Consumer Brand Loyalty on Electronics Products

Abstract

The concept of consumer brand loyalty has been widely studied by marketers with the intent to generate advertising strategies to attract and retain customers by influencing their purchase intentions. There are several factors like price, innovativeness of product, and service quality, which have a large influence on consumer behavior, leading to brand loyalty. With the stiff competition among global brands, the phenomenon of brand loyalty has been found to be prominent in the consumer electronics industry. Through secondary research and a review of the available previous literature, this study attempts to examine the effect of these factors on building brand loyalty by consumer electronics manufacturers. Four research subquestions were used to identify and examine the relationship factors, which motivate customers to be psychologically attached to specific brands, the correlation between these relationship factors and the customer behavior intentions, the role of behavioral intentions in shaping the attitude of the customers towards brand loyalty and the impact of advertising and publicity in establishing brand loyalty.

Findings of the research indicate a close association of the relationship factors with the motivation of the customers and a strong influence of the behavioral intentions on the attitude for the repurchase of the customers towards some specific brands. The impact of advertising and publicity was also found to be overwhelmingly influencing consumer behavior. The findings support the hypothesis that consumer electronics manufacturers rely on the price, innovativeness of the product, and service quality for building and maintaining brand loyalty. The case of the Sony brand was used to study the impact of these factors on consumer behavior.

Based on the findings, the study concluded that with the advancement of information and communication technology, consumer behavior is influenced by the manufacturers offering them detailed information on the different factors that the consumers take into account for making their purchasing decisions.

Introduction

Context of the Problem

Extending the business on a global level has its own attractions as well as challenges. However, it is a difficult proposition to achieve a completely global presence in all the markets with an identical core value. The decision of an organization to take its brand globally stems from the availability of many strategic opportunities like size and magnitude of the market, displacement of potential competitors, and possible economies of scale, enlargement of revenue and margins, and chances of enhancing innovations. Each of these strategic opportunities has significant implications on the brand of a particular product that such implications are to be given full attention before setting out to explore newer markets. Failure to consider the brand implications may lead to the utter failure of the marketing efforts in the alien soils. Market culture, buyer behavior, current brand loyalties, and many other considerations weigh heavily before any product is being offered on a global level. This is particularly true in the case of electronic products, where there is a need for establishing a powerful brand image that sustains the sales growth of the product under varied market conditions.

The manufacturers of electronic products have to strive hard to establish a strong brand name in the minds of the consumers. Global branding is governed by many fundamental principles like brand recognition, consistency in different forms of identity, emotional dimensions, uniqueness of brands, adaptability to the local market preferences and expectations, and effective brand management. Global brands engage a number of strategic planning moves in the process of reaching their brand positioning, and the objective of this paper is to examine the strategies that consumer-Electronic firms, in general, adopt to create strong brand loyalty.

In the present day, competitive business environment, it is imperative that any firm evolves a strong brand to be successful. It is also equally important that the firm builds customer loyalty around its brands to sustain the competitive advantage gained by it. Without establishing a strong brand power, the firm may not be able to acquire a significant market share. Especially in consumer electronic markets, successful brands like Sony, Philips, Samsung, LG, and others compete fiercely to acquire their market share. The price, quality, and innovative capabilities are the guiding factors to ensure the relative market strength of any brand. In order to get into the minds of the consumers, companies adopt different marketing strategies to promote their brands. In order to promote brand loyalty and sustain it, the firms have to undertake a continuous assessment of the strengths and weaknesses of the brand position in the minds of the consumers. Therefore, the study relating to the creation and sustenance of brand loyalty assumes a greater significance, especially in the consumer-electronics industry, where there is stiff competition among the major global brands. Overall, the assessment of the strength of a brand is critically important for its success. From this perspective, the study of the firms’ ability to build and maintain a powerful brand is expected to provide the necessary insight into assessing the marketing strategies of different global consumer electronic brands and their efforts in the creation of strong brand loyalty.

Statement of the Problem

In the present day competitive business environment, to be successful and sustain its growth, a company has to evolve a strong brand and build brand loyalty around its products. This requires a continuous assessment of the strengths and weaknesses of brand position in the minds of the consumers. In a sense, the study of the success of a brand assumes a greater significance. Therefore, in the consumer electronics industry – where there is stiff competition among the major global brands – the assessment of the strength of a brand is critically important for the success of any player in the industry. From this point of view, the assessment of brand loyalty and the ability of the consumer electronics products to build and maintain a powerful brand will provide the necessary guidance to the other brands to change their strategies so that they also compete effectively. In this context, this study adds to the existing knowledge on consumer brand loyalty with respect to consumer electronics products.

Research Question and Sub Questions

The study attempts to provide theoretical support to the following research question identified: What are the key factors that have an influence on brand loyalty? Therefore, what are the effects of price, innovativeness of products, and service quality on building brand loyalty in the consumer electronics industry?

The research will also address the following research subquestions:

1. What are the essential relationship factors that motivate the customers to become attached psychologically to a specific consumer electronic brand?
2. What is the correlation between the relationship factors and the brand loyalty behavior of the consumers?
3. What is the role of behavioral intentions in shaping the attitudes of consumers towards brand loyalty?
4. What is the impact of advertising and publicity in establishing customer brand loyalty through influencing customer behavior?

Significance of the Study

The consumer electronics industry, global in nature, has been subjected to several changes in the recent past. The industry has shown phenomenal growth with the number of technologies, products and markets introduced. The convergence of technologies has evolved as the recent trend. This has facilitated the development of several consumer electronic appliances like digital televisions, portable media players and games, and educational toys. Digitization has been one of the key drivers of the growth of modern consumer electronic products. Digitization has transformed the consumer electronics sector capable of delivering new and exciting entertainment products changing the lifestyle of people drastically. However, the changes in the consumer electronics industry are driven not by product evolution but by constant changes in the business models. Within the industry, firms capable of bringing rapid changes and developing successful brands have been most successful (e.g., Sony and Samsung). Therefore, branding assumes greater significance in shaping the growth and profitability of different consumer electronics manufacturers. Within this context, this thesis examines the impact of consumer loyalty and branding in the consumer electronics industry.

Research Design and Methodology

This study is based on research on several issues relating to the building of brand loyalty by global consumer electronics firms. The research also covers the relevance of brand loyalty to the successful sales growth of the firms in the consumer electronics industry. The research will be based on secondary sources, and as such, it will draw information and data from previous research conducted in the field of brand loyalty among consumers for branded electronic goods. However, the primary data through a sponsored study by contacting personal interviews and surveys would be ideal for the sake of validity and reliability. Due to the paucity of time and limited scope of this opportunity, the secondary data will be relied upon for the study. Nevertheless, the current study can rely on the primary data collected for previous research in the field as they can be considered as reliable. In addition, a case study on the chosen brand of “Sony” will be presented as a part of the study.

Organization of the Study

In order to have a cohesive presentation, the thesis will be structured to have different chapters. The first chapter following this introductory chapter will introduce the topic under study and will present the research objectives and significance of the study. Chapter two provides a detailed review of the available literature. This chapter discusses various theoretical concepts like brand, branding cycle, brand positioning, brand management, and brand equity.

Chapter three will lend theoretical support to the first research subquestion on the relationship factors that motivate the customers to be psychologically attached to specific consumer electronic brands. This chapter also provides a brief outline of the secondary research methodology adopted for conducting the research on this project.

Chapter four deals with the second research question to examine the correlation between the relationship factors and customer brand loyalty. Secondary research and the review of literature have provided the theoretical support for the discussion leading to evolving a resolution for this subquestion.

Chapter five discusses the role of customer behavioral intentions in shaping the attitude of the customers towards brand loyalty, which forms the third research subquestion. Here again, secondary research has lent the basis of forming the theoretical foundation for resolving this research subquestion.

Chapter six contains the information to support the fourth research subquestion, which deals with the influence of advertising and publicity on establishing customer brand loyalty. The study has used extensive secondary sources to draw the data and information to discuss the theoretical aspects of this research subquestion.

Chapter seven contains the case study on the consumer electronics brand Sony to analyze and correlate the findings of the research. This chapter also includes concluding remarks and few recommendations for further research in the area. The implications of this research are also discussed in this chapter.

Literature review

A brand is a product, service, or concept that is publicly distinguished from other products, services, or concepts. This is in such a way that it can be easily made the concept of the marketing communication and the product can be marketed based on that communication. A brand name signifies the name of a distinctive product, service, or concept. Thus, branding is the process of creating a brand name, and it also encompasses the process of disseminating the brand name so established. It is possible to apply the concept of branding to the organization as a whole or to individual products or services. Trademarks usually protect the brands from the use by other parties. This is accomplished by registering the trademark under any applicable law from any designated authority. Brands are often expressed in the form of different logos, which are graphic representations of the brand.

The brand conveys different messages to different constituencies depending on the perception of the audience. Normally, the ‘brand image’ comprises these complex messages and their associations. As already observed, a brand may have a positive as well as negative impact on the customers and other constituencies associated with the business. A strong brand will have the power to shift the demand for the product to fetch a higher price in the market. For instance, a Harley – Davidson motorcycle, because of its strong brand image, might be able to command a considerably higher price in the market than that of a cheap imitation with the same engineering capabilities and performance. Since brand represents an important asset (as in the case of automobile manufacturers) in all cases, it requires effective management of the brand to sustain the market share.

Concept of brand

The concept of brand encompasses the creation of a name, term or symbol, sign, or design by a firm to be used to differentiate the product or service it is offering to the public from the one being offered by the competitors (Czinkota & Ronkainen, 2004, p 28). A brand is represented by the sum of its equity, identity, positioning, personality, essence, character, soul, culture, and the brand image associated with the particular brand (Upsaw, 1995, p 14). According to Knox and Bickerton (2003), the concept of brand relates to product marketing (p 1003). In product marketing, the creation of a brand and its management assumes the responsibility of establishing differentiation and preference for a particular product or service in the minds of the consumers. Branding has been developed in the last three decades to perform the function of value addition to the product or service by creating the differentiation for the product or service in the particular market.

Hankinson and Cowking (1993) observe that in order to develop and sustain a distinct competitive advantage superior to that of the competitors, it is essential for the firm to build a strong brand so that the firm would be able to maintain its market share for the product. Rooney (1995) is of the view that “branding can be considered as an effective and powerful tool available to the organizations for promoting their businesses” (p 50). When the brand-owners are able to exhibit the better quality of their products, then they can expect substantial payoffs. On the other hand, with mismanagement of a brand, the repercussions are phenomenal and devastating. By building a powerful brand, the firms would be able to create a distinctive market position. This protects the firm against different competitive forces acting on the firm. Branding is broadly recognized as a technique, which is used to build a significant differential advantage. Achieving this branding uses the nature of human beings. Branding cannot be considered as rational in its entirety as human beings attach more meaning and feeling to inanimate things and a random collection of symbols that are contained in different brands (O’Malley, 1991, p 107).

The associations surrounding a firm and its brands are to be considered as very valuable business assets. Product attributes and the benefits a customer can derive from the product are important associations with the brand as they induce the customers to buy a product, and on this basis, brand loyalty is built (Aacker, 1998, p 8). Even though the product attribute can be considered as having a powerful association with the brand, even when a product possesses a key attribute, the product may not take off, as all the competing products will be positioning their brands around that key attribute being an important one. Moreover, there is the likelihood that the particular advantage that can be derived from the product can easily be copied or even surpassed by the competing products. Similarly, a strong product-attribute association will have the effect of limiting the possibilities of brand extension and will seriously hamper the strategic flexibility associated with the brand. Therefore, successful brand creators go beyond the point of representing product-attribute associations and develop other factors like organization association, brand personality, symbols, emotional benefits, and self-expressive benefits as additional associations with brands to make them strong and powerful. (Aacker, 1998, p 8)

The ‘branding cycle’ developed by Hankinson & Cowking (1993) covers the creation and maintenance of a powerful brand (p 5). The branding cycle consists of research, brand proposition, marketing mix, communication triggers, and the consumers (see Figure 2.1).

Brand Personality

In the researches undertaken in the area of consumer behavior, there has been a large focus on the concept of brand personality (Aacker J., 1997, p 23). The outcome of these behavioral researches leads to the fact that brand personality can be considered as a vehicle through which the consumer can make self-expression. According to Belk (1988), brand personality can also be found to be helpful in enabling the consumers to express their actual self, ideal self, or any other specific aspects of one’s self (p 142).

