Copyright © 2002 by South-Western.All rights reserved.
CHAPTER 11CHAPTER 11
Customer Loyalty to
Products, Brands and Stores
Customer Loyalty to
Products, Brands and Stores
CUSTOMER BEHAVIOR: A MANAGERIAL PERSPECTIVECUSTOMER BEHAVIOR: A MANAGERIAL PERSPECTIVE
PART 4: Building Loyalty and Customer ValuePART 4: Building Loyalty and Customer Value
CUSTOMER BEHAVIOR: A MANAGERIAL PERSPECTIVECUSTOMER BEHAVIOR: A MANAGERIAL PERSPECTIVE
PART 4: Building Loyalty and Customer ValuePART 4: Building Loyalty and Customer Value
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
Conceptual FrameworkConceptual Framework
Payer
UserBuyerUNDERSTANDING
CUSTOMER
BEHAVIOR
UNDERSTANDING
CUSTOMER
BEHAVIOR
STORE LOYALTYSTORE LOYALTY
• A model of store loyalty• Store choice• Planned, unplanned and impulse
buying• One stop shopping
• A model of store loyalty• Store choice• Planned, unplanned and impulse
buying• One stop shopping
BRAND LOYALTYBRAND LOYALTY
• Behavioral brand loyalty• Attitudinal brand loyalty• A model of brand loyalty• Brand equity
• Behavioral brand loyalty• Attitudinal brand loyalty• A model of brand loyalty• Brand equity
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
Brand LoyaltyBrand Loyalty
Brand loyalty as a behavior
Brand loyalty as an attitude
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
Behavioral Brand LoyaltyBehavioral Brand Loyalty
The consistent repurchase of the same brand
Brand loyalty is measured in several ways: Proportion of purchase Sequence of purchase Probability of purchase
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
Attitudinal Brand LoyaltyAttitudinal Brand Loyalty
Greater liking for a brand
Attitudinal brand loyalty can be measured by asking customers to rank various brands in terms of how much they like a brand or which brand they prefer the most
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
Brand Loyalty as Attitude-Based BehaviorBrand Loyalty as Attitude-Based Behavior
Brand relationship quality Love/Passion Self-Connection Commitment Interdependence Intimacy Brand Partner Quality
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
Illustrative Measures of Brand LoyaltyIllustrative Measures of Brand Loyalty
These statements may be rated on a five-point scale. (from 1 - Strongly Disagree to 5 -Strongly Agree); stronger agreement shows higher loyalty.
1. I like this brand very much.
2. In this product category, I have a favorite brand.
3. When buying _____, I always buy my favorite brand no matter what.
4. In the past, almost all of my purchases of _____ have been this brand.
5. If my favorite brand of _____ is not available in the store, I would go to another store rather than buy a substitute brand.
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
A Model of Customers’ Brand LoyaltyA Model of Customers’ Brand Loyalty
Performance-fit
Social/Emotional Identification
Habit
TowardBrand Loyalty
Brand ParityToward Brand
Disloyalty
Brand Parity
Competitive Promotional Activity
Variety Seeking
Lack of
Involvement
Price Sensitivity
Market Factors
Customer Factors
Customer
Negative Forces Positive Forces
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
Contributors to Brand LoyaltyContributors to Brand Loyalty
Perceived brand performance fit
Social and emotional identification with the brand
Habit combined with a long history of using the brand
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
The Role of Cure Quality versus Caring Quality in Retaining CustomersThe Role of Cure Quality versus Caring Quality in Retaining Customers
‘High’
45.168.7‘Low’
8.437.6Quality of ‘Caring’
Physicians
‘High’
59.172.2‘Low’
13.017.4
Hospitals (Public)
‘High’
53.463.9‘Low’
8.027.4Quality of ‘Caring’
Dentists
‘High’
41.978.8‘Low’
11.130.8
Hospitals (Private)
‘High’
50.762.2‘Low’
13.042.3Quality of ‘Caring’
Pharmacists
‘High’
69.665.7‘Low’
14.325.0
Hospitals (Religious Affiliation)
‘High’‘Low’
Quality of ‘Cure’---
‘High’‘Low’
Quality of ‘Cure’---
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
Detractors From Loyalty: Attraction of AlternativesDetractors From Loyalty: Attraction of Alternatives
Market factors Brand parity Competitive
promotional activity
Customer factors Variety seeking Product involvement Price sensitivity Multi-brand loyalty Withdrawal from the
product category Change in needs
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
Brand EquityBrand Equity
Two views of brand equity Investor
The financial worth of the brand Brand valuation
Customer The value of a brand to the customer compared to
other brands
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
