Brand Equity to Customer Loyalty Essay

An examination of g circlee equity leading to guest doglikety in the clothing manufacturing using the Loyalty outpouring set.AbstractPurpose The aim of this newspaper publisher is to audition if in that respect is a cor affinity ming take with disfigure workforcet equity and sign faithfulness. The author im get off the ground search the sources of nock equity for three international clothing companies Abercrombie & wood pussy, attach & Spencer, H&M and apply each company to the Loyalty rill.methodological analysis Secondary literature was used through with(predicate)out this study, mainly including Annual Reports, pedantic Journals & Datamonitor reports.Findings All three companies look as a strong mark off calculate and they do concur legion(predicate) clients who argon truehearted to their products. All companies dumb rear offshoot in revenue in 2010. The companies examined are now in the process of growing their stockes in emerge trades. The faithfulness of guests does inhabit tho it is mainly due to the companies innovative merchandising strategies, which cause resulted in change magnitude revenues within the companies. Constant blot re-enforcement is extremely important to keep customers loyal to a home run.1.0 IntroductionKeller (1993) recognised twain reasons to study make committal for pecuniaryly establish reasons and to improve marketing productivity. Tolba & Hassan (2009) studied the correlation between grade equity and customer loyalty which has seen significant research everywhere the eld. The authors conducted an in-depth study of 17 brands within the auto ready industry. The findings showed that loyalty and satisfaction were the strongest predictors of brand preference and intention to purchase. The research was broken master into three areas those who had never tried the brand, those who had tried once and those who had purchased the product. ( bring down run intos 1.0-1.2).For those who ha d never tried the brand, they would not have been satisfied or loyal to a brand as they had never tired it. Perceptions of the brands kitchen range and value towards the brand impacted the results, therefore branding is fundamental in creating a personality and image of the brand that the customer can relate to. Patwardhan & Balasubramanian (2011) have taken brand equity unmatched step further and discuss consumer attraction to brands. The authors believe that attraction and mash with a brand go out growth loyalty to a postgraduate level a deeper and much intense level. The customer will experience security and trust the brand.We define brand squelch as a state of emotional attachment (evoked in response to the brand as a stimulus) that is characterized by strong positive affect toward the brand, high arousal caused by the brand, and a tendency of the brand to dominate the consumers cognition. home run chat up is subject-specific. Different consumers may enjoy different levels of romance with find to the same brand.Pawardhan & Balasubramanian conducted a study on numerous undergraduate students and asked them specific questions in relation to brand loyalty. The outcome of the study found that brand romance did exist even though the feelings and emotions behind the romance were not explained. There were a certain brands which kept re-occurring as brands with which students felt romantic about. These were Nike, Ford, Coca Cola, Dr. Pepper, Cingular, Sprint and Abercrombie & foumart.The author of this paper believes that if marketing managers could attach this idea and connect customers emotions and feelings to their brands, it may increase loyalty especially in such a belligerent market it could help to retain more customers. If a customer experiences romance they may have a chronic lasting relationship with a brand. Marketers have haved the concept of the The Loyalty Ladder. The rungs on the consort represent conniption, customer, client & advocate. (See Figure 2.0).The idea of the romance being that a customer would remain on the top rung of the streak for longer if the relationship was on a deeper level.2.0 Abercrombie & skunkAaker and Mc Laughlin (2007) highlight the sources of brand equity (See Figure 3.0) brand awareness, brand railroad tie, sensed fiber & brand loyalty. Brand awareness relates to the presence of the brand in the mind of the customer. Brands with high visibility tend to be purchased more ordinaryly and also need to be maintained in the market spyping mall to re-enforce the brand awareness. As stated above, Abercrombie & wood pussy is a brand name which nation felt strongly about it has international brand awareness and brand association. The brand is perceived as high quality, trendy and American. Abercrombie & Fitch have a huge loyal customer following. Lane (2007) describes the brand as being targeted at 18-22 year olds, mainly college students. The company was open in 1892 and wen t bankrupt in the 1970s. The company was re-branded in the 1980s to twist a huge success.The annual report states thatThe Company considers the in- break in experience to be its primary marketing vehicle. The Companys marketing strategy emphasizes the senses to reenforce the aspirational lifestyles represented by the brands. ..The Company also engages its customers through complaisant media and bustling commerce in ways that reinforce the aspirational lifestyle of the brand.Abercrombie & Fitch Annual Report 2010.Abercrombie & Fitch advertisements are all very undifferentiated black and white, top little men, beautiful males and females and often very sensual. (See Figure 4.0).Abercrombie and Fitch are famous for having had many contr all oversial pieces of clothing and advertisements in the onetime(prenominal) but this has added to their brand image and change magnitude media awareness. When the respite threatened many companies, Abercrombie & Fitch did not reduce sales pric es, as they did not lack to take away from the brands image and perceived high quality. The company did bring forth a reduction in sales, however, to overcome this, management open up encloses in new and emerging markets as the American market was maturing. Abercrombie & Fitch opened their first store in London in 2007 and have opened their doors in Japan to a new loyal market of new-fashioned advocates. (They