Plummer (1985) remarks branding theories have recognized brand personality as one of the integral parts of branding (p 34). The concept of brand personality takes into account the metaphorical use of brand-as-person for effective communication of the brand and its associations to the consumers (Aacker J., 1997). A brand, which has a lively personality, will make the brand more memorable in the minds of the consumers than one, which is very bland, consisting of a few attributes. Just as the brands represent a part of the capital of a company, the emblems can be considered representing the capital equity of a brand since the emblems are used to make the brand more personal. This personalization is achieved through adopting a visual symbol different from the brand name, which makes the brand lively (Kapeferer, 1997, p 6). The purpose of the symbols is to make the consumers aware of the brand culture and personality. Corporations usually specify the symbols in the form of graphics to make them represent the brand’s personality traits and values (Kapeferer, 1997, p 6).

The concept of brand personality has been in existence for some time. E. Boyle (2003) observes there has been no development of a set of descriptions attached to the brand personality. Brand personality has been considered by many of the researchers and scholars to be representing a combination of demographic features, including age, gender, and country of origin, in the absence of a specific description. However, Aacker J. (1997) compared brand personality with the human personality and developed five brand personality dimensions, which form the basis of the concept of brand personality.

The different dimensions mentioned, along with the other fourteen elements of brand personality, can very well be used to acquire more theoretical and practical knowledge on the antecedents and consequences of brand personality. Among these five dimensions of brand personality, sincerity and excitement appear to dominate the measurement of variances in the personality ratings of brands. These two attributes have been the focus of many of the works in the area of brand personality (Aacker, Fournier, & Brasel, 2004).

Since sincerity and excitement lead the brands into more important fields of interpersonal relationships like warmth, vitality, and status, both are attributes that are considered interesting (Fletcher et al., 1999, p 80). According to Aacker J. (1997), attributes like nurturance, warmth, family orientation, and traditionalism characterize sincere brand personalities. On the other hand, elements like vitality, uniqueness, and independence are associated with exciting brand personalities (p 352). Figure 2.2 illustrates the brand personality framework that comprises all the attributes.

Aacker D. A. (1996) has identified several personality drivers that relate to the product and non-product characteristics. Even the class of the product may also have an impact on the brand personality. For instance, the brand for a bank will assume the stereotypical characteristics of a banker’s personality (Aacker D. A., 1996).

Table 2.1. Brand Personality Drivers

Table 2.1 illustrates the product-related characteristics, which influence the consumer on a psychological basis. In addition, there are other non-product-related characteristics like country of origin, which also have an impact on the behavior of the consumers.

The definition and scale of brand personality, as enunciated by Aacker J. (1997), has been subjected to some criticisms by other researchers. According to Azoulay and Kapferer (2003), the scale evolved by Aaker (1996) does not measure the brand personality in its strict sense. The concept has only made a merger arrangement of a number of dimensions that are associated with the brand identity and has considered the brand personality as one among those brand identity dimensions. Brand identity comprises more facets than brand personality alone. The authors Azoulay and Kapferer (2003) suggest that there should be an encompassing definition of brand personality. While commenting on the definition of Aaker (1997) of brand personality, which says brand personality, is “the set of human characteristics associated to a brand” (p 353), the authors argue that the inner values, physical traits, and pictures of the user of the brands can also be considered as ‘human characteristics’ which can be connected to a brand. Therefore, Azoulay and Kapferer (2003) wanted to redefine brand personality as “the set of human personality traits that are both applicable to and relevant for brands” (p 146). Azoulay and Kapferer (2003) further argue that the concept of brand personality, as described by Aaker (1997), has a different conceptualization, which does not exhibit the real depth of brand personality. The items in the scale-like ‘competence’ and ‘feminine,’ are related to social class and age and are therefore not applicable to brand personality frameworks but would go well in describing the brands.

Brand management

The concept of brand management evinces great interest as the success of any brand depends on efficient management of the brand to contribute to an invaluable asset to the company. Brand management covers the process of managing a brand from the time it is introduced in the market until it is taken off from there. Dalrymple & Parsons (2000) define a brand as “a name, term, sign, symbol or design intended to distinguish the goods and services of one seller from another” (p 14). Tybout and Carpenter (2000) define a brand as “a name or some symbol or mark that is associated with a product or service and to which buyers attach psychological meaning” (p 86). Since a brand includes and represents the perceptions and feelings of the consumers about the attributes of a product, a brand is considered to have much more association with the product than just the name. Kotler (2003) has outlined the implications of building and maintaining a brand. According to Kotler (2003), while the name, logo, color, symbol, design, etc. that are the parts of the brand can be considered as effective marketing tools and tactics, the brand by itself has to guarantee the delivery by the marketer of a particular set of features, benefits, and services on a consistent basis to the buyer (p 12). Kotler (2003) further reiterates that it is for the marketer to ensure that the brand has a mission, and the brand should have a vision explaining what position the brand wants to occupy and what it proposes to do. There are a large number of associations that can be connected to any product either singly or as a combination thereof (Tybout & Carpenter, 2000). Therefore, the marketers are on the lookout for attractive images, which characterize their products and differentiate them from those of competitors. This differentiation normally is dependent on tangible and intangible assets like quality, shape, color, and lifestyle compatibility.

Branding essentially has three elements in its effective creation and management. They are:

1. the first element is the ‘brand reality’ denoting the identity of the product, the ‘niche’ at which it stays, and the special features that distinguish the product from others in the market,
2. the next element is the exposure the brand reality gets by means of effective communication of the brand. This is being achieved by the use of various media through advertising. Public relations and training also help to improve the communication process. However, it is to be ensured that all the communication outlets convey the same message concerning the product, and
3. the third element in the cyclic process of branding is the development of the products that take into account the perception of the public about the brand image of the product. The product development is a futuristic affair, the image is built into the product year after year, and the development is guided by the brand identity. Any change in the image can be expected only incrementally over a period of time, and that too by means of effective communication (Tybout & Carpenter, 2000).

Brand Equity

Establishing and maintaining brand equity is one of the important parts of brand management and maintaining brand equity, therefore, is one of the challenges that any marketer has to face. Hence, it becomes important that there must be a study of the factors that influence the process of building and sustaining brand equity. Therefore, this study needs to have a concise definition of the term brand equity. While a product is being manufactured in a factory, a brand represents something that is bought by the customer. It is easier to copy a product but not the brand, which is unique. While a successful brand has no boundaries of time, a product can become outdated easily (Tybout and Carpenter, 2000, p 82).

Aaker (1991) defines brand equity as “a set of brand assets and liabilities linked to a brand, its name, and symbol that add to or subtract from the value provided by a product or service to a firm and/or to that firm’s customer” (p 12). Kotler (2003) is of the view that the customers’ response often exhibits the effect of brand equity. For instance, the action of a customer showing a preference for one brand over another, which are otherwise identical, or the willingness of the consumer to pay more for a particular brand over another brand can be identified as the brand equity for that product. The assets and liabilities underlying the brand have a strong association with the name and/or symbol of the brand. Despite the challenge that the assets and liabilities representing brand equity may differ according to the contexts, it is still worthwhile to categorize them. (Aaker 1991, p 12) has made a classification of assets and liabilities into brand loyalty, perceived quality, brand associations, and other proprietary assets.

Brand equity has certain competitive advantages, which add to the value of the marketing efforts. The advantages are:

1. it enhances the ability of the company to have more leverage and enhance the bargaining power of the firm with respect to their dealings with the distributors and retailers since the customers expect these channels to carry the brand along,
2. the firm will have the chance of making favorable price adjustments to the product/service as the brand evinces a higher perceived quality,
3. since the brand enjoys higher credibility it enables the firm to have the advantage of easy brand extensions,
4. in case of fierce price battles the firm is guarded through its brand equity to a certain extent (Aaker 1991, p 124).

Greater consumer brand loyalty leads to higher brand equity for the firms.

Figure 2.3 illustrates the concept of brand equity as evolved by Aaker (1991: p 17).

Brand Loyalty

The concept of brand loyalty is closely associated with brand equity since the more loyal the customers are, the higher the value that will be added to the brand. It is true that brand loyalty forms the core of brand equity and therefore needs to be studied with more focus. Brand loyalty has more qualitative aspects than other dimensions of brand equity, as brand loyalty is more closely associated with the experiences of the customer (Aaker, 1991). This makes the market having brands with varying amounts of power and value that depend on the brand loyalty created by the attitudes of the customers towards the product. There are five different levels identified by Aaker (1991) with respect to brand loyalty, which is shown in the appended diagram.

There are different ways of measuring the brand loyalty of the consumers. As shown in Figure 2.4, these methods of assessment are based either on the actual purchasing behavior of the consumers or on the different elements of brand loyalty like the switching costs associated with the product, consumer satisfaction, liking towards the product, and the commitment of the customer.

When properly managed, brand loyalty can evolve as one of the strategic assets of the company, which can be used to provide additional value to the products, and/or the company. Brand loyalty can have a positive influence on the functioning of the firm in respect of (i) reduced marketing costs, (ii) increased trade advantage, (iii) attracting new customers through brand awareness created, and (iv) gaining of time to respond to the threats of competition (Aaker, 1991, p 41).

Brand Awareness

According to Aaker (1991), brand awareness is “the ability of a potential buyer to recognize or recall that a brand is a member of a certain product category” (p 52). Creating brand awareness is one of the critical steps in the promotion of a product. Brand awareness presupposes the likelihood of the recognition by consumers of the existence as well as the availability of the products/services of a particular brand. In promoting commodity-related products, brand awareness is of considerable significance since in these products only there are limited ways of differentiating the products from those of the competitors. Therefore, it so happens that the product, which can command higher brand awareness, is to get most of the market share. For instance, there are virtually no differentiating factors, which could make a generic soda look different from a branded drink. However, the brand awareness of Pepsi and Coca-Cola has made a large impact on their sales due to the brand awareness they have created in the minds of the consumers in terms of their product images and brand names. The higher the brand awareness, the higher the sales will be. Brand awareness also protects the brand from the competition by preventing the competitors, which in the long-run gains more market share.

Brand Awareness among Customers and Consumers

In order to study brand awareness, it is necessary to distinguish between a customer and a consumer. A customer is one to whom the firm sells its products – and in this case, the term includes a distributor or a retail chain. On the other hand, the consumer is the end-user of the product. It is important that brand awareness be created among both the customers as well as consumers. Strong ‘customer level brand awareness’ provides a valuable shortcut in the buying decision process of the customers as the customers may not be able to undertake an evaluation of all the available products. Therefore, they tend to make decisions in favor of those products, which are fresh in the customers’ perception. In most cases, brand awareness has a large influence on the decisions of the customers about the product placement, level of sales knowledge, commitment to the product, etc. It is also true in certain categories of products. The selling environment has more impact on sales than the product itself or its packaging. However, it is to be noted that at the customer level, there are perceptions about other attributes like logistics ability, manufacturing capability, and ability to scale up production, which also weighs apart from the emotional attachment to the products.

At the consumer level, strong brand awareness has a large impact on buying decisions and contributes to improving the brand loyalty of the consumers. It is usual for many of the consumers to go in only a certain chosen group of brands or a single brand in each product range which they buy. It is therefore ideal for creating a ‘buzz’ around the firm’s product, which will create a certain level of excitement about that particular product/brand.

Brand Association

Brand associations signify any aspect of the product that the consumer is able to connect in his memory to the brand. It is quite possible that some associations are very strong in nature, and some of them are very weak. According to Aaker (1991), the brand association can be made stronger depending on the number of experiences or exposures to communication the customer had with the brand (p 57). If the consumer has long experiences with the product, then there is the likelihood that the strength of the association may increase. Similarly, if an association with a product has stronger ties with other associations, it may also result in a stronger brand association.

Dimensions of Brand Associations

Brand association denotes anything that is linked to the memory of the consumer (Aaker 1991, p 52). The term ‘brand association’ is used to reflect the fact of the products being used to express the lifestyles, while other associations may be signs of social positions and professional roles being occupied by people in relation to each other. Keller (1998) defines brand associations as informational nodes linked to the brand node in the memory that contains the meaning of the brand for consumers. Aaker (1991) has identified about ten brand associations. They are:

1. product attributes,
2. intangibles,
3. customer benefits,
4. relative price,
5. use/application,
6. user/customer,
7. celebrity/person,
8. lifestyle/personality,
9. product class,
10. competitors (p 65).

Of these ten elements described, ‘customer benefits’ and ‘product attributes’ are considered as two important ones.

