Importance of Brand Loyalty - Literature review Example

RBUS 2900 Assignment 1 Topic 6 Brand Loyalty Table of Contents 1. Introduction 2. Research Design Characteristics 2.1 Research Objective(s) 2.2 Theory/Framework 2.3 Hypotheses 2.4 Variables 2.5 Research Design 2.6 Methods of Data Collection 2.7 The Research Environment 2.8 Time Dimension 2.9 Researcher Control of the Variables 2.10 Main Findings 2.11 Limitation of the research 2.12 Future Research Directions 3. Summary of Articles 3.1 Xiang (Robert) Li and James F. Petrick (2008) 3.2 Maria Antonietta Raimondo, Gaetano "Nino" Miceli and Michele Costabile (2008) 3.3 Ki-Joon Back (2005) 4. Discussion 5. Conclusion 6. References 1. Introduction Over the last decade, since the economic growth has made a very significant leap in progress, the topic of brand loyalty has triggered a very important role. It has garnered unprecedented research attention over the last few years. Albeit considerable loyalty research has been conducted, the factors that determine customers’ loyalty to a brand is yet to be uncovered (Xiang (Robert) Li and James F. Petrick). Hence, the need to identify the determinants of customer loyalty has stimulated an extensive research stream, which has shown how constructs such as satisfaction (Maria Antonietta Raimondo, Gaetano "Nino" Miceli and Michele Costabile). Research reveals that customers favor a specific brand if they have applied a certain set of personality attributes, which match those in their own self-image (Ki-Joon Back). Therefore, brand loyalty paves the way for superior market share when the same brand is repetitively acquired by consumers, irrespective of situational restrictions. Hence, this report attempts to analyze and summarize the research design characteristics from the three articles, critique their strong points and weakness and then makes some suggestion to the future studies. 2. Research design characteristics 2.1 Research Objective(s) I investigate the moderating role of product involvement in the customer satisfaction-loyalty relation. 2.2 Theoretical framework A considerable amount of research has investigated the relation between customer satisfaction and loyalty. 2.3 Hypotheses In this paper, we assumed that cosmetics are typical of high-involvement products and that household goods were representative of low-involvement products. 2.4 Variables In this context, a brand attitude can be described as a variable in the research design. 2.5 Research Design This paper forms the basis to answer questions like how and when brand attitudes affect the customer satisfaction-loyalty relation. 2.6 Methods of Data Collection The data for this paper was collected through customer satisfaction survey (questionnaire) and direct interviews with the participants. 2.7 The Research Environment The data were collected in a commercial satisfaction survey conducted in South Korea and participants were drawn from two communities: a big city in a metropolitan area and a small city in a suburban area. 2.8 Time Dimension Cross-sectional studies are carried out once and signify a snapshot of one point in time. 2.9 Researcher Control of the Variables And attempt is made to control the variable - brand attitude in this study. 2.10 Main Findings The findings are that product involvement decreases the direct effects of satisfaction on brand attitudes and loyalty, but increases the indirect effects of ad attitudes and corporate image. 2.11 Limitation of the research The study is just confined to participants from two communities in South Korean and participants were identified eligible only if they had purchased and used the brand during the past 3 months. 2.12 Future Research Directions Future studies should include durable goods such as electronics and automobiles to compare the effects of the variables concerned between consumer goods and durable goods. Future research on a specific product category should take into consideration category-specific relations among constructs, since, other relations might be important. 3. Summary of Articles 3.1 Johannes Hartmann and Howard R. Moskowitz (2007) According to Johannes Hartmann and Howard R. Moskowitz (2007), the authors reveal the critical antecedents of cruise passengers’ brand loyalty by introducing IM to the field of tourism. To develop the hypotheses, the authors suppose that attitudinal loyalty to a cruise brand will be significantly and positively influenced by his or her satisfaction level. And to test the hypothesis, the authors applied the online panel survey approach – a survey questionnaire to analyze. Coming to the findings, they suggest that IM might provide helpful direction in unifying the apparently segregated literature. In other words, the three determinants of interpersonal commitment worked well in a consumer-brand scenario, and uniquely predicted attitudinal loyalty, which led to behavioral loyalty (Johannes Hartmann and Howard R. Moskowitz, 2007). 