Brand loyalty has been proclaimed by some to be the ultimate goal of marketing. In marketing, brand loyalty consists of a consumer's commitment to repurchase the brand and can be demonstrated by repeated buying of a product or service or other positive behaviors such as word of mouth advocacy. True brand loyalty implies that the consumers are willing, at least on occasion, to put aside their own desires in the interest of the brand.
Brand loyalty is more than simple repurchasing, however. Customers may repurchase a brand due to situational constraints, a lack of viable alternatives, or out of convenience. Such loyalty is referred to as "spurious loyalty". True brand loyalty exists when customers have a high relative attitude toward the brand, which is then exhibited through repurchase behavior. This type of loyalty can be a great asset to the firm: customers are willing to pay higher prices, they may cost less to serve, and can bring new customers to the firm. For example, if Joe has brand loyalty to Company A he will purchase Company A's products even if Company B's are cheaper and/or of a higher quality.
An example of a major brand loyalty program that extended for several years and spread worldwide is Pepsi Stuff. Perhaps the most significant contemporary example of brand loyalty is the fervent devotion of many Mac users to the Apple Company and its products.
Market Inertia
On the other hand, one of the most prominent features of many markets is their overall stability - or inertia. Thus, in their essential characteristics they change very slowly, often over decades - sometimes centuries - rather than over months. This stability has two very important implications. The first is that if you are a clear brand leader you are especially well placed in relation to your competitors, and should want to further the inertia, which lies behind that stable position. This will, however, still demand a continuing pattern of minor changes, to keep up with the marginal changes in consumer taste, which may be minor to the theorist, but will still be crucial in terms of those consumers' purchasing patterns - markets do not favor the over-complacent.). But these minor investments are a small price to pay for the long-term profits, which brand leaders usually enjoy. Only farm hands make a career out of milking cows, and only fools jeopardize the investment contained in an established brand leader.
The second, and more important is that if you want to overturn this stability, and change the market (or significantly change your position in it), then you must expect to make massive investments to succeed. Even though stability is the natural state of markets, however, sudden changes can still occur and the environment must be constantly scanned for signs of these.
Brand loyalty is more than simple repurchasing, however. Customers may repurchase a brand due to situational constraints, a lack of viable alternatives, or out of convenience. Such loyalty is referred to as "spurious loyalty". True brand loyalty exists when customers have a high relative attitude toward the brand, which is then exhibited through repurchase behavior. This type of loyalty can be a great asset to the firm: customers are willing to pay higher prices, they may cost less to serve, and can bring new customers to the firm. For example, if Joe has brand loyalty to Company A he will purchase Company A's products even if Company B's are cheaper and/or of a higher quality.
An example of a major brand loyalty program that extended for several years and spread worldwide is Pepsi Stuff. Perhaps the most significant contemporary example of brand loyalty is the fervent devotion of many Mac users to the Apple Company and its products.
Market Inertia
On the other hand, one of the most prominent features of many markets is their overall stability - or inertia. Thus, in their essential characteristics they change very slowly, often over decades - sometimes centuries - rather than over months. This stability has two very important implications. The first is that if you are a clear brand leader you are especially well placed in relation to your competitors, and should want to further the inertia, which lies behind that stable position. This will, however, still demand a continuing pattern of minor changes, to keep up with the marginal changes in consumer taste, which may be minor to the theorist, but will still be crucial in terms of those consumers' purchasing patterns - markets do not favor the over-complacent.). But these minor investments are a small price to pay for the long-term profits, which brand leaders usually enjoy. Only farm hands make a career out of milking cows, and only fools jeopardize the investment contained in an established brand leader.
The second, and more important is that if you want to overturn this stability, and change the market (or significantly change your position in it), then you must expect to make massive investments to succeed. Even though stability is the natural state of markets, however, sudden changes can still occur and the environment must be constantly scanned for signs of these.
Related Links:
Ad Rotator
No comments:
Post a Comment