Brand image creativity

The image about a brand that the customer carries in his/her mind always reflects the associations that he/she has with the brand. Brand image has been widely accepted as an important area of research. The importance of brand image is enhanced because organizations use brand image established in the minds of the customers as the inflator of their market share and growth (Roth, 1995, p 166). Good brand image has the effect of increasing brand loyalty. Brand image can be defined as the perceptions about a brand as reflected by the brand’s association in the minds of the customers. Brand image is usually structured as a series of pictures and ideas in the minds of customers that summarize their knowledge of a brand. However, brand image is a strategic device for enabling the concept of brand to be implemented through the exercise of the function of brand management (Roth, 1995).

Brand image can be construed as a way of expressing the consumer’s thoughts on a particular brand. It also encompasses the feelings that the brand arouses when the consumer thinks of the brand. The firm would be able to build its competitive strength based on the characteristics possessed by the brand from the viewpoint of the consumers. Efficient and long-term management of a brand needs a comprehensive understanding of the image the brand carries. The other factor that is considered essential in brand management is to assess the ways in which the customer forms his opinion on the brand, the meaning the customer attaches to the brand, the kind of relationship formed by the customer with the brand, and the manner in which the brand is accepted by the customer. A firm can achieve a successful brand positioning and maximum efficiency in advertising by thoroughly understanding the relationship between the brand and the customer.

Advertising and Consumer Behavior

Advertising, sales promotion, and public relations are the mass-communication tools used by marketers to promote the sale of their products among potential consumers. The mass communication tools have the objective of reaching more people at a lower cost per person. With this objective, the concept of advertising is traded off with personal selling and thus involves the creation of a message that suits most of the targeted audience. However, the definition of advertising has undergone tremendous changes with the proliferation of the business segments and products reaching the masses for consumption on a daily basis. Advertising may take the form of a communication process, a marketing process, an economic and social process, or an information and persuasion process depending on the objective advertising would like to achieve. Advertising may also be defined as a non-personal communication disseminated through different media with the intention to inform or persuade a particular set of audiences. Business firms, as well as non-profit organizations and individuals who would like to communicate on a mass scale, may resort to advertising. Advertising has the purpose of creating a basic awareness of the product or service covered by it in the minds of potential customers. Advertising has four essential features:

1. a verbal and/or visual message,
2. a sponsor who is identified,
3. a delivery through one or more media,
4. payment by the sponsor to the media carrying the message.

The primary mission of advertising is to reach prospective customers with a view to influencing the awareness of such consumers. Advertising is also expected to influence the attitudes and buying behavior of the individuals who are interested in the product or service. In order to be successful, the firms need to understand the underlying reasons for particular behavior of the customers. A study of consumer behavior, their mental and emotional processes, the physical activities of the people who buy the products or services, and the uses to which the product or service is being put all make the fundamental element for arriving at the advertising strategies. The analysis of consumer behavior indicates the reasons for specific consumer behavior and to identify the factors, which influence the customer behavior. The analysis of consumer behavior also takes into account the economic, social, and psychological aspects, which would suggest the most successful marketing mix to the management of business firms. The other purpose of analyzing consumer behavior is to determine the direction in which the consumer choices would go so that the preferences in product trends and attributes of alternative communication methods can be precisely identified.

From an economic perspective, the proportion of advertising expenditure is compared with the sales turnover to determine the amount to be spent for each accounting year. Under these circumstances, the importance of the motivations, perceptions, attitudes, and beliefs of the customers are not taken into account. Generally, the customers are considered to have rational thinking and are expected to follow the preset patterns suggested by established economic theories and financial management principles. However, it is quite apparent that the customers’ behaviors cannot obviously be expected to follow the expected patterns precisely due to various other socio-economic considerations. The proliferation of different consumer electronic brands has led to severe competition among the brands for capturing the highest market share. It, therefore, becomes imperative for the brands to reach out to the customers with different advertising strategies so that they would be able to establish loyalty among the consumers with respect to their respective brands.

Summary

Based on the review of the related literature on the topic of consumer brand loyalty, brand personality plays a lead role in shaping consumer attitudes towards any specific brand. The personality traits of a brand become associated with a brand through the people associated with it, including the user, the company executives, and the brand endorsers. However, Aaker (1997) holds a different view that the contacts people have with a brand develops the brand personality. In the matter of brand loyalty, the review of the past literature reveals that building and managing a strong brand is an essential prerequisite for the development of stronger brand loyalty among the customers. There are a number of factors that influence the creation and maintenance of a strong brand. These factors have the ability to influence the behavioral intentions of the consumers towards specific brands and help in shaping the attitudes of the consumers for making decisions of repurchases. Theory suggests that marketers use the concept of brand personality and the influence of different factors in shaping the customer attitudes in planning their advertising strategies in such a way that the advertisements change the intentions of the consumers. The review gives rise to the hypothesis that consumer electronics manufacturers rely on the price, innovativeness of the product, and service quality for building and maintaining brand loyalty.

Hypothesis

Consumer electronics manufacturers rely on the price, innovativeness of the products, and service quality for the creation and maintenance of consumer brand loyalty in respect of their respective brands.

This hypothesis gives rise to the various research subquestions framed in the first chapter. Through secondary research and the case study of the SONY brand, this study attempts to test this hypothesis, find plausible theoretical support to the research question and subquestions, and report the findings in the following chapters.

Relationship Factors and Customer Motivation

Introduction

The objective of this chapter is to provide a brief outline of the secondary research method and to lend theoretical support to answer the first research subquestion. The research subquestion intends to identify the essential relationship factors that motivate the customers to become attached psychologically to a specific consumer electronic brand. Previous research indicates that the price points, innovativeness of the electronic products, and service quality are some of the essential relationship factors that motivate the customers towards consumer electronic brands. For making the customers change their behavioral intentions of repeated purchase of the same brand, the brand should possess the character of being recognized by the customers. Brand recognition is the term that describes the effect of a certain restriction or a pledge toward the brand by the individual consumer. This implies that the consumer has an emotional or psychological dependence. This dependence is generated by certain brands towards the same product category. This psychological state of the consumer can be observed in the brand loyalty of a consumer in sticking to a particular shop or specific brand. Largely, this depends on the brand’s reputation. In this context, the objective of this chapter is to supplement the research sub-question on the essential relationship factors that motivate the customers to be attached psychologically to a specific consumer electronic brand.

Secondary Research Method

The methodology process of this study entails the collection, organization, and integration of the collected data. Data collection will be the most important step in the success of this paper since it will lead to viable and credible findings. This study will be based on the research on consumer brand loyalty in respect of consumer electronic products. The secondary data alone will be relied upon for the study since the subject matter of the study justified the use of secondary research, which is invariably supported by primary data of previous research.

Secondary research consists of the analysis of information and data gathered previously by other people like researchers, institutions, and other non-governmental organizations. The data is usually collected for some other purposes other than one, which is being presently attempted, or it may help both the collection of data for both the studies (Cnossen, 1997). When undertaken with proper care and diligence, secondary research can prove to be a cost-effective method in gaining a better understanding of the specific issue being studied and conducting assessments of issues that do not need the collection of primary data. The main advantage of secondary data is that it provides the basis for designing the primary research. Often it is possible to compare the results of the primary research with secondary research results (Novak, 1996).

Brand Image and Customer Perceptions

The measure of brand recognition can be reached by observing the range of brands selected by the consumers. Perceptions of consumers have a large bearing on their purchasing habits since consumers often tend to buy products with recognized brands. Such recognition more often relates to their perceptions regarding the brands (Aacker, 1996). Graff (1996) also is of the view that consumers attach more significance to the products of famous brands and think highly of such products (p 490). The brand image is perceived as conforming to the individual personality. When the brand image of a particular product matches more with the personality of the consumers, then the brand gets more recognition from them. It is true that the functional utility of the product mostly determines the benefits gained by the consumer from the product. Nevertheless, there are some explicit characteristics of consumption, which are being influenced by the social behavior of the individuals. Therefore, it follows that product consumption and the diverse consuming behavior of individual consumers contribute to self-affirmation and social recognition.

According to Aaker (1996), it is for every individual consumer to express his distinct individual personality, and normally, this satisfaction of the consumers comprises the “symbolic utility” of products with famous brands. This enables the consumer to gain symbolic and experiential benefits through the consumption of the products. Therefore, the brands themselves (Keller, 1993, p 14). Therefore, there is a constant demand for symbolic consumption within the society. During the process of symbolic consumption, the consumers make their purchasing decisions based on their perpetual preferences. They also focus on the symbolic significance of the products and brands they consume.

Generally, these symbolic products are expected to uplift the self-image of the consumer. They also have the purpose of boosting the role and status of the consumer and group belongingness so that they make the consumer distinguished. If the consumer considers a particular product as important and the product is able to express his/her self-concept or possesses some symbolic or representative meaning, then the product will find a greater involvement from the consumer. Such involvement from the consumer will have a direct impact on the purchase of the product, which in turn will enhance brand recognition.

Smith and Park (1992) provide another view for this concept. The authors are of the view “customers tend to express themselves and uplift their personal images by purchasing products with famous brands” (p 302). Belk (1988) points out, when the consumer owns the product with a famous brand, the product is assumed to convey the self-concept of the consumer. Mere possession of the product with the famous brand is being used by him/her to maintain his/her positive image in the society (p 146).

Relationship Factors and Brand Loyalty

The relationship factors motivate the consumer to be loyal to specific brands. However, no specific consensus has been arrived at or on the definition of brand loyalty. Jacoby and Kyner (1973) have identified the behavioral approach and the attitude-based approach as the two basic approaches in the concept of brand loyalty (p 6). According to the behavioral approach customer, loyalty is construed as a behavior (Jacoby and Kyner, 1973). The main application of the behavioral approach is to make predictions about the choice of the consumer. The proportion of purchases in respect of a particular brand and the frequency of purchases the consumer makes measure the behavioral approach. Despite its interesting contribution to the theory of brand loyalty because of its predictive and descriptive nature, it lacked the ability to explain the complexities of relations. As pointed out by Biel (1992), while the behavioral measures are able to describe the existence of the repeated decisions of the consumers to purchase a brand, the approach could not attempt to reveal what will be the actual outcome of the consumer’s choice as it cannot read the heart and mind of the consumer (p 8). This statement has obviously made a proper analysis and description of the underlying attitudes and preferences of the consumer in establishing the loyalty scenario. Therefore, it is highly likely that attitudinal preferences would precede loyal behaviors. In relation, the attitude-based approach takes the lead in defining customer loyalty as an attitude rather than a function of his/her behavior. Consumer preferences, buying intentions, supplier prioritization, and recommendation willingness are some of the examples of operational measures of attitudinal nature. According to Shankar, Smith, and Rangaswamy (2003), the attitudinal form of loyalty can be taken as providing a higher-order commitment to the firm (p 156). Therefore, it follows that the attitudinal loyalty of the consumers is distinct from behavioral loyalty. There are several relationship factors that influence attitudinal loyalty.

Stages in Brand Loyalty – Impact of Motivation

The psychological factors influencing consumer preferences and their relation to the brands are analyzed through the study of brand loyalty. This perhaps makes sense since the consumer always tends to make his purchase decisions based on a comparison of his personal self to the qualities possessed by any brand. Once he is convinced that there is at least a nearest match between his personal values and the qualities of the brand, then he continues to like the brand and becomes loyal to the brand. Oliver, (1997) has analyzed the steps involved in the evolution of consumer brand loyalty. They are:

1. cognitive loyalty,
2. affective loyalty,
3. conative loyalty, and
4. action loyalty (p 12).

Cognitive loyalty is that part of the consumer’s choice where there exist beliefs that certain brands are preferable to other brands. One source of attaining cognitive loyalty is through prior or vicarious knowledge of the utility or value of the product. Cognitive loyalty can also be achieved based on information gained from the recent experience of the consumer. Oliver (1977) states this particular state of the consumer is shallow in nature.

Affective loyalty, on the other hand, represents a favorable attitude on the part of the consumer. This state reflects a liking developed through the satisfying usage of the products in the specific brand. The commitment of the consumer at this stage is referred to as affective loyalty. This state of mind of the consumer has cognition and affect. While cognition as a state of mind can always be subjected to skepticism and counter-argumentation, the affective stage is more provable and therefore cannot be easily dislodged.

Conative loyalty being in the third position constitutes the further development of behavioral intentions of the consumer. This state of mind is characterized by a deeper level of commitment than in the case of affective loyalty. Conation implies the mental state of the consumer where there exists brand-specific commitment on the part of the consumer to make repurchases of specific brands. Conative loyalty is a loyalty state where the consumer shows a deeper commitment to making repurchases. However, this must be treated as a commitment to the intention to repurchase, and it is more induced by motivation. Under this stage, consumers will have a strong desire to repurchase, which can be equated to any “good intention.” Therefore, the intention or desire would as well be an anticipated one but would remain unrealized. This intention is converted into real action in the action loyalty phase. The motivated intention occurring in the conative loyalty stage is transformed into readiness for performing the action of re-buying. In this stage, the readiness to act is accompanied by a willingness to overcome any impediments that may hamper the action of re-buying. The action control paradigm presupposes that the action phase is accompanied by a strong desire on the part of the consumer to overcome any obstacles, which may have the effect of preventing the act of re-buying. On the repeated happening of this engagement, there develops action inertia, which goes to facilitate repurchases.

