Brand Loyalty, Types, Importance, and Strategies for Increasing it

BRAND LOYALTY
Brand Loyalty is a scenario where the consumer fears purchasing and consuming product from
another brand which he does not trust. It is measured through methods like word of mouth
publicity, repetitive buying, price sensitivity, commitment, brand trust, customer satisfaction, etc.
Brand loyalty is the extent to which a consumer constantly buys the same brand within a product
category. The consumers remain loyal to a specific brand as long as it is available. They do not
buy from other suppliers within the product category. Brand loyalty exists when the consumer
feels that the brand consists of right product characteristics and quality at right price. Even if the
other brands are available at cheaper price or superior quality, the brand loyal consumer will
stick to his brand.
Brand loyal consumers are the foundation of an organization. Greater loyalty levels lead to
less marketing expenditure because the brand loyal customers promote the brand positively.
Also, it acts as a means of launching and introducing more products that are targeted at same
customers at less expenditure. It also restrains new competitors in the market. Brand loyalty is a
key component of brand equity.
Brand loyalty can be developed through various measures such as quick service, ensuring quality
products, continuous improvement, wide distribution network, etc. When consumers are brand
loyal they love “you” for being “you”, and they will minutely consider any other alternative
brand as a replacement. Examples of brand loyalty can be seen in US where true Apple
customers have the brand's logo tattooed onto their bodies. Similarly in Finland, Nokia
customers remained loyal to Nokia because they admired the design of the handsets or because
of user- friendly menu system used by Nokia phones.
Brand loyalty can be defined as relative possibility of customer shifting to another brand in
case there is a change in product’s features, price or quality. As brand loyalty increases,
customers will respond less to competitive moves and actions. Brand loyal customers remain
committed to the brand, are willing to pay higher price for that brand, and will promote their
brand always. A company having brand loyal customers will have greater sales, less marketing
and advertising costs, and best pricing. This is because the brand loyal customers are less
reluctant to shift to other brands, respond less to price changes and self- promote the brand as
they perceive that their brand have unique value which is not provided by other competitive
brands.
Brand loyalty is always developed post purchase. To develop brand loyalty, an organization
should know their niche market, target them, support their product, ensure easy access of their
product, provide customer satisfaction, bring constant innovation in their product and offer
schemes on their product so as to ensure that customers repeatedly purchase the product.
Brand Loyalty Types
Indian consumers are broadly categorized into four
Pleasure seekers
Value seekers
Novelty seekers and

Bargain Hunters
Pleasure seekers: who purchase for the sake of pleasure, fun. Mostly because they enjoy
or derive pleasure using them.
Eg: Formula one cars, vintage cars, antiques, vintage wines etc.
Value seekers: These people usually are very conscious about quality – price party. If
the value of the product is good or high, they don’t mind paying a higher price.
Eg: Purchasing electronic goods by software engineers, wedding jewellery by brides’
parents etc.
Novelty seekers: They are more interested in new items which are introduced in the
market . They want and like to try everything new in the market.
Bargain Hunters: These customers shop where maximum discounts are given or many
promotional offers are given. They prefer to purchase any product at the lowest possible
price.
Eg: Wal – Mart, Big Bazaar, Subhiksha etc.
The world over loyalty towards a brand by a consumer is categorized as
Hard core loyalty: Those who have undivided loyalty to a brand, and buy the same
Product repeatedly. If A, B, C, D, E and F are the different brands of a particular product
category in the Market. Then hard core loyalists can be stated as people who purchase.
oEg: A, A, A, A, A ( Mysore – Sandal Soap )
Split Loyals: These people shift between two or three brands which have the same
or similar, attributes. They are also called divided loyalists
oEg: AB, AB, AB ( Mysore Sandal Soap and Santoor )
Shifting Loyals: These people shift from one brand to another slowly, They are also
Called unstable loyalist.
oEg: AAA, BBB, CCC (Mysore Sandal Soap to Santoor to Rexona)
Switchers: Who are not loyal to any product, or no loyalty
oEg: A, B, C, D, E, F
Invariably it’s the hard core loyalists who make up for the population of brand
loyal people. Split loyal and Shifting loyal can be brought back through brand promotion
activities.
Increasing Brand Loyalty
Popular Loyalty Programs
Below are some of the most popular Loyalty Programs that are currently being used by major
companies as a means of engaging their customers beyond traditional advertising.
oSweepstakes and Advergames
Branded digital games that engage consumers with prize incentives
oContests
Skill tests and user-generated promotions such as video and photo contests
oSocial Media Applications and Management

Develop promotions and offers within social media channels
Ongoing management and maintenance of brand Facebook pages and
other social media
oCustomer Rewards Programs
Online points programs – earn prizes for incremental purchase behavior
(e.g., JetBlue's TrueBlue and American Airlines's AAdvantage frequet
flyer programs)
oMy Coke Rewards, Pepsi Stuff, and the Marriott Rewards loyalty programs
oPromotional auctions – bid for prizes with points earned from incremental
purchase behavior
oEmail Clubs
oManage overall subscription databases – national and/or segmented by market
oDesign, develop, and publish email blasts
oDevelop templates specific offers and promotions / delivery
oText Messaging / Mobile Apps / Desktop Apps and Widgets
oSMS Promotions
oiPhone apps
oBranded web apps
Brand Extension:
Brand extension is required for a company’s growth, profitability, and brand’s added reputation.
It is an inevitable strategic move at some point of time in brand management. While extending a
brand, all assumptions related to that brand held for a long time are revised and the brand’s
identity is redefined. The brand managers need to identify growth opportunities and increase
parent brand’s value.
Brand Extension is nothing but launching a product in a different category under an already
established brand name. It is extending the existing brand promise with diverse products or
services.
The following diagram shows the matrix of brand growth.

When a company introduces a new product, it has the following choices:
New Brand, New Product (New Brand)
New Brand, Existing Product (Multi-Brand)
Existing Brand, New Product (Brand Extension)
Existing Brand, Existing Product (Line Extension)
The last two in the above list are the types of brand extensions.
Types of Brand Extensions:
Related brand extensions can further be classified into two sub-types viz. category related
brand extensions and image related brand extensions.
Category Related: When a brand is extended to a related product category meaning a category
that has similar purpose to serve, it is called category related brand extension.
Eg: Lux has been known as a premium bathing soap. When it was launched as a body wash, it
had a similar purpose to serve in a related product category.
Eg: EverYuth orange peel off is known to impart glow to the face and is a product used by young
ladies. When it was extended to face wash, the objective of the newly launched product was the
same and that was to offer freshness and glow to the face even after exposure to sunlight. This
was another instance of category related brand extension.