Brand Equity Versus Brand LoyaltyBrand Equity Versus Brand Loyalty
Brand loyalty is a consistent repurchase of the brand accompanied by a favorable brand attitude
Brand equity is a mental concept of a brand’s superiority
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
Components of Brand EquityComponents of Brand Equity
Five dimensions of brand equity Performance Social image Value Trustworthiness Identification
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
Customer LoyaltyCustomer Loyalty
A customer’s commitment to a brand, store, or supplier based on a strong favorable attitude and manifested in consistent repatronage
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
Illustrative Measures of Components of Brand EquityIllustrative Measures of Components of Brand Equity
P1 From this brand of television, I can expect superior performanceP2 During use, this brand of television is highly unlikely to be defectiveP3 This brand of television is made so as to work trouble freeP4 This brand will work very well
State Your opinion on the following statements by rating them 1 - 5 where 1 means strong disagreement and 5 means strong agreement:
Performance
I1 This brand of television fits my personalityI2 I would be proud to own a television of this brandI3 This brand of television will be well regarded by my friendsI4 In its status and style, this brand matches my personality
Social image
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
Illustrative Measures of Components of Brand Equity (cont’d)Illustrative Measures of Components of Brand Equity (cont’d)
T1 I consider the company and people who stand behind these television to be trustworthy
T2 In regard to consumer interests, this company seems to be very caringT3 I believe that this company does not take advantage of consumers
Trustworthiness
A1 After watching this brand of television, I am very likely to grow fond of itA2 For this brand of television, I have positive personal feelingsA3 With time, I will develop a warm feeling toward this brand of television
Attachment
V1 This brand is well pricedV2 Considering what I would pay for this brand of television, I will get much
more than my money’s worthV3 I consider this brand of television to be a bargain because of the benefits I
receive
Value
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
Loyalty Needs Both Attitude and BehaviorLoyalty Needs Both Attitude and Behavior
BEHAVIOR
STRONG WEAK
ATTITUDE
STRONG Loyalty Latent
WEAKSpurious Loyalty
No Loyalty
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
A Framework for Brand LoyaltyA Framework for Brand Loyalty
COMMUNITY AND SOCIAL SUPPORT
HIGH LOW
INDIVIDUAL FORTITUDE
HIGHImmersed Self
IdentifyDetermined Self-
Isolation
LOWVillage
EnvelopmentBasic Product
Superiority
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
Illustrative Measures of Store LoyaltyIllustrative Measures of Store Loyalty
These statements may be rated on a five-point scale. (1 - Strongly Disagree to 5 - Strongly Agree); stronger agreement shows higher loyalty.
1. I like this store very much.
2. For this group of products, I have a favorite store.
3. When buying _____, I always shop this store first.
4. In the past 3 months, a majority of my shopping trips have been to this store.
5. I usually divide my shopping among two or three stores.
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
A Model of Store LoyaltyA Model of Store Loyalty
What factor Merchandise quality Assortment Price value Store brands
How factor Ease of merchandise
selection In-store information
and assistance Convenience Problem resolution Personalization
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
How Customers ShopHow Customers Shop
A dynamic interplay of factors influences store choice Location Merchandise quality Selection Price
A Flow Chart of Customers’ Store Choice Decision ProcessA Flow Chart of Customers’ Store Choice Decision Process
Divide regular
shopping
Divide regular
shopping
Occasional trip for major
shopping
Occasional trip for major
shopping
Does store offer rare
merchandise assortment and
service?
Does store offer rare
merchandise assortment and
service?
Infrequent special
shopping trips
Infrequent special
shopping trips
Does store offer good prices?
Does store offer good prices?
Use for filler & emergency
trips only
Use for filler & emergency
trips only
Does store offer better price
deals?
Does store offer better price
deals?
Shop here most oftenShop here most often
Does store offer deep price discounts?
Does store offer deep price discounts?