3.2 Maria Antonietta Raimondo, Gaetano "Nino" Miceli and Michele Costabile (2008) This paper investigates the influences of relational equity, that is, the customer perception of distributive justice within a constant customer-provider relationship, on attitudinal loyalty and behavioral loyalty. Through the hypothesis that relational equity positively influences both attitudinal and behavioral dimensions of customer loyalty, the authors find that the positive effect of satisfaction is enhanced by relationship age, and the effects of satisfaction and trust depend on relationship orientation. Furthermore, the authors used personal social networks, a questionnaire containing the relevant measures were given to obtain the data. The authors find that the positive effect of trust is decreased by relationship length, and the outcome of fulfillment is augmented by association age effect of payment equity, decreased by relationship age. 3.3 Ki-Joon Back (2005) In this study, the author explores the effects of image congruence on customers post-purchasing behaviors spotlighting exclusively on customer satisfaction and brand loyalty in the lodging industry. In addition, some relational hypotheses were applied by the authors in the hypothesis development. Accordingly, CS (notion of satisfying the needs and desires of consumers) is a positive function of social IC (Consumer behavior toward a specific brand is highly influenced by the brand image and how it matches the self-images of target customers). Furthermore, the author applied the communication method in the data collection and uses the questionnaires for the survey. The main findings demonstrate that attitudinal loyalty has a meditating influence on the relationship between behavioral loyalty and antecedents studied. Social and ideal social image congruence has noteworthy straight effects on customer satisfaction and tortuous effects on attitudinal brand loyalty. 4. Discussion Reviewing these three studies have some similarities. Both of the authors claim that relational equity optimistically powers both attitudinal and behavioral dimensions of customer loyalty and attitudinal loyalty to a brand will be significantly and definitely influenced satisfaction level, while Guy Culshaw claims that CS (notion of satisfying the needs and desires of consumers) is a positive function of social IC (Consumer performance against a particular brand is highly powered by the brand image and how it is in sync with the self-images of target customers). Maria Antonietta Raimondo, Gaetano "Nino" Miceli and Michele Costabile and Ki-Joon Back used questionnaire to complete the research activity, Xiang (Robert) Li and James F. Petrick particularly used the online survey method through personal social networks to obtain the largest possible sample. In addition, they have the same research environment—field studies (i.e., survey research), same research design—causal research, and same longitudinal studies of time dimension and all the researchers apply the ex post facto design to control the variables. Admittedly, there still have some strength in the studies. Xiang (Robert) Li and James F. Petrick found that IM may facilitate helpful direction in joining the seemingly segregated literature. The three factors of interpersonal obligation worked well in a consumer-brand scenario, and distinctively guesstimated attitudinal loyalty, which led to behavioral loyalty, while Maria Antonietta Raimondo, Gaetano "Nino" Miceli and Michele Costabile finds that the positive outcome of contentment is augmented by relationship age and the effects of satisfaction and trust reply on bonding course. Ki-Joon Back uncovers that social and ideal social image similarity has major direct effects on consumer satisfaction and indirect effect on attitudinal brand loyalty. Nonetheless, the theories still have some differences between them. They have different variables to be included in their research data. Also, the theoretical framework under which these articles were conducted were also completely different. On the other hand, some weaknesses in these studies are worth to mentioning. In Xiang (Robert) Li and James F. Petrick (2008) research method, the online panel survey approach precluded cruise passengers who do not have Internet access or technology skills. Also, the study did not consider differences in cruise lines. Moreover, Maria Antonietta Raimondo, Gaetano "Nino" Miceli and Michele Costabile (2008) study was conducted on cross-sectional analysis rather a longitudinal design. Also, the report is from a single service industry and country. And the study does not reflect real behaviors and has not included a pilot study. For Ki-Joon Back (2005), the results may not be generalized to other segments of the hotel industry. 