Customer Motivation

Customer behavior often forms the basis to infer the motivations to induce the customer to make purchase decisions. Usually, traditional market research can provide much insight into the motivation of the customers by analyzing the factors and product attributes that act as motivators. The market research usually deals with two different types of values:

1. attribute importance and product performance scores,
2. a trade-off analysis.

It is possible to gather the attribute importance and performance scores by conducting consumer surveys.

The product attributes that may weigh with the consumer are:

1. price level,
2. reliability,
3. utility and ability to enhance the productivity for the consumer,
4. relationship to the status of the consumer,
5. usability (the product must be fun to use),
6. innovativeness of the product,
7. service by the manufacturer.

The following figure summarizes the relative positions of the attribute importance and product performance as derived from several consumer surveys in relation to a specific product (Coppock, 2003, p 1). From Figure 3.1, it can be observed that the product represented is viewed by the customers as highly reliable, the product is useful to the customer, it is fun to use, and the product is innovative. On the other hand, the product is viewed as being sold at a high price, it does not offer any enhancement in value to the customer, and the company has a poor service record. However, since the customers have given a low score to the service aspect, it may not be worthwhile to improve this attribute at any additional cost for making the customers make their repurchase decisions. However, since there are strong scores for the product functionality, it is possible to motivate the consumers through effective advertising. This analysis proves the attribute importance and performance as effective motivators of consumer choices.

Summary

This chapter identified the relationship factors that motivate the customer behavioral intentions for getting an affinity over specific brands. Discussion on different forms of consumer brand loyalty led to the conclusion that consumer brand loyalty cannot be built overnight, and the process takes different steps. This chapter described the cognitive, affective, conative, and action loyalty steps. The correlation among the different steps was also analyzed. In each step of the process, the behavior and attitude of the customers determine customer loyalty. Therefore, this made the researchers study the behavior-based and attitude-based approaches to consumer brand loyalty widely. It is observed from the review that employee motivation is dependent upon the attribute importance and product performance scores, and trade-off analysis. This supports the answer to the research subquestion that the price points and innovativeness of the electronic products and service quality are some of the essential relationship factors that motivate the customers towards consumer electronic brands.

Relationship Factors and Loyalty Behavior Intentions

Introduction

Chapter four analyzes the correlation between the relationship factors and the brand loyalty behavior of the consumers, which is the second research subquestion. As observed in the earlier chapters, the innovativeness, price, and quality level of service are some of the factors having an impact on the brand loyalty behavior intentions of customers. This chapter provides theoretical support to the point that there exists a positive correlation between the presence of these factors in specific products/brands and their ability to motivate the customers to develop the attitude to make repeat purchases of the product/brand. Especially in the case of consumer electronics products, the innovativeness and the competitive ability of the brand in terms of price largely determine consumer behavior. Secondary research is conducted to support this premise. Providing efficient and timely customer service and ensuring a high level of customer satisfaction has gained strategic importance for improving the competitive strength of the companies in every commercial sphere. The economic benefits of customer satisfaction and the resultant customer loyalty have been the central focus of many contemporary pieces of research contributing to the theory of customer loyalty and behavioral intentions. Loyal customers help improve the sales of the company by recommending the product/brand to new customers by exhibiting a preference for the products of one firm in preference to those of the competitors. Generally, serving loyal customers would cost less to a firm than canvassing new customers. Retaining customers would be possible for any firm by providing utmost satisfaction to the existing customers. This chapter studies the correlation between the relationship factor of customer satisfaction and customer loyalty behavior intentions.

Customer Satisfaction and Behavioral Intentions

The relationship between customer satisfaction and financial performance has been well established by researchers (Buzzell & Gale, 1987). However, it has been accepted that this relationship is quite complex, and the relationship also involves a number of intermediary links. One of the links that connect the customer satisfaction and financial performance of a firm is the relationship between customer satisfaction, customer loyalty, and behavioral intentions. The concepts of customer satisfaction and loyalty models have received wide attention from researchers and academics. However, studies focusing on the intriguing relationship between these concepts are scarce. The relationship between customer satisfaction and loyalty is said to be non-linear. This implies that when customer satisfaction increases up to a threshold, customer loyalty will go up rapidly. This is true in the reverse direction; when customer satisfaction comes down and touches a threshold, any decrease after that point would meet a fast decline in purchase loyalty of the customer. However, in between these two threshold limits, loyalty remains almost unaltered for any changes in the customer satisfaction level (Coyne, 1989, p 70).

Jones and Sasser (1995) argued that the industry structure is one of the aspects that could explain increasing and decreasing returns of satisfaction (p 92). For instance, in markets where the competition is intense, satisfaction would tend to show increasing loyalty, while any decline in satisfaction would result in a rapid drop in customer loyalty. Therefore, large variations can be found in the loyalty levels of just satisfied and completely satisfied customers. Anderson and Mittal (2000) suggest increasing satisfaction is exhibited when the service performance exceeds more than expectations leading to improved customer loyalty (p 113).

What is Customer Satisfaction?

Oliver (1997) defines satisfaction as “the consumer’s fulfillment response, the degree to which the level of fulfillment is pleasant or unpleasant” (p. 28). The distinction between overall satisfaction and attribute satisfaction has been extensively dealt with by literature. Overall, satisfaction is the product of overall experience with the product/brand and attributes satisfaction and is measured by the performance of individual attributes of the product/brand.

Antecedents of Customer Satisfaction

Customer satisfaction is one of the most important relationship factors because, generally, it is assumed one of the significant determinants of repeat purchase decisions taken by the customers. Basically, it enhances customer loyalty by word of mouth. As a result, this aspect in relation to customer loyalty has been the center of focus in the case of many researchers. It has also been proved through studies that the perceived performance of the product influences customer satisfaction largely (Tse & Wilton, 1988). Customer service is another important aspect that contributes to customer satisfaction and thereby affects customer loyalty. Customer service thus assumes an important role in enlarging the competitive advantage of the firms. Customer service can be defined to include those activities that occur as the interface between the customers and the firm, which enhances or facilitates the sales and use of the products or services of the firm. There are certain empirically derived dimensions of customer service, including responsiveness, assurance, reliability, and empathy, identified by the researchers (Parasuraman, Zeithaml, & Berry, 1988, p 18).

One of the key issues in marketing and practice is the element of customer satisfaction and its influence on the behavioral response. Anderson & Sullivan (1990) observed that the repurchase intention of the customers has a close association with satisfaction (p 4). Theoretically, there are thresholds of satisfaction that extend to change the customer behavior. Customer satisfaction has a strong influence on the purchase intentions and behavior of the customers. Cronin & Taylor (1992) find that customer service quality and customer satisfaction are distinct constructs and those levels of service quality have a significant influence on customer satisfaction (p 58). Though service quality affects purchase intention, the effect is not found to be significant. However, Bell, Auh, & Smalley (2005) found that technical service quality and functional service quality determined customer loyalty and hence the decision to switch carriers. Other researchers treat service quality and customer satisfaction as one.

From the discussion, it follows that customer satisfaction forms the basis for customer loyalty and repeat sales actions by the customers. Customer satisfaction will also improve the willingness to recommend the product or brand to friends and relatives of the customer who is satisfied with the brand/product. The perceived performance of the product or brand has an effect on customer satisfaction. Service quality is one more phenomenon that influences customer satisfaction. By enhancing customer satisfaction, it increases customer loyalty. Customer loyalty results in increased repurchase intentions and the willingness to recommend the product/brand to other people. Therefore, the perceived performance of the product, customer satisfaction, and service quality of the product or brand can be considered to form the basis for customer behavioral intentions leading to customer loyalty.

Behavioral Approach of Brand Loyalty

Initial research of brand/customer loyalty took on a market focus, looking at penetration, repeat buying, brand shares, price elasticity, and other indicators that can be monitored over a period. For the reason that these variables are observable and can be quantified in empirical work, the behavioral approach is widely used to assess the performance of brand loyalty by researchers and practitioners. Ehrenberg (1972) put forward the mathematical NBD/LSD repeat-buying theory to help measure loyalty, which was later supported by Odin, Odin, & Valette (2001). Nevertheless, many researchers have criticized this purely behavioral-oriented stochastic approach. Day (1969) first refers to the issue of true loyalty in the literature. Dick and Basu (1994) support this thought and hold that even a relatively important repeat buying may not reflect true loyalty to a product but may merely result from situational conditions such as brands stocked by the retailer (p 100). Kotler and Armstrong (2001), in their buyer decision model (see figure 4-1), point out that consumers in the situation of low involvement and rare brand difference existed will easily incline to inertia repurchase, which cannot be regarded as brand loyalty.

To sum up, the behavioral approach of brand loyalty focuses on examining the pattern of consumers’ past purchases. Repeat buying as the outcome of brand loyalty are useful variables in empirical research work and practical marketing research to measure, assess brand loyalty and brand equity. However, there are many shortcomings for repeat buying as well. For example, there lie many other factors that could encourage consumers’ repeat purchases, such as consumers’ attitude towards a specific product, sales promotion, inertia repurchasing, retailer monopolization, etc. Moreover, it is meaningless for researchers to observe the repeat buying behavior with only secondary regard to underlying consumer motivations or commitment to the brand (Uncles, Ehrenberg, & Hammond, 1995, p 73). In addition, it is believed in this study that even in some relatively low involvement product categories (e.g., toothpaste, packaged food, etc.), brand decisions are rarely made on a purely arbitrary basis.

Attitudinal Approach of Brand Loyalty

Brand loyalty, defined on the attitudinal approach, is based mainly on consumer motivation (Amine, 1998, p 309). The attitudinal concept of loyalty derives from the cognitive school of thought, where the emphasis is on the role of human thought processes (e.g., stated preference, commitment, and purchase intention) in building loyalty (Bennet & Rundle-Thiele, 2002).

Specifically, researchers define and confirm brand loyalty by assessing the extent to which consumers indicate their positive attitude towards a brand; feel committed to it; memorize product advertising, and are willing to recommend to others (Dick & Basu, 1994). Other related research is also involved in detecting any existing antecedents of brand loyalty. Based on the review of the related literature, the attitude of customers has been found to be a relative attitude. The attitude encompasses a composite phenomenon of purchase involvement and customer perceived differences among brands. In fact, these factors could easily lead to customer loyalty. If the customers, comparing different brands, perceive value for money in any specific brand, they become loyal to that brand. Therefore, the perceived brand differences and the resultant purchase behavior prove to be antecedents to brand loyalty. Donio, Massari, and Passiante (2006) argue that loyalty comes from after-purchase customer satisfaction. Customer satisfaction with the brand/product is yet another factor that enhances the customer affinity to a specific brand. Customer satisfaction is found to be having a large influence on purchase behavior and shaping the customer attitude towards brands. Customer satisfaction tends to have a positive correlation with the loyalty of the customer towards any brand. If there is an increased level of satisfaction that the customer derives from any product/brand, then the customer becomes more loyal to that particular brand/product. Ballester & Aleman (2001) suggest that brand trust is a key variable to generate customers’ commitment and overall satisfaction, which have a positive influence on brand loyalty (p 1240).

The attitudinal approach appeals to many researchers since it is empathetic with the search for strategies to sustain the relationship between consumers and the brand. The relationship between consumers and brands, thus, is enhanced through the attitudes of the customers towards specific products/brands, and the performance of the brand promotes the attitude of the customer towards the brand. The theory states customers possessing a loyal attitude towards any particular brand do not get affected much by any negative information concerning the brand as against the non-loyal customers. In addition, Bennett and Rundle-Thiele (2002) argue that it is of vital importance to marketers to have knowledge and understanding of the attitude towards the act of buying brands (p 200).

