CONSUMERS LOYALITY IN ECONOMIC DOWN TURN

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CONSUMERS LOYALITY IN ECONOMIC DOWN TURN

Submitted By

Mariam Hashmi

CONTENT

. Summery 3

2. Methodologies 3

3. What's a brand 3

4. What's a loyalty 5

5. Consumer becomes loyal 6

6. Why marketer's invest in brand loyalty 7

7. Loyalty for by brand and small brand 7

8. Brand loyalty a question in economic downturn 8

9. Conclusion 10

0. References 11

SUMMERY

This project discusses a very important issue of brand loyalty in economic downturn. Companies invest a lot in building brand equity and they rely a lot on loyalty. My theory was that consumer doesn't remain loyal for a long as they are searching for better option and added value in any item they purchase. Its money and desire to try new things which makes them shift their loyalty. I have analysed many literature review of different companies and researcher. I have explained how a loyalty is built and how it can deviate at different situation. I have tried develop a method to which may help in increasing the loyalty of consumer for a company or brand.

INTRODUCTION

In last few decades market has become quite competitive and economic downturn has made it very unpredictable. It is difficult for consumer to differentiate products. Companies are centring their marketing strategy and tactics on brand loyalty (Fournier and Yao, 1997). Brand Loyalty brings greater sales and revenues, act fairly as barrier for new entrants and can response to competitive threats the customer's lower sensitivity to marketing efforts of competitors (Delgado-Ballester and Munuera-Alema´n, 1999). Brand loyal customers can also be a good future referent power. Marketer invests lot of money energy and time in developing brand equity to build loyalty. Today's society is much more transient than in before. They get exposure to many new brands, discounts, sale and offers. Companies argue that consumers are prison of habits and once they get used to one brand they don't like to change as they feel loyal towards it and they get used to it, but I think when one find any deal under the sun which is cheap with great offer I will go for because cost becomes the bottom line.

Methodologies

Qualitative method is the most basic form of research in social studies. An exploratory method based on secondary research of collecting online data, text books ,surveys have been used .Research papers from journals were read and data was analyzed. Many companies' web sites and annual report were studies. Hypothesis was questioned and researched. While some theories agreed with the hypothesis some completely went in the opposite direction.

What's a brand?

A brand is an identity, a trademark, a name of a product or company. It is a symbol, sign, term, design or combination of all these to make the goods or service distinctive. It allows the consumer to distinguish the product among the crowd and allows the consumer to recommend, specify or reject. It is an easier way to communicate with the customers. Brands provide information of their users' taste, wealth and styles (The Economist, 1994).

Brand names brings the image of the product, distinguish it from competitor. Brandings add extra value to the product or services. This value arises by experienced gained from using the brand. It brings trust, confidence and pride in customers and familiarity belongingness with others who used the same brand. A brand is built on perception as well on its physical entity. A brand specifies the attributes attached with its name. The loyalty make a consumer repeatedly go and sought the same brand over another, although he has many option and thus brand makes a consumer loyal.

Marketer's goal used to be to attract new customer, but now focus has been shifted to company's existing customers. It is very important to convert one time buyer into regular loyal customer. Retention of customer has become a very important mission for the marketers as it can be shown that there are more expenses in attracting a new customer than to sell to a loyal customer.

As there has been mass introduction of product there was fight between products for the same niche at that time branding played a very important role and it evolved down the time. Companies invested lot of money and effort to develop a brand than later to keep its place and image. Its still a mystery that why and how different brand attract different consumers

Why someone will choose "Pepsi" over "coco-cola" or "Tesco" over "Sainsbury" But as the consumers are getting more and more brand aware as they are bombarded by different marketing mix strategy they have more choice and they take their own time to decide.

'Instead of trying to secure new business, marketers are focused on retaining existing clients and growing existing client relationships in order to minimize the impact of the weak economy on their business.' Perry added: 'Establishing a good relationship with target audiences and creating brand loyalty is essential in ensuring that your business remains buoyant despite the market conditions, and the results emphasize this.
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Recent research done By Gyro International it was found that more and more marketer are investing in developing brand loyalty as they feel the credit crunch they feel consumer who are brand loyal will keep their business going. As per their survey it has been found that more and more marketer 51% confirmed that they are focusing on loyalty marketing and among these 38% said that they have significantly increased their investment for that purpose. (Gyro presee release)

What's Loyalty?

Fisher (1985) states "Marketers battling to keep competitors from grabbing off customers complain that there ...

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