order to generate the
revenues and the maximize the sales by attracting more customers and retaining them for a
longer period of time which further helps in developing the strong market presence as
compared to the competitors.

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Answer 5: When the customers of the new business have synchronized values and aspirations to
the core business, and when the same aspirations and values have been embodied in the brand,
the new business is seen to be accepted by the customers. When the brand outside the core
product category is extended, it is beneficial for helping in the evaluation of the product category
opportunities, lowering the risks, identifying the resource requirements and finally measuring the
relevance of the brand and its overall appeal (Hayran, C., & Gürhan-Canli, Z. 2016). The
companies can introduce new products under their already established brand name under brand
extensions. However, in some cases, brand extensions are seen to have failed and even damaged
the brand equity of the parent brand. For example, Rasna Limited has been considered as one of
the most famous soft drinks companies of India and has made its name stand out in the
concentrate market. However, the company started brand extension so as to move away from its
niche but it failed drastically in its attempt. The company came up with a fizzy fruit drink named
“Oranjolt," so as to challenge the threat from the foreign competitors and to try new things. But
the new brand was seen to bomb even when it took off. Most of the people had not even heard
about it as it died even before coming to the store.
Oranjolt was launched as the fruit drink where carbonation was used as a preservative, but it
required continuous refrigeration and Indians have the tendency of switching their refrigerators
off during the night time which lead to the creation of initial problems in the launch of Oranjolt.
Further, the drink was seen to have a very short shelf life of about three to four weeks whereas
the competitor soft-drinks had a shelf-life of about ten to twelve weeks. Therefore a quick
replenishment was demanded in the stores and the service outlet became another major problem
for the company. But it was recognized that the distribution structure of in India is not efficient
enough to replace the drink in every three to four weeks. It is seen that even the brands like Pepsi

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and Coke were replenished once in every ten weeks making it difficult for the product to sustain
in the competitive market.
Therefore, the product was produced in every limited number of outlets and was not able to
expand in a rapid manner. Thereby making it problematic for the company and its reputation.
The brand extension using Oranjolt was the only effort made by Rasna Limited for trying their
hand beyond the Rasna products which are its bread and butter segment. The company still
enjoys over eighty percent of the total concentrated soft drink market share. But its attempt
towards brand extension failed miserably, and the company learned a lesson to cover all their
bases before extending their brands. Rasna needed to anticipate the quality problems because it
failed drastically as a result of retail practices. Therefore, brand extension is very much essential
for an organization in order to sustain in the competitive world for a longer period of time.

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REFERENCES
Berman, B. (2016). Referral marketing: Harnessing the power of your customers. Business
Horizons, 59(1), 19-28.
Hayran, C., & Gürhan-Canli, Z. (2016). Brand extensions. The Routledge Companion to
Contemporary Brand Management, 136.
Hollensen, S. (2015). Marketing management: A relationship approach. Pearson Education.
Sutikno, B. (2011). Does Consumers' Brand Identification Matter: The Mediating Roles of Brand
Loyalty. International Journal of Interdisciplinary Social Sciences, 6(3).
Women's Clothing - Shop Ladies Fashion Online | Missguided. (2017). Missguidedus.com.
Retrieved 25 February 2017, from https://www.missguidedus.com/
Maheshwari, V., Lodorfos, G., & Jacobsen, S. (2014). Determinants of brand loyalty: A study of
the experience-commitment-loyalty constructs. International Journal of Business
Administration, 5(6), 13.
Christensen, C. M. (June 2002). The rules of innovation. Technology Review.