The attitudinal approach also has its shortcomings. Although it is believed that thoughts and feelings can be causes of behavior, some scholars argue that other variables such as the social and physical environment as well as personal abilities should be taken into account in the decision system (East, 1997). In addition, it has been widely accepted that loyalty based on attitude may not be more stable than behavioral loyalty. There is validity behind this argument in the sense that behavior connotes a long-term phenomenon while attitude seems to convey a short-term change in preferences. However, behavior forms the basis for shaping the attitude of the customers. However, it is not possible to judge the acceptability of a brand merely based on attitudinal loyalty as attitude-based loyalty does not consider the customer settings fully. Another danger with assuming loyalty based on attitude alone is that such kind of loyalty would not have resulted from a planned choice process but would have followed an impulsive behavior of the customers in making a purchase decision. Table 4.1 presents some of the definitions/opinions of different authors about the part of consumer attitude in the creation of brand loyalty.

Table 4.1. Definition of brand loyalty from the attitudinal approach

Role of Attitudinal Loyalty

Oliver (1999) defines loyalty as an intrinsic commitment available with a customer to indulge in the repurchase of a preferred product or service on an ongoing basis (p 36). The loyal customer would continue to make repeat purchases even under pressure from the situational factors or even against the actions of the competitors to attract the customer. From this definition, it can be observed that there exist both behavioral and attitudinal dimensions to loyalty. However, the past literature has extensively studied and analyzed the behavioral elements of loyalty, ignoring the attitudinal dimensions as well as the relationships with several other constructs, which affect the loyalty behavior of the customers (Chaudhuri & Holbrook, 2001). However, some of the researchers have made a distinction between attitudinal loyalty and behavioral aspects of loyalty (Wernerfelt, 1991). Empirical research conducted in the past supports the theory that attitudinal loyalty and purchase loyalty are related but conceptually different constructs (Rauyruen & Miller, 2007). Customer loyalty may take the form of purchase loyalty, where the outcome is the repeat purchase intentions and behaviors. Dick and Basu (1994) argue that the behavioral definition is “insufficient to explain how and why brand loyalty is developed and/or modified” (p. 100). Behavioral loyalty may turn the customers into spurious loyal customers as the customers may make repeat purchases because of situational constraints such as the availability of only a particular brand in the retail store. Jones and Sasser (1995) suggest that in some instances, government regulations that restrict market competition, high switching costs associated with changing hospitals when treatment is going on, strong loyalty programs like frequent-flier schemes of airlines can lead to spurious liability on the part of the customers (p 92).

Customer Satisfaction and Attitudinal Loyalty

Attitudinal loyalty focuses on the cognitive basis of loyalty. The attitudinal loyalty isolates purchases driven by a strong attitude for pursuing a purchasing initiative from making the purchase due to situational constraints. Strong internal disposition of the customers steers attitudinally loyal customers to commit themselves to a specific product or brand. The extent of customers’ psychological attachments and attitudinal advocacy towards the firm can also be viewed as attitudinal loyalty. Therefore, positive word-of-mouth recommendations, along with encouraging others to buy particular products or brands, become part of attitudinal loyalty (Zeithaml, Berry, & Parasuraman, 1996, p 36).

Research conducted recently indicates that customer satisfaction is an important determinant of attitudinal loyalty (Bennette, Hartel, & McColl-Kennedy, 2005: Rauyruen & Miller, 2007). Attitudinal loyalty is capable of predicting the repeat purchase intentions of the customers through dealing with the process of developing behavioral loyalty. Satisfaction is considered as an affective antecedent of customer loyalty, while attitudinal loyalty is conative. “As conative variables mediate the relationship between affective and behavioral constructs, attitudinal loyalty should mediate the relationship between satisfaction and purchase loyalty. In other words, the effect of satisfaction on purchase loyalty should be indirect, i.e., through attitudinal loyalty” (Ajzen & Fishbein, 1980, p 22).

Case Study – SONY

The relationship factors have a strong influence on promoting a brand and building loyalty around the brand. The case of Sony detailed in this section illustrates this point clearly.

Smart brands always virtually try to provide for everything the customer needs so that the customer is not tempted by the competition. In the case of Sony, it was the ability of the company to grow steadily, with its devotion to technological innovation and to shrug off the defeats. There were some occasions where Sony has to incur huge losses. The company survived these challenges by the sheer strength of its brand and ability to face the challenges through technological excellence embedded in its products. Even when Sony adopts the technology of a rival, the company could quickly customize those technologies to manufacture and market sleek and likable designs to win the customers over the competitors despite its products being costlier than the alternatives available in the market. The business model of the company has not been changed over the six decades of its existence. Sony used its brand image to push many of its products in the market even with the prices running more than the rival products.

A look at Sony’s brand path of the past indicates the reasons for the dominance of the brand in consumer electronics as the brand leader. The brand leadership position was achieved by the brand due to its ability to manufacture innovative products, cutting-edge designs, and the ability to anticipate hidden consumer needs and to cater to them. This philosophy of the company manifested in some of the brand’s key product offerings like Walkman, VCR, and PlayStations.

The fundamental tenet of the brand to maintain its success was its ability to do two contradictory things at the same time. One was the ability to maintain consistency in brand image, brand personality and in keeping the pace in the key performance indicators such as the quality, technical features, and price points. Second is the ability to change to stay in tune with the changing needs and preferences of the customers. Performing these two tasks at the same time is very challenging for any brand. Sony could meet this challenge and could reach an enviable leadership position. However, this task has become tough even for an established brand like Sony. This is because a well-established brand system leads to corporate arrogance and complacency, and this has happened with the case of Sony with the recent decline from its brand position (Roll, 2002).

The discussion above identifies the main element of Sony’s brand image, its efficient brand management, and its technological ability to produce stylish and sensational designs coupled with cutting-edge technology. The company also identified the need to change its target customer groups towards the segment that values the technological superiority of the products. One has to admit that the company had the vision to make a self-analysis of its brand performance and adapt to the required brand and marketing strategies, and that has contributed to the success of Sony to emerge as a global brand. The ability of the company to adapt itself to changes in strategies can be considered as an important element for building its brand image. The development of the brand personality of Sony depended largely on its technical ability, which enabled the company to position itself as the industry leader in consumer electronics. The ability of the company to manufacture quality products with designs and technology that can be appreciated by the consumers who go after other premium brands has enabled Sony to develop a powerful brand personality.

As far as the marketing strategies are, concerned Sony was able to precisely assess the requirements of the customer and adapt to the changes needed. Preparation of the integrated marketing communication that reinforced the emotional bonding between the customers and the brand can be cited as an effective marketing strategy that brought success to Sony to be recognized as the brand leader in the global electronic market. The development of a superior brand and forming of marketing communication teams strengthened the efforts of Samsung in building its brand.

Sony and Consumer Behavior

The understanding of the criteria that consumers use is what marketers take into account while defining their marketing strategies. There are several surrogate indicators like price, brand name, celebrity endorsement, country of origin, color information that are used by the marketers. The customers adopt different decision rules like conjunctive, disjunctive, elimination by aspects, lexicographic and compensatory rules. Under conjunctive rules, customers select those brands that meet a minimum level on each evaluative criteria, and under disjunctive rules, the customers go after a brand that meets the satisfactory level of any relevant evaluative criteria. The consumers adopt the rule of elimination by aspects by ranking the brands based on evaluative criteria and select that brand that has a uniquely high attribute. Under the lexicographic rule, the customer ranks the brands based on the importance of evaluative criteria and selects the brand which ranks the highest on the most important criteria. The compensatory rule enables the customer to select the brand, which has the highest score over all the relevant evaluative criteria.

In this respect, Sony, in the year 2008, has increased customer loyalty through a series of online community-focused features of its website using social media to educate the customers on the use of various electronic items irrespective of the brand. The marketing communication includes electronics-related courses and tutorials, forums and discussion boards, contests, and other features aimed mainly to educate the customers. The site is made interactive so that the customer can derive more information and knowledge not only to Sony’s electronic products but also on the use of other electronic items belonging to different brands. This effort of Sony has had a dramatic change in consumer behavior with more usage rates, increased insight into consumer preferences, and consumer loyalty and advocacy for Sony products. Therefore, there has been an increase in the sales of Sony products month after month.

According to the Cone 2008 Business in Social Media Study conducted by Opinion Research Corporation, 59% of the Americans who are familiar with social media claim that they interact with brands via social media, 41% of the respondents prefer that the companies use social media for soliciting product/service feedback. In addition, 56% of the people surveyed are of the view that they can directly interact with the brands through social media and 37% of them feel that it is for the companies to develop new ways for consumer interaction through social media.

Social media started off by Sony in the year 2003. With the intention of building trust and forge better connections with the brand, Sony strengthened this social media in the year 2008. The specific objectives are:

1. Increasing consumer awareness,
2. Retaining high-value global segments such as “innovation enthusiasts” who would like to have the latest technological features and high-performance levels,
3. Bolstering consumer loyalty and advocacy,
4. Providing increased value to the Sony Electronics business and its retailer base.

From the discussion, it can be seen that Sony has identified the specific ways of influencing consumer behavior to build brand loyalty, and one of the strategies adopted by the brand is the promotion of social media which has proved successful in creating the required level of brand loyalty through influencing consumer behavior.

Summary

This chapter dealt with the correlation between relationship factors and customer loyalty, behavior intentions by distinguishing the behavioral and attitudinal dimensions of loyalty and intentions of the consumer. The findings suggest that the relationship factors have a positive correlation with the purchase intention of the customers either through developing an attitudinal loyalty or a behavioral loyalty. The findings also indicate that customer satisfaction has a strong positive influence on attitudinal loyalty. Attitudinal loyalty, in turn, influences the purchase loyalty and willingness of the consumer to pay more to purchase products of the brand to his liking. Customer attitudes have also been seen as the potential cause of loyal behavior. Therefore, it can be derived from the research that loyalty forms the basis for the determination of sales and profitability, and marketers should take into account this variable for devising their advertising strategies. It is the argument of this study through the second subquestion that the relationship factors do influence the loyalty behavior of the customers. The finding here is that the relationship factors influence the behavioral intentions of the consumers and shape the attitude of the customers to repeat buying of specified brands. To this extent, the relationship factors have a positive correlation with customer loyalty behavior intentions. From the case study of Sony detailed in this chapter, the point that relationship factors have a strong influence on the building and maintaining a successful brand is substantiated.

Role of Behavioral Intentions in Shaping Customer Attitudes

Introduction

third research subquestion deals with the role of behavioral intentions in shaping the attitudes of consumers towards brand loyalty. It is the objective of this chapter to discuss the relationship between the behavioral intentions of the customers and their impact on the customer attitudes, which determine the repeat purchase intentions. In order to assess the impact of consumer behavior on attitudinal loyalty, this chapter analyzes the impact of consumer behavior on their attitudes. This analysis sketches the role played by customer behavioral intentions on changing the attitudes of the customers towards brand loyalty. In the present day context, consumers’ preferences are constantly changing with the emergence of creative and new products and services. In order to address this constant state of flux and reflux and to design an effective marketing strategy for the well-defined consumer goods market, it becomes vitally important that the brand managers have a thorough understanding of consumer behavior. The marketing concept stresses the significance of consumer research and lays the first stone for applying consumer behavior theories into the marketing strategy. From a broader perspective, Blackwell, Minard, & Engel (2001) believe that the research on consumer buying behavior could help to 1) analyze consumers’ increasing influence; 2) educate and protect consumers; 3) formulate public policy, and 4) affect personal policy.

Solomon (2006) suggests that consumer behavior is about studying the processes involved in the selection, purchase, use, or disposal of products or services that are designed to satisfy the needs and desires of the customers (p. 196). The services, ideas, and experiences of the customers also matter in the study of consumer behavior. Foxhall (1991) holds that consumer behavior refers not just to the act of purchase alone. However, it also includes all such activities undertaking prior to and after making the purchases. These activities are interesting to the marketing manager in assessing the demand for the product in the market. It also includes the search for and evaluation of information about the products and brands that might be useful to meet the need or demand so established. On the other hand, the post-purchase activity includes activities connected with the evaluation of the utility of the purchased item and the process of reduction of any anxiety that accompanied the purchase. Consumer behavior shapes up loyalty, and it always depends on the attitude the customer holds towards the repeat purchase of the product or brand. Therefore, behavioral intentions do have a large role to play in the attitudinal aspects of the customer. The objective of this chapter is to study the importance of behavioral intentions on the attitudinal aspects of customer loyalty. In order to study the importance of behavioral intentions in attitudinal aspects of customer brand loyalty, it is imperative that the consumer decision process and the different buying behavior is studied in detail.

Consumer Decision Processes

The process that consumers go through to achieve their decisions is known as the Consumer Decision Process (Walters and Bergiel, 1989). According to Walters and Bergiel (1989), the decision-making process has five recognizable steps, named the classic 5-steps decision process. The five steps are:

1. problem recognition,
2. search for market-related information,
3. evaluation of alternatives,
4. decision on alternatives, and
5. assessment.