5. Conclusion In conclusion, there is still lot of room for further development in these studies. Xiang (Robert) Li and James F. Petrick could have considered that the findings have the potential to be generalized to currently active repeat cruise passengers in North America. Likewise, Maria Antonietta Raimondo, Gaetano "Nino" Miceli and Michele Costabile could have thrown more light towards a longitudinal design in this study and also measures of behavioral loyalty could have reflected real behavior. And Ki-Joon Back results may not be generalized to other segments of the hotel industry, and also the sample selection for this study was not purely random. Xiang (Robert) Li and James F. Petrick, 2008, Examining the Antecedents of Brand Loyalty from an Investment Model Perspective, of Brand Loyalty from an Investment Model Perspective, Sage Publications, New Delhi. Appendix 3.1. Research Objective Theoretical Framework Used Hypothesis Tested Variables Included And the nature of the variables Type of Research Design Used Data Collected Method (s) Used To reveal the critical antecedents of cruise passengers’ brand loyalty by introducing IM to the field of tourism. Element1: concept encompassing perceived brand value PLUS Element2: concept encompassing brand loyalty PLUS Element 3: concept encompassing managerial decision making PLUS Element4: concept encompassing Purchase loyalty PLUS Conceptualize that brand loyalty comprises both attitudinal and behavioral components, with attitudinal loyalty leading to behavioral loyalty. (Relational hypotheses) H1: Attitudinal loyalty to a cruise brand will be significantly and positively influenced by his or her satisfaction level. H2: Attitudinal loyalty to a cruise brand will be significantly and negatively influenced by the quality of alternative options H3: Attitudinal loyalty to a cruise brand will be significantly and positively influenced by his or her investment size Satisfaction – identified as the strongest predictor of attitudinal loyalty. Quality of alternatives and Investment Size. Causal research Online panel survey approach – Survey questionnaire Appendix 3.1.CONTD The Research Environment Time Dimension Researcher Control of the Variables Main Findings Limitations of Research Future Research Directions (Field conditions) Online panel survey; on experts panel recommendation questionnaire; sample Longitudinal studies Longitudinal studies IM might provide useful guidance in unifying the seemingly segregated literature. The three determinants of interpersonal commitment worked well in a consumer-brand scenario, and uniquely predicted attitudinal loyalty, which led to behaviour loyalty The findings have the potential to be generalized to currently active repeat cruise passengers in North America. The online panel survey approach precluded cruise passengers who do not have Internet access or technology skills. Did not consider differences in cruise lines Use multiple survey methods for cross-validation purposes Appendix 3.2 Maria Antonietta Raimondo, Gaetano "Nino" Miceli and Michele Costabile, 2008, How Relationship Age Moderates Loyalty Formation: The Increasing Effect of Relational Equity on Customer Loyalty, Sage Publications, New Delhi Research objective(s) Theoretical framework Used Hypotheses Tested Variables Included And the nature of the variables Type of Research Design Used Data Collection Method(s) Used Investigate the influences of relational equity, that is, the customer perception of distributive justice within a continuous customer-provider relationship, on attitudinal loyalty and behavioral loyalty. Element1: concept encompassing relational equity, with an increasing intensity along with relationship age. PLUS Element2: concept encompassing increasing influence of relational equity on customer loyalty PLUS Element3: concept encompassing effects of relational equity, satisfaction, and trust and moderating effect of relationship age. PREDICTS THAT Increasing influence of relational equity on customer loyalty is due to greater knowledge of long term customers about the firm processes and revenue model (Relational hypothesis) H1 Relational equity positively influences both attitudinal and behavioral dimensions of customer loyalty. H2 The effects of relational equity on attitudinal loyalty and behavioral loyalty increase along with relationship age. H3 The effects of satisfaction on attitudinal