DistanceIs the store
nearest to home or commuting
route?
DistanceIs the store
nearest to home or commuting
route?
Is the extra distance
negligible?
Is the extra distance
negligible?
Do not shop here
Do not shop here
Are store prices at least
comparable?
Are store prices at least
comparable?
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
NoNo
No
No
NoNo
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
Choices Based on Nonlocational CriteriaChoices Based on Nonlocational Criteria
Self selection Customers self-select themselves to be the
customers of the store that offers the advantage they seek
Other factors Service In-store display The pleasantness of the ambiance
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
Planned, Unplanned, and Impulse BuyingPlanned, Unplanned, and Impulse Buying
Planned purchases: those the customer had planned to buy before entering the storeUnplanned purchases: those the customer did not intend to buy before entering the store Restocking unplanned purchases Evaluated new unplanned purchases Impulse purchases
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
In-Store FactorsIn-Store Factors
Knowledge of the store
Time pressure
Purchase companion
Special store promotions
Atmospherics
Customer mood
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
Nonfood Store ShoppingNonfood Store Shopping
Significant factors in deciding on the store: Expected merchandise and price levels Customer service Store image Special advertised promotions
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
Shopping MotivesShopping Motives
Recreation
Socialization
Seeking status
Self-gratification
Information
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
One-Stopping ShoppingOne-Stopping Shopping
Suppliers that offer a variety of products or services may want their customers to engage in one-stop shopping (OSS), the practice of acquiring all related products from one supplier
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
Customer Motivations for Seeking OSSCustomer Motivations for Seeking OSS
Convenience
Cost savings
Integrated products
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
Perceived Risks of OSSPerceived Risks of OSS
The customer’s fate is tied to a single supplier Customers may believe that they can lower the
risk by diversifying the suppliers
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
Implications for MarketersImplications for Marketers
OSS should offer better value to customers, in time and/or cost savings, than what the customer can obtain from buying the bundled products or services individually
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
Customer Loyalty to Products and Stores and the Three Customer RolesCustomer Loyalty to Products and Stores and the Three Customer Roles
CONCEPT BUYERPAYERUSER
•Brand Performance • User value
BRAND LOYALTY
Behavioral • Reflects buyer’s sale consistent behavior
•Social/emotional identification
• User value
•Habit and history • Buyer routinizes brand decision
• User conditioning to product/source
Attitudinal • Reflects user preferenceA MODEL OF BRAND
LOYALTY DETERMINANTS
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
Customer Loyalty to Products and Stores and the Three Customer Roles (cont’d)Customer Loyalty to Products and Stores and the Three Customer Roles (cont’d)
CONCEPT BUYERPAYERUSER
•Attraction of alternatives
Brand parity • Reflects user indifference
Competitor promotions • Most appealing to payer
Variety seeking • Buyers may desire variety in sellers they deal with
• Users may seek variety in product/use
Product involvement • Users care about the brand
Price sensibility • Payer role dominates when customers are price sensitive
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
Customer Loyalty to Products and Stores and the Three Customer Roles (cont’d)Customer Loyalty to Products and Stores and the Three Customer Roles (cont’d)
CONCEPT BUYERPAYERUSER
Performance • Payers willing to pay for these superior user values
• Most relevant to user roles
BRAND LOYALTY
Social/image
Value • User values are compared with payer value
Trustworthiness • Trust of brand maker most valuable to buyers who may be accountable for this decision
• Users can enjoy the product/service with assurance
Copyright © 1999 by Thomas Southwestern. All rights reserved.
CHAPTER 11CHAPTER 11PART 4Customer Behavior: A Managerial Perspective
Customer Loyalty to Products and Stores and the Three Customer Roles (cont’d)Customer Loyalty to Products and Stores and the Three Customer Roles (cont’d)
CONCEPT BUYERPAYERUSER
STORE CHOICE
Distance/convenience • Of concern to buyer
Price • Of concern to buyer
Merchandise • User influence
UNPLANNED AND IMPULSE PURCHASESExploratory shopping • Buyers may try to
minimize future task• Can be driven by user
role seeking new items
Atmospherics • Buyer is influenced the most by these factors
In-store promotions • Most relevant to payer role
Knowledge of the store
Time pressure
Purchase companion