Figure 5.1 shows the model developed by Walters and Bergiel (1989), which encompasses both basic determinants (internal) and environmental (external) influences in the five steps process.

Problem Recognition. When consumers realize that they need something, it can be regarded as problem recognition. The ‘needs’ of the customers are looked at in a different way from ‘wants.’ Needs represent the basic requirements of the customers where they look around for available buying options in terms of price, quality, innovation, and other attributes of the product he is looking for. It is necessary for the marketers to build brand loyalty in respect of those products/brands, which satisfy the needs of the consumers. Different consumers have different benefit motivations for purchasing different products or services. Benefits motivations can be summarized in various types such as optimize satisfaction, prevent possible future problems, escape from a problem, resolve a conflict, and maintain the status quo or satisfaction (Walters & Bergiel, 1989, p 45). Moreover, there are two main issues that exist in this step: time risk and financial risk (Kotler P., 2003). Time risk refers to the fact that customers are alerted to the fact that choosing brands in a product category is time-wasting. For example, Underhill’s (2005) research suggests that most consumers spend less than 20 seconds in choosing bread and less than 15 seconds in choosing milk. Actually, most of them just take a few seconds to confirm that they have the ‘right’ product from the shelf. Financial risk refers to the differences between the amounts spent currently by the consumers for a product or service and the amount that would be paid by them for a similar purchase from another retailer or for another brand (Kotler P., 2003).

Search for Related Information. Information collected by consumers is the basis for evaluation and choice behavior.

There are three types of information search:

1. Directed searches. Search for information that will help solve a specific problem;
2. Browsing: just looking with no immediate intent to buy;
3. Accidental search: Passively looking for information, but takes note of information that is formally presented or inadvertently encountered (Walters & Bergiel, 1989, p 45).

As Kotler (2003) points out, the more distinct information sources that consumers are in touch with, the greater level of uncertainty could occur. The uncertainty includes knowledge uncertainty and choice uncertainty. Knowledge uncertainty, according to (Kotler P., 2003), refers to the information of alternatives, while choice uncertainty refers to which alternative to choose. In general, the step of the information search is to reduce the pre-purchase risk, i.e., increase the certainty of the purchase, as well as reduce the negative consequences that would result in unsatisfactory.

Evaluation of Alternatives. This stage concerns the issue of how to choose products and brands from a product category. It involves 1) consumers’ consideration of which characters of a product will be considered in judging products/brands; 2) seek for information regarding some attributes of a product that consumers was ignorant before; and 3) determine how important each of the attributes are (Walters & Bergiel, 1989).

Decision on Alternatives. In previous steps, consumers have formed their personal preferences on brands in an evoked set. As suggested by Mitchell and Boustani (1994), consumer preference is normally associated with the brand, which has the least perceived risk. At the same time, the actual buying behavior would be subject to various unanticipated situations such as the availability of goods and within the time set, temporary cash flow problems, etc. If the desired item (first choice in the product category) cannot be purchased, a substantial risk may be involved. Besides, several more sub-decisions will be made in this step. For instance, consumers should consider where (which store) to buy, as well as the package, the quantity, and the method of payment (Walters & Bergiel, 1989).

Post-purchase Assessment. Consumers’ satisfaction is the integration of the expectation to the desired product and the perceived quality. If performance is below expectations, the buyer will be dissatisfied and will suffer the consequences resulting from the mismatch. This is based on the Cognitive dissonance theory (Festinger, (1957); cited by Solomon et al., 1999).

Types of Buying Decision Behavior

Consumer behavior is affected by many uncontrollable factors, such as culture, social status, personality, etc. While on the perspective of product types, (Kotler & Armstrong, 1999) hold that consumers’ buying behavior is closely related to two elements: involvement and perceived difference. Thus, they divided the buying behavior into four types. Table 5.1 presents the four types of behavior suggested by (Kotler & Armstrong, 1999).

Table 5.1. Four Types of Buying Behavior

Complex buying behavior. Complex buying behavior is one where the individual highly involved in a purchase perceives significant differences among products or brands. High involvement can be in terms of financial, time, risk, as well as self-image –where the product is highly self-expressive. Typically, the individual has to learn much about the product category, which thus results in their information-processing and alternative evaluation behavior.

Dissonance-reducing buying behavior. Dissonance-reducing buying behavior is one where buyers are highly involved in an expensive, infrequent, or risky purchase, while there is little difference between existing brands. In such a case, consumers may shop around to learn what is available but purchase relatively quickly. They may respond primarily to a reasonable price or may decide to purchase conveniently.

Habitual buying behavior. Habitual buying behavior is one where consumers buy products out of habit, e.g., a daily newspaper, toothpaste, or salt. Low buyer involvement and little significant brand difference are the conditions for habitual buying behavior. Consumers in this type of behavior are reluctant to search for extensive information about products, evaluate alternative brands, and make a brand decision.

Variety-seeking buying behavior. Variety-seeking buying behavior is one where the individual likes to shop around and experiment with different products. This kind of behavior occurs in the circumstance and is characterized by relatively low involvement but the observable perceived difference among brands. As such, consumers make brand frequently switching in their perceived brand portfolio. This kind of switching is said for the sake of variety rather than because of dissatisfaction (Assael, 1987).

Composite Approach of Brand Loyalty

Most researchers now incline to adopt the definition of brand loyalty on a composite approach. This thought was originally proposed by Day (1969) and later was supported by other researchers (e.g., Jacoby, 1971; Dick & Basu, 1994).

Jacoby (1971) defines brand loyalty as a repeat purchase but clearly points out that this behavior is a function of psychological processes (p 26). That is, repeat purchase is not just an arbitrary response but also the result of some proceeding factors (for example, psychological, emotional, and situational factors). In his theoretical framework, attitude is a requirement for true loyalty to occur. Consequently, Dick and Basu (1994) explore customer loyalty and argue that loyalty is determined by the strength of the relationship between attitude and repeat patronage. Based on this conceptual framework, they propose four conditions related to loyalty: 1) loyalty; 2) latent loyalty; 3) spurious loyalty; and 4) no loyalty, named loyalty matrix (see Figure 5-2).

In this framework, Dick and Basu (1994) define repeat buying without a favorable attitude as spurious loyalty. Similarly, Allael (1998) conceptualizes brand loyalty as repeat purchase under high involvement and defines repeat purchase under low involvement as inertia. The relationship between attitude and behavior is well accepted among consumer researchers, although this relationship appears to be most likely when applied to high involvement situations (Ajzen & Fishbein, 1980).

Further, some researchers developed models that are more comprehensive. Based on the work by Jacoby & Chestnut (1978), Dick & Basu (1994) on the phrase of loyalty, Oliver (1997) forwards a framework that presents loyalty as comprising four distinct sequential phases. First, cognitive loyalty refers to the existence of beliefs that (typically) a brand is preferable to others. Second, affective loyalty reflects a favorable attitude or liking based on satisfying usage. Third, conative loyalty constitutes the development of behavioral intentions characterized by a deeper level of commitment (e.g., Hennig-Thurau, Gwinner, & Gremier, 2002; Janda, Trochia, & Gwinner, 2002; Zeithaml, Berry, & Parasuraman, 1996). Finally, action loyalty relates to the conversion of intentions to action, companied by a willingness to overcome impediments to such action. Hence, contemporary researchers appear to support frameworks of loyalty that incorporate and integrate both behavioral and attitudinal components (e.g., Aaker, 1991, 1999). However, the Oliver (1997) view has yet to be empirically evaluated. Based on Oliver’s conceptual model, Harris and Goode (2004) tested and gave support to the framework.

Importance of Behavioral Intentions in Customer Attitudes

Intention to repurchase is a behavioral component of loyalty. It depends on the behavioral intention of the customer to make repeat purchases. This forms the basis for creating an attitude for making repurchases. In the attitudinal theories, it is best denoted as distinct from pure attitude to buying and as the best predictor of actual behavior. Similarly, satisfaction is another behavioral component that goes to build an attitude in the customer for making repeat purchases. It also creates an intention to recommend to others. On the other hand, when the product or brand does not provide the expected satisfaction, which is again a behavioral component, such dissatisfaction develops an attitude of complaining. It is already mentioned that satisfaction is a causal antecedent of attitudinal loyalty through a behavioral component of loyalty. Satisfaction, an indicator of met or exceeded expectations, drives recommended and repurchase intentions.

Sony and Buying Behavior

The case study of Sony detailed in chapter 4 presents an illustration of how the brand is developed by creating loyalty among the customers. This section explains the efforts of Sony in influencing the buying behavior of consumers by the positioning of the brand.

An international survey conducted in the year 2006 revealed that Sony is the most popular consumer electronics brand across all ages, genders, and income levels across 18 countries around the world. Sony was regarded as a “luxurious” brand. Nevertheless, the power of the brand appeared to be fading in some of the Western markets, while consumers in countries like UK, Germany, and Denmark did not consider the brand name of the product as an important consideration. However, consumers in emerging countries like Mexico, China, and Brazil considered brand as a very important element in making purchase decisions. It has been observed that large consumer electronics companies provide for generous marketing and advertising budgets to achieve greater market share by influencing the buying behavior of the consumers. Sony has clearly understood that the decision of the consumer is influenced by personal characteristics such as age, life cycle stage of the consumer, occupations, economic situation, lifestyle, personality, and self-concept. There are changes in the products and services the consumers buy over different life cycle stages. Tastes in food, clothing, and recreation are often related to the age and life cycle of the consumer. Keeping this in view, Sony has made a complete overhaul of its marketing strategies to influence the buying behavior of the people.

Apart from the personal factors, social factors like culture and subculture, roles and family, social class, and reference groups also influence the buying behavior of the individuals. Initially, like any other major electronic brand, Sony concentrated on traditional forms of advertising and creating brand awareness. However, since the company found a gap in reaching the consumers at the most critical phase of the buying process, Sony had to approach the potential customers and steer them through the purchase process by influencing their behavior. Sony created the “Sony 101” website with the objective of providing potential buyers with a rich online learning experience. This website provided the customers an extensive knowledge of a wide range of technology with free online courses. The website also provided brand-based lessons accessible 24/7, created online communities, and provided access to the professionals on the subject matter for any clarification. This sponsorship approach influenced the buying behavior of the customers and delivered a higher level of loyalty to the brand. The website also enabled the company to have a new insight into customer behavior with purchase conversion rates of more than 20%. Sony used this opportunity to expose its brand to a key consumer demographic of women who purchase consumer electronics. Similarly, the iVillage sponsorship successfully extends Sony’s own consumer relationship efforts.

Summary

Examining the brand loyalties with respect to its various dimensions is an important area of study that has assumed greater importance in recent periods to understand consumer behavior fully. Based on the previous studies, which have been dealing with the topic of consumer behavior and brand loyalty in a multitude of different respects, this chapter focused on the particular brand loyalty concept under which the behavioral intentions aid the customer to form attitudinal loyalty. Findings indicate that intentions do mediate the impact of relationship quality and theory of planned behavior antecedents on behavior. However, based on previous findings, it is learned that intentions and behavior variables stem from different information sources. Therefore, the shared variance between intentions and behaviors is low. While the need to generate behavioral loyalty has been widely researched, the research on attitudinal loyalty is relatively less. The study hypothesized a higher impact of behavioral intentions on shaping the attitudinal loyalty of the customers. However, the research points out a linear relationship between behavioral intentions and attitudinal loyalty. Theory suggests that the measurement of customer loyalty should be based on both the behavioral and attitudinal data (Jacoby & Chestnut, 1978). It also postulates that both behavioral and attitudinal data guard against each other’s deficiencies. Therefore, it can reasonably be concluded that there is no significant role that customer behavioral intention plays in shaping the attitudes of the customers. Both phenomena act independent of each other, and one supplements the other. The discussion on the brand Sony included in this chapter illustrates the ways in which the Sony brand influences the buying behavior of the consumers.

Impact of Advertising and Publicity on Customer Brand Loyalty

Introduction

The fourth research subquestion considers the issues of the impact of advertising and publicity in establishing customer brand loyalty through influencing customer behavior. This chapter will analyze the previous research on the influence of advertising on brand building and on consumer behavior and will provide theoretical resolution to this research subquestion. Branding essentially has three elements in its effective creation and management. The first element is the ‘brand reality’ denoting the identity of the product, the ‘niche’ at which it stays, and the special features that distinguish the product from others in the market. The next element is the exposure the brand reality gets by means of effective communication of the brand. This is being achieved by the use of various media through advertising. Public relations and training also help to improve the communication process. However, it is to be ensured that all the communication outlets convey the same message concerning the product. The third element in the cyclic process of branding is the development of the products that take into account the perception of the public about the brand image of the product. The product development is a futuristic affair, the image is built into the product year after year, and the development is guided by the brand identity. Any change in the image can be expected only incrementally over a period of time, and that too by means of effective communication.