also sell online to the Chinese market).In the past a few(prenominal) years there has been a shift in Chinese and Japanese culture. Teenagers in particular have become Americanised. Abercrombie & Fitch is a very ordinary brand in these countries as it represents the American way of life. In a study conducted by Parker et al (2004) it was found that the three virtually important aspects to a jejuneager were style, look and fit. Abercrombie and Fitch certainly guard these three elements. Tully (1994) supports the idea that it is relatively easy to form a orbiculate t een strategy & suggests that it is easy to form a global teen strategy, as teens around the world tend to have similar attitudes.The research conducted by Parker et al (2004) showed this to be slightly untrue as US and Japanese teenagers tend to have more similarities towards the Chinese teenagers, as teenagers in China have less disposable income. However this is ever-changing as China is an important emerging market. The Abercrombie & Fitch annual reports state that stores across China and Hong Kong are due to open in 2012.The author of this paper believes that the Abercrombie and Fitch brand is a perfect example of a brand romance. There are no loyalty cards or personal accounts to entice customers to climb the consort. The famous brand and its image is enough to spend a penny an intense and emotional feeling within teenagers and young adults to become advocates of the brand. The loyal advocates (mainly 18-22 years old) of the brand remain perched on the top rung of the ladder until the next generation takes its place.The loving relationship lasts for approximately four years, until the customer topples from the top rung of the ladder. Abercrombie and Fitch also have other brands (Hollister & Gilly Hicks), which are not discussed in this article. What is different about this brand is how the company do not offer cards, accounts and so on like many other companies. through and through their website they offer the chance to work in their stores and become a store model. Another perfect example of how aspirational this brand really is. (Abercrombie & Fitch official website)3.0 Marks & Spencer (M&S)As mentioned early Aaker and Mc Laughlin 2007 highlight the sources of brand equity (See Figure 3.0) brand awareness, brand association, perceived quality & brand loyalty.. Marks and Spencer (M&S) were famous for their fleeting sales even before the recession and were faced by a takeover bid by older Philip Green. M&S did not reduce their premium prices and ins tead invested intemperately in a marketing campaign which eventually proved to be a success. (Marketing parliamentary law UK 2010). The net profit was 526.3 million in the financial year ending 2010, an increase of 3.6% over 2009. (See Figure 5.0) Campaigns to re-enforce the M&S brand included the 125 years campaign, taglines included quality worth paying for and quality worth every penny (See Figure 6.0). These campaigns also feature famous celebrities such as Twiggy, Mylene Class & Danii Minogue. (Marketing Society UK 2010).Walshe (2008) discusses M&S in the marketplace (See Figure 7.0). He describes the market as weak, the business as ok and the brand as strong. If a marketing strategy can successfully increase awareness of the brand then sales will increase. M&S experienced a lot of volatility in the marketplace and discusses how it was the business that was temporarily broken and not the brand. by a strategy of changing product ranges, motivating employees and reminding cus tomers about the brand and what it stood for, the company increased its profits. passim the marketing campaigns, the message of quality and good value was kept uniform so the brand association remained the same. Different forms of advertising have been researched to localise which types can affect brand association.The discussions are mainly broken into two categories price and non-price advertising. (Kaul et al 1989, as cited by Clayton & Heo 2011). Non-price advertising can be described as differentiation or reminder advertising (Mitra and lynch 1995, as cited by Clayton & Heo 2011). In a study conducted by Clayton and Heo (2011) on whether advertising affects brand association, the study think that promotional based communicate lowers the brand image, attitudes and perceptions of the brand.The authors do state that value-oriented messages have the ability to deteriorate brand associations. M&S have also created their brand as an association to bodily social responsibility, including expenditure in areas of climate change, sustainable lancinate materials and waste. (Datamonitor 2011 (a)). Customers perceive M&S to be a brand of high quality which the company constantly communicate in advertising campaigns. Tresidder (2010) in an article discussing a food campaign by M&S describes how the slogan is This is not just food. The advert directs perception by creating/reinforcing signposts of the M&S experience.Thus, the text directs perception while guiding the social and cultural significance of the images used, a conversion process takes place in which nitty-gritty is guided by changing perception through various techniques such as the use of text, changes in context and the meaning of the gastronomic experience (Marshall, (2005) as cited by Tresidder (2010)).As stated earlier the loyalty ladder consists of four components prospect, customer, client and advocate. In Tolba and Hassans (2009) research discussed earlier, the research showed that people who never tried a brand based their assumptions on which brands they preferred based on the image and attitude. In relation to M&S, a prospect customer will depose on advertisements, word of mouth, physical outlook of store and any other media ring the brand. M&S are opening new stores in emerging markets and will have many more prospect customers as foreign to the maturing domestic market. at one time prospect customers have stepped up the ladder from prospect to customer, M&S offer a M&S accredit card which gives the cardholder points.A premium card is also available got frequent shopper who are clients and advocates which offers treble points. (marksandspencer.com). Clients and advocates of M&S tend to be of a mature age and trust the M&S brand. More belatedly M&S have used celebrities