loyalty and behavioral loyalty decrease along with relationship age. Dependent variables – Attitudinal loyalty and behaviour loyalty. Relational equity, satisfaction, and trust as independent Variables. Casual Research (Communication) Used personal social networks to obtain the largest possible sample. A questionnaire containing the relevant measures. Appendix 3.2 CONTD The Research Environment Time Dimension Researcher Control of the Variables Main Findings Limitations Of the Research Future Research Directions Field studies) Survey research; structured questionnaire (Longitudinal studies) (Ex post facto design) Field survey research The positive effect of satisfaction is enhanced by relationship age Effects of satisfaction and trust depend on relationship orientation The positive effect of trust is decreased by relationship length The effect of satisfaction is enhanced by relationship age; the effect of payment equity is decreased by relationship age. No effect is moderated by relationship age Study was conducted through cross-sectional analysis rather a longitudinal design. Report evidences from a single service industry and country. Measures of behavioral loyalty tap intentions but do not reflect real behaviors. The development of the measurement scale of relational equity did not include a pilot study The exclusion of possibly relevant constructs might have biased results Consider testing the effects of relational equity on attitudinal and behavioral loyalty in different contexts and through longitudinal designs. Test hypotheses using indicators of manifest behavior. Engage in a deeper discussion of relational equity measurement. Appendix 3.3 Ki-Joon Back, 2005, The Effects of Image Congruence on Customers’ Brand Loyalty in the Upper Middle-Class Hotel Industry, Sage Publications, New Delhi Research objective(s) Theoretical framework Used Hypotheses Tested Variables Included And the nature of the variables Type of Research Design Used Data Collection Method(s) Used Explores the effects of image congruence on customers post-purchasing behaviors focusing specifically on customer satisfaction and brand loyalty in the lodging industry. Discusses the theoretical and managerial implications of the findings. Element1: concept encompassing Customer’s decision-making or choice alternatives. PLUS Element2: concept encompassing a combination of favourite attitude and consistent repeat patronage of a single brand. (Relational hypotheses) H1: CS (notion of satisfying the needs and desires of consumers) is a positive function of social IC (Consumer behavior toward a specific brand is highly influenced by the brand image and how it matches the self-images of target customers). H2: CS is a positive function of ideal social IC. H3: CS is positively associated with cognitive BL (an outcome of the decision making) process H4: Cognitive BL is positively associated with affective BL H5: Affective BL is positively associated with conative BL Social and ideal social IC were treated as exogenous variables CS and BL were endogenous variables Casual Research (Communication) Questionnaire to collect data. Appendix 3.3.CONTD The research environment Time Dimension Researcher Control of the Variables Main Findings Limitations of the research Future Research Direction Sample; questionnaire survey Longitudinal studies Longitudinal studies Social and ideal social image congruence has significant direct effects on customer satisfaction and indirect effects on attitudinal brand loyalty. The results may not be generalized to other segments of the hotel industry. Data was collected from single upper middle-class business hotel brand. The sample selection for this study was not purely random (though not possible in lodging industry) Develop a systematic design that better represents the population. Obtain access to the hotel industry and the actual purchasing frequencies of the hotel (though costly). References Xiang (Robert) Li and James F. Petrick, 2008, Examining the Antecedents of Brand Loyalty from an Investment Model Perspective, of Brand Loyalty from an Investment Model Perspective, Sage Publications, New Delhi. Maria Antonietta Raimondo, Gaetano "Nino" Miceli and Michele Costabile, 2008, How Relationship Age Moderates Loyalty Formation: The Increasing Effect of Relational Equity on Customer Loyalty, Sage Publications, New Delhi Ki-Joon Back, 2005, The Effects of Image Congruence on Customers’ Brand Loyalty in the Upper Middle-Class Hotel Industry, Sage Publications, New Delhi Jung-Chae Suh and Youjae Yi, 2006, When Brand Attitudes Affect the Customer Satisfaction-Loyalty Relation: The Moderating Role of Product Involvement, Lawrence Erlbaum Associates, Inc., USA Read More