Advertising – A Background

Advertising is the mechanism used to create a desire for different products in the minds of the customers. Jhally (1987) considers advertising is working to create a false need among the consumers, and in fact, such needs are of the manufacturers rather than the consumers. However, the advertising professionals refute this view by pointing out that the purpose of advertising is to inform the public about the availability of the products in the market. According to Campbell (2000), the consumers do not merely act based on advertising but use their discretion to make decisions in a purposeful manner. Just like the consumption of material items, advertising has the ability to solve the problems being encountered by the consumers with respect to the products. It guarantees the consumers that emotional happiness and well-being within the act of consumption. Anderson (1995) comments this aspect prevents the understanding of the working of the economic world by distracting the attention of the consumers.

Baudrillard (1998) considers advertising as consisting of messages, which describe the products as evidence of ‘miraculous abundance.’ It is the presumption of the advertisers that the consumers have become more advertising shrewdness with the ability to easily identify and reject advertising messages, which have been crafted to create false needs for the products with the aim of selling the products, which the consumers are not in actual need of. The recent phase of advertising has become more sophisticated, which is in line with consumer sophistication. One example of this development can be found in television advertising, where 10-second product advertisements are designed just in the same way as other television programs. According to the experts, this does not induce the consumers to skip them (Fetto, 2000). Another trend in advertising is advertising through internet search engines, where the advertisers pay the search engine company. It is the function of the advertising company to put the advertisements at the top of the recommended websites to catch the attention of the prospective consumers (Lemmons 1996).

Yet another variation of internet advertising takes the form of information on message boards, discussion groups, and newsgroups about the product superiority, and the intention of such mode is to create false peer recommendations (O’Leary, 2000).

Advertising also creates and uses the negative feeling against some practices or actions of humanity and tries to sell the products, which prevent such practices or actions. Anderson (1995) severely criticizes the hypocrisy behind advertising and cites several examples on the score. As cited by Anderson, one example is the promotion of Nike shoes through its advertising campaign as the shoes equate to human dignity and spiritual fulfillment, which is considered more ironic as Nike uses the sweatshops in third world countries for the manufacture of its products.

Another factor, which is incorporated into the marketing strategy, is environmental concerns. The environmental concerns, which are the direct responses to the pressures from the environmental groups or the governments concerned, have been converted into marketing devices through which the companies market their products and maintain their earning levels. For instance, domestic electrical goods companies use the energy-saving mechanisms of their washing machines and dishwashers as unique selling points of their products (Edwards 2000).

Frank (1997) identifies the marketing strategy of the last few decades and includes the creation of hostility among youngsters towards the established tastes and preferences. It is argued that this attitude of the advertisers has enhanced the consumer desirability for frequent changes in tastes and preferences. As Whiteley (1993) rightly puts it, this has created a more rapid pace of changes in designs. This has resulted in the creation of a socio-economic system where the presumption of limitless growth and a continued state of desire prevails among the consumers (Miles, 1998).

Advertising and Consumer perceptions

The consumer perception about the products and the brand distinguishes the high street retailer from a normal one. Retailers adopt various advertising strategies to promote their products, and the consumer perceptions formed based on such advertisements create the positions of high street retailers. Aaker (1991) points out the relative nexus between advertising and consumer behavior based on marketing theories. Therefore, a study of consumer behavior becomes important to understand the impact of advertising strategies on them. Therefore, this study focuses on the review of consumer behavior with respect to different situations and products. It is also important to understand the dynamics involved in the location-based differences in carrying out advertising as far as high street retailers are concerned. This aspect in the advertising by the retailers also forms part of this review. In general, retailers use multifarious advertising media to promote their products. The media used sometimes influences customer perceptions. This review attempts to analyze the impact of various advertising media in changing consumer ideas and buying decisions. The objective of advertising for any retailer is to create brand equity through building consumer brand loyalty. This makes the study of brand loyalty an important part of this study. This chapter will review all other theories associated with the influencing of consumer perceptions to arrive at a conceptualized theoretical framework of the study.

Advertising and Consumer Behavior

Advertising is usually persuasive in nature and has the ability to change tastes. According to Thomassen et al. (2006), retailers consider consumer perceptions of their products and brands before moving forward to define other strategies of marketing like label penetration or other retail marketing initiatives. This has made advertising practices important criteria in the promotion of the business of the retailers. This is even more important in the case of high street retailers because of the nature and quality of products dealt with by them. Advertising gains prominence in view of the competitive edge it can create to the retailers by distinguishing their products. This is due to the close association advertising has with consumer behavior and the role it plays in evolving consumer perceptions about products and brands.

With the advancement of information and communication technology, retailers are able to drive home the salient technical and qualitative features of their products in effective ways for the information of the consumers. This has enhanced the decision-making capabilities of the consumers, which in turn has also resulted in frequent changes in consumer preferences and needs. Comparability of different products and brands is greatly aided by improved advertising techniques and media. This has put more pressure on the retailers to devise suitable advertising strategies to show the superiority of their brands and products over the competitors. Mitchell (2006) identifies different strategies that are being adopted by the retailers, influenced even by the mere location of the retailers.

The role of advertising in the determination of consumer behavior has been subjected to wide research. In the academic literature, advertising has been found to have two different effects according to two varying schools of thought. One of the school advocates explains that advertising is a strongly persuasive force (Barry, 1987; Shankar, 1999). This view is considered as an intuitive view as being expressed by the collective mind. However, this theory has been heavily criticized by some other academicians (Ehrenberg, 1997; Ambler, 2000). Proponents of this theory strongly criticize advertising based on the view that it is not necessary to gather accurate knowledge about the buying behavior and preferences of the consumers through advertising. It is possible to manipulate hapless buyers into parting with their wealth against the products, which they really do not need.

The alternative view holds that advertising can at best be a tool of competition. For a considerable period of almost three decades, academics have been opposing the strong force theory on the ground that such theory does not reflect the mood of all the market sectors and products. According to these scholars, when it comes to the question of matured markets dealing with frequently purchased goods, a good amount of advertising may be resorted to as an attempt just to maintain a market share. In this case, the market usually is highly competitive and fragmented, with the total volume of advertising having no significant effect on the market size. For the current study, this theoretical assumption of using advertising as a tool of competition by the high street retailers for maintaining their market share will be focused on.

Villas-Boas (2004) considers advertising to have the effect of influencing the aggregate demand, as the consumers will start thinking of buying any product or service only when some advertisement of the product or service reaches them. According to the author, the cost of advertising will have its own impact on the optimal number of products being sold as well as the levels of quality of the products, which are differentiated vertically. It is a commonly accepted fact that advertising will have an impact on consumer behavior in different ways. There is the informative role of advertising advocated by several research scholars (e.g., Stigler (1961), Telser (1964), Nelson (1970, 1974), Stigler and Becker (1977). Others have debated on the persuasive role of advertising (e.g., V Dixit and Norman (1978), Kotowitz and Mathewson (1979), Shapiro (1980), Schmalensee (1986), Becker and Murphy (1993). The fundamental difference between an informative and persuasive role of advertising is brought out by the fact whether the consumption utility of the consumer can undergo a change by a possible change and the weight of consumer preferences because of advertising. The impact of advertising on price elasticity could be varied based on the underlying effect of advertising. Banerjee and Bandyopadhyay (2003) recently have developed the study of a dual role of advertising and have found different ways of modeling the effect of persuasive advertising on consumer preferences (p 135).

Purpose of Advertising

In a majority of cases, advertising is undertaken primarily with a view to developing consumer value in their brands. Most of the advertising is made just to promote the brands except in the cases of advertising covering political, public service, or charity purposes. Brands are developed and advertised to deliver choice, innovation, confidence, and consumer value. Brand assets of the companies usually carry larger values. They are represented by the value of most of the businesses rather than the value of their tangible assets. Therefore, the success of a company is largely facilitated by the ability of the company to establish brands that can deliver higher levels of customer satisfaction as against the other brands competing with the brands of the company. Based on this view, advertising can be considered as a tool of brand competition. The concept of brand competition places the consumer in a commanding position and makes the businesses depend on the consumer’s choices.

In the matter of building and maintaining brands, advertising performs a number of functions like:

1. creating awareness among the consumers,
2. communicating the attributes and benefits of the products effectively to the consumers,
3. refreshing the minds of the consumers and reminding about the brand to enhance the awareness,
4. creating a brand equity
5. contributing to loyalty to a brand over a period.

In effect, it can be stated that advertising does not persuade the consumers to do something which they would not like to do or buy something that they do not want to buy.

Marketing Theories

Homans (1974) constructs one of the theories (p 73). This theory involves concepts of reward frequency, reward value, the critical mass of rewards, and approving behavior. The approving behavior model is being used for analyzing and describing consumer loyalty. According to the model, wherever there is a greater value of rewards being received by the buyer, there will be a stronger display of approving behavior. Another model developed by Levy and Zaltman (1975) uses six types of social changes, a table involving time and societal levels to explain the social changes, which corporations take into account while marketing their products. “These include attitude and behavior change, normative and administrative change, invention/innovation and revolution, life-cycle change, organizational change, and socio-cultural revolution” (Levy and Zaltman, 1975, p 22). Similarly, marketing pricing strategies cannot be overlooked while detailing the advertising strategies of any product. However, the image projected of the product would automatically change, making a positive influence on the mindset of the consumer. This change often equates to a change in quality and prestige, although there may not be any significant variation in the utility or comfort.

According to Marchand (1985), there are eight hidden needs of the consumers, which need to be satisfied with the products they select for buying, which the marketers use for their product marketing campaign. Some of the needs are: selling emotional security, assurance of the worth of the product, ego-gratification, sense of power, and sense of roots. By emotional security, the consumer is provided the satisfaction that the purchase of a product would give the consumer a dependable utility. Reassurance of worth, ego-gratification, and a sense of power is the inner feelings of the consumers which identifies the self-esteem of the consumers as related to other people. A sense of roots refers to the better part of lives of the consumer may be relating to their younger periods.

Huitt (2002) refers to the findings of Maslow, a researcher in psychology who advocated the presence of a distinct hierarchy of human needs, which could influence human behavior. According to Maslow, there are deficiency needs and growth needs; deficiency needs include physiological, safety, belongingness, and love. The growth needs are activated only when the deficiency needs are met fully. Maslow recognized self-actualization as the only “growth need.” “This need is defined as realizing one’s potential, being concerned about personal growth, being problem-focused and appreciating life” (Allegience Telecomm, 2003).

Perhaps the advertisers and marketers use these needs in their advertising strategies by which they would like their potential customers to feel good by purchasing their products. In fact, these eight needs are subtly included in the advertisements to show how a product could make the consumer happy by meeting the needs. The broad strategy under which the marketing works is that if the consumer feels that he needs to be appreciated and feel a part of the group and if a product will be able to meet these objectives, then the consumer would not hesitate to buy the product (Marchand, 1985). However, it is vitally important that the companies think of advertising strategies, which promote the satisfaction of the needs having a direct connection with the product. It is for the advertisers to create advertisements having the effect of capturing the attention of the customers and making them feel that the advertisements are intended for interacting with them only. Thus, the advertisements should represent the current social conditions of the times during which the advertisements are displayed. This would make the advertisements, which were relevant six months back, irrelevant now. According to Marchand (1985), the advertisements should present a picture of life, which the consumers would like to live in, or at best, they can identify themselves.

It is possible that all the above-discussed marketing theories can be combined with a discussion of priming effects. According to Pan and Kosnicki (1997), priming theory is based on the media coverage of an issue, which describes the important feature of that issue in the content of the media. Miller and Krosnik (1997) point out priming can be invoked by drawing the attention of the consumers to an issue or object without taking a position on the issue.

Process of Brand Building

The building of a brand with a view to influencing the purchasing decisions of the customers by creating loyalty for the product/brand is a complex process. Several behavioral considerations come in building an effective brand. A careful assessment of consumer behavior is the key factor in building a successful brand. The objective of brand building is to establish a brand association in the minds of the consumers around which loyalty can be developed. Effective brand management calls for building a strong brand by the firm for its products. There are various steps involved in building a successful brand. The steps are enumerated below:

1. Identifying the brand with the customers and associating the brand with the customers’ minds with a specific product class or customer need.
2. Establishing the totality of brand meaning in the minds of the customers by linking a host of tangible and intangible brand associations with some properties of the products.
3. Eliciting the proper customer responses to the brand identification and brand meaning.
4. Converting brand response to create an intense active loyalty relationship between customers and the brand (Marchand 1985).