in their adverts to gain a younger market share. The company is also the leading department store retailer in the UK. The clothing and fashion segment is estimated to have led to such leadership. (Datamonitor 2011(a)) . Huang & Huddleson (2009) conducted a study on own brand products and concluded that own-brands can often have a product advantage over competition which creates a competitive advantage because the retailer is creating their own products, they gift more effort into the production and image of the product.Marks and Spencer have launched an earnings channel through M&S Direct. Customers can shop online and a new facility called Shop your Way enables customers to order online, in stores or over the send for. Products are delivered free of charge to the nearest store. Through M&S direct, customers can join discussions and see what is happening in their local stores. March and Quinton (2009) discuss viral communities and how they impact the on loyalty ladder. They state how impostant social networks are for marketers and how they act as a conduit for intra customer dialogue.The authors posited the idea of a social network contributor ladder for online users. Thi s understanding will enable marketers to communicate more effectively with both the influencers and other members of the social network ladder. (See Figure 8.0) March and Quinton (2009)4.0 Hennes & Mauritz (H&M)A prime example of a strong own brand image is the Swedish company H&M. Mc Coll & Moore (2010) conducted a study to examine own brands and product brands. It has been increasingly competitive in the past few decades with companies setting up stores internationally. The authors discuss that own brands such as H&M will be more successful if they reflect the corporate brand image which must also be strong in the marketplace. Own brands have more control over products which gives them a competitive advantage. (Mc Coll & Moore 2010). H&M is a global brand based on its value creating retail concept. H&M have make their powerful brand based on a business model of fashion and quality at the best possible price. (Ilonen et al 2010). H&M mainly create brand awareness through televisio n, internet,and mobile phone. H&M have an iphone application and online game Mytown, where players can view virtual goods. (WARC news Sep 2010).In April 2011 H&M launched its free Android application. This enables customers to browse clothing, check out offers and watch unshared videos. There is a huge international brand awareness of H&M, with stores operating throughout Europe, South Korea & Israel. The company is now focusing on new emerging markets such as Romania & Croatia and opened their first stores in these countries in 2011. H&M have sponsored celebrities in the past to create a strong brand association. They chose those who they perceived were most suitable to office staff H&M as an upscale fashion retailer offering clothing at best price, Roberto Cavalli, Jimmy Choo & Madonna are examples of celebrities who endorsed the H&M name. (Datamonitor 2011 (b))H&M has a fast retail indemnity & quickly follows market tends to deliver merchandise to its outlets daily. The loyal customers of H&M tend to be young and fashion conscious. H&M has kids, women and mens clothing shoes and accessories. The company has experienced revenue growth year on year even throughout the recession ( See Figure 9.0). In relation to the loyalty ladder, as discussed earlier by Tolba & Holsan (2009) a prospect customer will purchase based on perception and image of the brand. There is no doubt that this brand has a strong market presence. Also, as most of the customers are younger there will be more of an influence by friends, peers and the fashion industry to conform to trends. (Parker et al 2004) . Some companies have reduced mobile marketing communication during the recession but as mentioned earlier, H&M rely heavily on mobile marketing.They use technology to communicate discounts etc. very often people who receive these messages send them on to friends, this results in a usually a 50% increase of people in-store. H&M see this as a success in creating commodious footfall in their stores. (Carter 2008).This form of marketing is also useful as when people send on these messages, it can draw prospect buyers into the stores. Once the prospects have climbed to the next rung of the ladder and become customers, H&M offer an account. This account allows customers to have limited access to the virtual dressing room and other benefits such as communication via internet, mobile phone applications and offers which draw the customers back in-store time and time again, to eventually become clients and advocates of the H&M brand.5.0 ConclusionAll three companies discussed in this paper have strong brand images which are constantly communicated to the public. Customer loyalty does remain as a result of strong marketing strategies and constant brand re-enforcement.In relation to M&S and A&F, sales have slowed down as their domestic markets are maturing and people have less disposable income due to the recession. However, both companies have weathered previous recessi ons. many another(prenominal) customers still desire to buy these brands and the strong brand image will help increase sales in emerging markets. Both M&S and Abercrombie & Fitch had an increase in 2008, which dropped in 2009 but increased in 2010 again. H&M has a steady increase year on year. Abercrombie & Fitch is due to open in Dublin at the end of this year and also due to open in capital of France and Milan. All three companies are concentrating on new and emerging markets as their domestic markets mature. (See Fig 10.0)The author of this paper has posited a new loyalty scale as opposed to the loyalty ladder, see (fig 11.0). The loyalty ladder does not account for customers who are dissatisfied or anti a brand. Customers begin as prospects and can go up or down the scale depending on their experience with the brand.The internet plays a crucial part in communicating with customers and creating relationships to strengthen bonds with them through social networking sites and disc ussion fora. With so many global brands in society, it is important to keep re-enforcing brands to keep customers firmly perched on the top rungs of the loyalty ladder.