Concept of Brand Loyalty. Fundamentals of Marketing.

Abstract

The concept of brand loyalty is not very difficult to understand, some people become loyal to a brand just because they think that there is no other better brand in the market, while the others think that the services offered by their favorite brand comes at a reasonable price which can never be provided by any other brand. There might be many reasons for a person being too loyal towards one brand and this paper will throw light upon those reasons.

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Consumer buying behavior is extremely important in understanding how a brand becomes a loyal brand.Consumer buying behavior predominantly depends on the level of involvement in the purchase decision and that further depends on intensity of interest in the product. There is many a product that is high involvement purchases, like most of the high priced goods are high involvement purchases.

These products may have different kinds of risks associated with them, as they are high involvement products. These risks can be Personal, Social, or Economic. These factors determine the kinds of Consumer buying behavior, which are Routine response behavior, limited decision making, extensive decision making and impulse buying. Routine Response or Programmed Behavior is the kind of consumer behavior that deals with buying low priced products that are day to day use items, need very little search and decision effort and are purchased almost automatically.

Examples include soft drinks, snack, milk etc. Limited Decision Making is another category under which one needs to obtain information about unfamiliar brands in a familiar product category. This requires a moderate amount of time for information gathering. Examples may include Clothes, as one knows the product class but not the brand Extensive Decision Making or Complex high involvement behavior includes products that are unfamiliar, expensive and infrequently bought.

They may have a high degree of economic, performance and psychological risk. Examples of such products include cars, homes, computers, education. Such products generally make a buyer spend a lot of time seeking information and deciding. Last category of buying behavior includes Impulse Buying, which needs no planning or thinking before going on to buy the product. All these factors have to be considered by a company if they have realistic plans of making their brand a loyal brand to customers.

Description of person’s loyalty to a brand

Before understanding brand loyalty, it is very important to understand what a brand exactly means. “A brand is a collection of images and ideas representing an economic producer; more specifically, it refers to the descriptive verbal attributes and concrete symbols such as a name, logo, slogan, and design scheme that convey the essence of a company, product or service. Brand recognition and other reactions are created by the accumulation of experiences with the specific product or service, both directly relating to its use, and through the influence of advertising, design, and media commentary. A brand is a symbolic embodiment of all the information connected to a company, product or service.

A brand serves to create associations and expectations among products made by a producer. A brand often includes an explicit logo, fonts, color schemes, symbols and sound which may be developed to represent implicit values, ideas, and even personality. The key objective is to create a relationship of trust.” (Wikipedia, 15 September 2008).

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Brand loyalty is the sole aim of many companies because all the companies aim at promoting their product and if more and more people become loyal to the brand of the company that would just what the company would want because this whole process will get the company new customers and once if a customer becomes loyal to the brand of the company, the name of the brand will be suggested to many other people too who are in touch with the person who is loyal to that particular brand.

If a customer commits to purchase the same brand again and again that’s when it is called brand loyalty or in other words when a customer shoes loyalty towards a particular brand. Brand loyalty is seen as the greatest asset which a company can possibly have. “It has been suggested that loyalty includes some degree of pre-dispositional commitment toward a brand. Brand loyalty is viewed as multidimensional construct.

It is determined by several distinct psychological processes and it entails multivariate measurements. Customers’ Perceived value, Brand trust, Customers’ satisfaction, Repeat purchase behavior and Commitment are found to be the key influencing factors of brand loyalty. Commitment and Repeated purchase behavior are considered as necessary conditions for brand loyalty followed by Perceived value, satisfaction and brand trust.” (Wikipedia, 15 September 2008).

Background of Nike

Many professional athletes and so many other people use the Nike apparel, there are so many people all across the globe who are loyal to Nike and that is purely because of the services provided by the brand. No customer will become loyal to a brand for nothing only if the brand exceeds the expectations of a customer, the customer will become loyal to that brand. “Nike, originally known as Blue Ribbon Sports, was founded by University of Oregon track athlete Phil Knight and his coach Bill Bowerman in January 1962. The company initially operated as a distributor for Japanese shoe maker Onitsuka Tiger, making most sales at track meets out of Knight’s car.

The company’s profits grew quickly, and in 1966, BRS opened its first retail store, located on Pico Boulevard in Santa Monica, California. By 1971, the relationship between BRS and Onitsuka Tiger was nearing an end. BRS prepared to launch its own line of footwear, which would bear the newly designed Swoosh. The first shoe to carry this design that was sold to the public was a soccer cleat named “Nike”, which was released in the summer of 1971.

In February 1972, BRS introduced its first line of Nike shoes, with the name Nike derived from the Greek goddess of victory. In 1978, BRS, Inc. officially renamed itself to Nike, Inc. Beginning with Ilie Nastase, the first professional athlete to sign with BRS/Nike, the sponsorship of athletes became a key marketing tool for the rapidly growing company.” (Wikipedia, 15 September 2008). The company is regarded as one of the biggest sports goods’ manufacturing company and the company has expanded over the years by taking over many small companies. Advertisement has played a key role in the expansion of the company; many sportsmen have regarded Nike as the best and granting the company their loyalty.

Marketing application and analysis

Nike targets consumers between the age of 18-34 and the same is very understandable for a company making sportswear because age 18-34 is normally regarded as the age for professional athletes to perform and peak in their respective field.

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Nike is mainly into making sports shoes, like cleats for soccer, spikes for athletes and good shoes with great design for the basketball players. The company is well equipped with all the facilities; the same is transformed by the company into finished products. Advertisement is a very big concern for the company and specific budget is allocated y the company to meet the requirements of the same. The endorsers of Nike are ranked no1 in their respective areas. Next main thing is the distribution, the company has a great network of distribution, there are retailers spread all across the globe to meet the specific requirements of the people.

To stay at the top the company spends a lot of money on research and has a research center called Nike sport research laboratory, many engineers work day in and day out to produce superior and unmatched technology. The culture of Nike is very cooperative and no major conflicts occur at workplace, all the people work towards staying at the top. Nike also has the issues of social responsibly on its agenda and the company has found many NGOS like WWF etc. All the above factors contribute towards the marketing application of the company.

Conclusion

The ultimate aim of marketing is brand loyalty, which is very difficult to attain. A company should work towards developing a brand which is extraordinary and at the same time affordable by the consumers only then can that companies brand will become loyal the customers. There should be research laboratories to provide the cutting edge technology to the consumers, just like Nike has a Research Laboratory which aims at developing products with superior technology. Only a brand which stands out becomes a loyal brand and a company has to continuously work towards this.

References

Brand. In Wikipedia. 2008. Web.

Brand Loyalty. In Wikipedia. 2008. Web.

Nike. In Wikipedia. 2008. Web.

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