Sony and Advertising

Advertising has contributed to the promotion of Sony as a successful brand, as in the case of any other brand. This section enumerates the advertising strategies of Sony in building the brand.

The success of advertising by Sony is ensured through its understanding of the concept that developing an advertising strategy to achieve the objectives of an advertising campaign requires that the brand needs to consider not only the message that the advertising conveys but also the media that is being used. An advertising campaign will become successful only when the message it conveys is meaningful and appealing to the targeted audience. With the increase in the number and nature of advertising, it is important that a successful advertising message stands out among the cluster of advertising. Sony has made use of creative, imaginative, and innovative advertising messages such that they convey the maximum of information to the users. The advertisements by Sony always had “big ideas” addressing the key benefits sought by the target audience. They also motivate the audience to pay attention. Sony has been in the constant search for new ways to appeal to the target audience to provide meaningful content to audience.

Being an international brand Sony has established the necessary links between consumers and the brand. Brand association implies attaching the objects of material world influence onto the purchasing decisions and processes. The primary task of advertising is to change the brand meanings in the minds of the consumers. Advertising attempts to attach meanings to brands, and these meanings are subjected to interpretation by the target audience in the light of their motivation and aspirations. The ultimate goal of advertisers is to develop strong brand association networks for brands that will suit the values and motivations of the targets. The different aspects of the brand for Sony, which create an association in the minds of the consumers are:

1. The brand name and the visual image of the brand with the logo, brand properties, and other aspects that can be easily recognized,
2. The products linked with the brand,
3. Product attributes like technological excellence and innovativeness of the products,
4. Benefits or rewards for the buyer, implying the advantages the products carry to the buyer,
5. Places, occasions, moments, moods associated with the products and
6. Product values.

Sony has been able to turn products into brands by developing strong association networks in the minds of the customers by adding value to its products. The values created by Sony differentiate itself from others in the market, related to the cultural mindsets of the target groups as well as the cultural mindset of the advertising strategist. The matching between the values in the advertising message and the values of the receiver turns the advertising into success. A normal problem with global advertising brands is the cultural mismatch, which would kill the effect of advertising. However, Sony could overcome this problem by doing fundamental research on the effectiveness of the advertising to create meaningful associations on a global basis and reflect the role of the products in the lives of the people.

Summary

This chapter presented a detailed analysis of the impact of advertising on customer behavior and attitudes. Building brand loyalty thus is seen as an important prerequisite for successful brand associations and resultant brand loyalty. With a generalization of the results of the secondary research, it can be concluded that advertising influences the customer through the cognitive aspects. Cognition is generally related to the fact that the individual perceives the information received through senses, perception, attention, memory, and reasoning language. The most important function of advertising is to distinguish the product or service advertised and to attract the attention of the customers with a view to sustaining the attention. Based on the theoretical analysis, the customer reaction to advertising can be evaluated on cognitive, emotional, and behavioral approaches. The attention of the customers under a cognitive psychological approach is mostly influenced by advertisements in press and brochures. The emotional influence also equally influences the attention of the customers because the advertising causes positive feelings to them. From a behavioral angle, advertising makes a psychological impact on the customer. With this analysis, the fourth research subquestion on the impact of advertising and publicity in establishing customer brand loyalty through influencing customer behavior has been lent the necessary theoretical support. The success of any brand depends on the loyalty it creates among the consumers through effective marketing communication. Sony provides the best example of this phenomenon.

Discussion and Conclusion

Introduction

The current study on consumer behavior in the electronics industry covered the establishment of brand loyalty and the impact of advertising on building consumer brand loyalty. Through secondary research, the study attempted to elucidate the importance of building brand loyalty by the major consumer electronics manufacturers to sustain the market growth amidst stiff competition from other global brands. From the point of view of assessing the competitive strengths of various brands operating in the industry, the assessment of brand loyalty and the ability of the consumer electronics products to build and maintain a powerful brand would be a useful guide for the brands to improvise their marketing and advertising strategies to have enhanced customer loyalty. The study was expected to add to the existing knowledge on consumer brand loyalty with respect to consumer electronic products.

The objective of the study was to provide theoretical support to the research question on the key factors that have an influence on brand loyalty. The study also strived to examine the impact of price, innovativeness of products, and service quality on building brand loyalty in respect of consumer electronics products. In addition, the study also examined the relationship factors that motivate a psychological association of the consumer with different consumer electronic brands and the correlation between the relationship factors and brand loyalty. The study also attempted to examine the role of behavioral intentions in shaping the attitudes of consumer loyalty and the impact of advertising and publicity in establishing customer brand loyalty through influencing customer behavior.

This study has been conducted to research several issues relating to the building of brand loyalty by global consumer electronics firms. The research covered the relevance of brand loyalty to the successful sales growth of the firms in the consumer electronics industry. The research was based on secondary sources and drew information and data from previous research conducted in the field of brand loyalty among the consumers for branded electronic goods. Even though the primary data would have been ideal for the sake of validity and reliability, due to the nature of the topic studied, the secondary data has been relied upon for the study. In addition, a case study on the chosen brand of “Sony” has been presented as a part of the study.

Summary

Evidence-based on the current research suggests the positive correlation between customer satisfaction and loyalty. Satisfaction has been found to be one of the means of achieving strategic ends of customer loyalty and retention, which have a direct impact on the profitability of the organization. The study reveals that in order to improve the business performance, it is imperative that customer satisfaction is measured properly and managed efficiently. This has acquired significance in view of the fact that satisfaction is identified to be the key for customer loyalty leading to retention of the customers.

This research supported the conclusion drawn by Oliver (1999) and others that loyalty is a deeply held commitment on the customer side. This commitment is to exhibit the intention of making repurchases of a specific product or service consistently over time. The intention to repurchase should not be hindered by any situational influences. The study identified several relationship factors responsible for contributing to the behavioral intentions of the customers. The central research question relates to the identification of the factors that have an influence on customer behavior and steering the customer intention towards loyalty behavior. Customer satisfaction in consumer electronics products is identified in terms of the innovativeness and cutting edge designs of the products, price points, and the level of service quality. The case study on the Sony brand substantiates the importance of these factors in building up a good brand reputation. In addition, the case study of Sony supports the hypothesis that “Consumer electronics manufacturers rely on the price, innovativeness of the products and service quality for the creation and maintenance of consumer brand loyalty in respect of their respective brands.” Customer satisfaction measured in terms of the value derived by the customer by the comparable quality and price of the products has a tremendous effect on improving customer loyalty. Through secondary research and the case study of the Sony brand, this study has provided theoretical support to the hypothesis that in the case of consumer electronic products, the innovativeness of the product, price points, and the level of customer service will influence customer loyalty largely.

The first research question aimed to find theoretical support for the identification of different relationship factors that motivate the customers to become attached psychologically to specific consumer electronic brands. Symbolic consumption is one of the factors identified to have a large influence on consumer preferences. Consumers feel elated when they consume goods belonging to certain brands, and these products have been found to uplift the self-image of the consumer. Similarly, consumers tend to buy famous brands with the intention of uplifting their personal images through the consumption of such products. The behavioral approach and attitudinal approach to consumer loyalty have also been found to provide the theoretical base for identifying the relationship factors. Oliver (1997) has identified cognitive loyalty, affective loyalty, conative loyalty, and action loyalty as the different steps involved in the evolution of consumer loyalty. Influencing customer behavior, product attributes form the basis for motivating the consumers. Product functionality, the importance of the product to the customer, and the performance of the products are some of the attributes that motivate the customer.

The second research subquestion of the correlation between the relationship factors and the customer loyalty behavior intention has provided evidence to prove that the relationship factors have a positive correlation with the brand-building leading to better brand positioning of the product/brand. The case study of Sony again provides an example of this connection. Several product attributes and behavior patterns studied by the past research have been analyzed by this study to arrive at a conclusion about the existence of the positive correlation between the relationship factors and consumer loyalty behavior. In this connection, the different stages in customer loyalty, as suggested by Oilver (1997), were studied, which substantiated the finding as at every stage, the relationship factors leading to customer satisfaction determined the customer loyalty intentions. The different product attributes, as explained in the text, lend additional theoretical support to the proposition.

The third research subquestion was to examine the role of the customer behavior intentions on the attitudinal loyalty of the customers. Secondary research and a review of the related literature have led to the conclusion that customer loyalty is often determined on the basis of what people think and say and what they actually do when it comes to the question of making repurchases. This gives rise to the distinction between the cognitive and affective components of loyalty, and because of this precise prediction of customer’s choice, actions could not be made. Therefore, theory suggests that there should be a distinction made between customer behavior loyalty and attitudinal loyalty. In fact, customer loyalty has to be measured by taking into account both the behavior and attitudinal loyalty data. Though the research subquestion hypothesized to find out the impact of the behavior loyalty on the attitudinal loyalty, the study based on the finding concludes that the attitude or intention and behavior cannot be used interchangeably as they are in a non-linear relationship with each other.

The fourth research subquestion deals with the impact of advertising and publicity have on the shaping of customer loyalty. Through the research is on secondary sources, it was established that the impact of advertising on consumers could be examined from cognitive, emotional, and behavioral approaches. Since the advertisements influence the emotions of the customers, they have the ability to affect their behavior. With positive information fed into the minds of the consumers, a brand image is created, which ultimately leads to brand loyalty. With the improvements in information and communication technology in the recent past, marketers are able to devise advertising strategies that could completely change customer attitudes towards brands.

In the consumer electronics industry, the impact of advertising and publicity is very high. Since the customers have also become more knowledgeable with more detailed product information obtained through the internet, the brands have to perform to the satisfaction level of the customers. This enhances the impact of advertising on changing customer behaviors. The consumer electronic products have to necessarily keep in pace with the latest technological developments and use them in introducing innovative products into the market to sustain their competitive strength. This aspect has been proven by the elevation of Samsung as the brand leader in many segments of the consumer electronics industry in preference to Sony in the recent past.

Conclusion

Examining the brand loyalties with respect to its various dimensions is an important area of study that has assumed greater importance in recent periods to understand the consumer behavior fully and take suitable marketing decisions to improve the competitive strength of the organizations. Primarily, because the previous studies have been dealing with the topic of consumer behavior and brand loyalty in a multitude of different respects, with a large emphasis on the factors affecting brand loyalty, this study has focused on the development of brand loyalty by global consumer electronic brands. The study has also focused on the particular brand loyalty concept under which the consumers behave to consider their loyalty to different brands at the same time.

With the advent of economic globalization, the products are being sold not only locally but also on national and international levels. Under such circumstances, the characteristics of consumer brand consciousness are considered vitally important when the products are advertised and marketed by the manufacturers, especially in the electronic products segment where there is high volume and low margin. Moreover, the consumer electronic products market is subjected to stiff competition from different brands, and to achieve success in the midst of such competition, it requires the companies to equip themselves with the changing customer preferences and needs so that the manufacturers can adapt their production according to the changing demand. This requires a complete and thorough study of consumer behavior.

Consumers exhibit varied characteristics and market behaviors, and their purchasing habits are often influenced by different orientations because of the nationality of the consumers. This fact is an essential factor to be considered in assessing consumer behavior with respect to any product. As this study explored, there are different factors like the product designs, price range, innovations, and advertisement and sales promotion activities according to previous research that have a significant impact on building and maintaining brand loyalty by the consumer electronic brands.

Apart from these factors identified to have a significant influence on the shopping behavior of the consumers, there is ‘brand loyalty,’ which also plays a significant and important part in deciding consumer behavior. There are a variety of situations and factors, which lead to the development of brand loyalty in favor of a particular brand, which has also been dealt with elsewhere in this study.

The secondary research and the case study of Sony reveal that organizations have been able to build a successful brand by sheer product innovations, affordable price range, quality of the products, and its advertising strategies, as evidenced by the secondary research conducted under the study. Therefore, the study concludes the price levels, technological excellence through innovations are some of the relationship factors that motivate consumer behavior and make them psychologically attached to particular brands.

A close correlation has been identified between the relationship factors and consumer brand loyalty. The relationship factors influence consumer behavior largely to lead to the development of consumer brand loyalty. The study has also identified that there is no direct impact of the behavioral intentions of the consumer on developing attitudinal loyalty. In the matter of advertising and publicity, the study based on secondary research concludes that advertising and publicity feed positive information into the minds of the consumers and creates a brand image, which ultimately leads to brand loyalty.

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