CHAPTER-1

INTRODUCTION
 CHAPTER 1
INTRODUCTION

Brand loyalty is the positive feelings towards a brand and dedication to purchase the same product
or service repeatedly, regardless of deficiencies, a competitor's actions or changes in the
environment. It can also be demonstrated with other behaviors such as positive word-of- mouth
advocacy. Corporate Brand loyalty is where an individual buys product from the same manufacturer
repeatedly and without wavering rather than from other suppliers.

Brand loyalty, in marketing, consists of a consumer's commitment to repurchase or continue to use

the brand. It can be demonstrated by repeated buying of a product, service, or other positive
behaviors such as word of mouth advocacy. This concept of a brand displays imagery and
symbolism for a product or range of products. Brands can have the power to engage consumers and
make them feel emotionally attached.

Consumer's beliefs and attitudes make up brand images, and these affects how they will view brands
with which they come into contact Brand experience occurs when consumers shop or search
for and consume products. Holistic experiences such as sense, relation, acting and feeling occur
when one comes into contact with brands.

The stronger and more relational these senses are to the individual; the more likely repeat purchase
behavior will occur. After contact has been made, psychological reasoning will occur, followed
by a buy or not-buy decision. This can result in repeat purchase behavior, thus incurring the
beginning brand loyalty. Brand loyalty is not limited to repeat purchase behavior, as there is deeper
psychological reasoning as to why an individual will continuously re-purchase products from
one brand. Brand loyalty can be shortly defined as the "behavioral willingness" to consistently
maintain relations with a particular brand.

Brand loyalty in marketing consists of a consumer's devotion, bond, and commitment to repurchase
and continue to use a brand's product or service over time, regardless of changes with competitors
pricing or changes in the external environment. Brand loyalty reflects a customer's commitment
to remain in a relationship for a long period of time with a brand.

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A critical factor of building brand loyalty is developing a connection or relationship between the
consumer and the brand. When an emotional relationship is created between the consumer and the
brand this leads to a strong bond and a competitive advantage for that particular brand. Loyalty
consists of both attitudinal and behavioral components. Attitudinal loyalty relates to the customers
willingness to purchase product or service from the brand at any reasonable cost. Behavioral loyalty
is the re-purchasing.

Brand loyalty is not limited to repeat purchase behavior, as there is deeper psychological reasoning
as to why an individual will continuously re-purchase products from one brand.

LEVELS ON BRAND LOYALTY TOWARDS CUSTOMERS:

1. Awareness
This stage is important because it softens the ground for your sales team. People want to buy from
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sales team should be making deals happen, not explaining who you are and what you do. To best
serve this stage, employ awareness-building marketing strategies that get your brand out there in
a consistent, relevant way. In time, that groundwork will open the door to sales conversations
directly with prospects.

2. Preference

At this point, customers favor your brand over competitors

four in 10 customers who say they prefer a brand can be swayed by a lower price point or better
service elsewhere tipping the scales away from you and toward your competitor.
to short-
term promotions and advertising from their competitors.

3. Insistence

stage of loyalty when a customer not

only prefers, but downright insists on your brand. The marketing world calls this behavior identity
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loyalty
promote, and even defend, your business to the world and people will listen. More than eight in
10 people value word-of-mouth recommendations as the most trustworthy.

IMPORTANCE OF BRAND LOYALTY

1. Higher Sales Volume

The challenges companies face when trying to grow in competitive environments. Achieving even
1% annual growth requires increasing sales to customers, both existing and new, by 14%.
Reducing customer loss can dramatically improve business growth and brand loyalty, which leads
to consistent and even greater sales since the same brand is purchased repeatedly. Brand loyalty
plays a vital role in the formation of the growth in the sectors.

2. Premium Pricing Ability

Studies show that as brand loyalty increases, consumers are less sensitive to price changes.
Generally, they are Willing to pay more for their preferred brand because they perceive some unique
value in the brand that other alternatives do not provide. Additionally, brand loyalists buy less
frequently on cents- off deals these promotions only subsidize planned purchases.

3. Retain Rather than Seek.

Brand loyalists are willing to search for their favorite brand and are less sensitive to competitive
promotions. The result is lower costs for advertising, marketing and distribution.
Specifically, it costs four to six times as much to attract a new customer as it does to retain an old
one.

TYPES OF BRAND-LOYALTY

1. Hard-core loyal

The hard-core loyal are the consumers who always loyal with the brands which they used. They

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IPHONE, once they bought apple products, they switch to any other mobile phones.

2. Split loyal

The Split loyal are the consumers who been loyal to two or more brands which they used. They
need certain substitutes for the products which they bought at the earlier. For e.g.,BOOKS, if they
found the other books are good, they buy other books too.

3. Shifting loyal

The Shifting loyal are the consumers who move from brand to brand when they find the other
brand is good. For e.g., SOAP, if they found other soaps are good the consumers will change from

brand.

4. Switchers

to the brands which they use. When the

price of A is more, they choose the less
they choose A. they always look to bargain the price of the products.

DISADVANTAGES IN BRAND LOYALTY:

1. Cost

Brand loyal consumers typically pay more for their brands. This occurs because brand loyal
consumers do not make their purchase decisions according to how much a product cost.Rather,
they will spend whatever is necessary to acquire a particular brand. For example, consumers loyal
to Apple will pay more to have an Apple computer or mobile device, despite the fact that many
other computers and mobile devices are available in this product category, often for hundreds of
dollars less.

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 2. Lack of Variety

Another disadvantage of brand loyalty is reduced variety, because brand loyal consumers will not

only what one brand in a particular category has to offer, instead of taking advantage of the myriad
choices available to them from other brands.

3. Lack of Convenience

Brand loyalty creates a certain level of inconvenience for consumers, since brand loyal consumers
will not accept substitutes for their brand in the product category. This means thatif the brand is
sold out or otherwise unavailable from one store, the brand loyal consumer will need to travel out
of his or her way to locate the brand from another source.

4. Tribalism

Brand tribalism occurs when brand loyal consumers begin to identify with fellow brand advocates
to the exclusion of other people. In certain cases, companies will also cherry-pick the types of
people they want to purchase their brands and reject others. The downside here is the sameness that
results; brand tribalism creates a monochromatic group of consumers who look, act and think the
same.

SCOPE OF THE STUDY

This study helps the company to frame their marketing strategies and they can also consider the
important factors preferred by the consumers. The companies can also focus on better marketing
platform for their brand loyalty and they can expand their business to many parts of the
country.

OBJECTIVES OF THE STUDY

To study the demographic profile of the respondent.

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 To analyze the different level of pricing strategies of the service provided by the Coca-
Colain Chennai city.

To know the experience towards the Coca-Cola in the Chennai city.

To give suggestions for improving the popularity of the product to the consumer.

To build the connection with consumers to gain knowledge for best offerings of the products.

NEED FOR THE STUDY:

Customer satisfaction and brand loyalty have been addressed as marketing goals for
many companies. Marketing professionals consider loyalty to be a multidimensional phenomenon.
Despite the findings of many researchers that satisfaction has a significant favorable impact on
brand loyalty and a true re-purchase behavior of same brand leads to long term business profits.
Brand loyalty has become an important issue in marketing. There are many researchers has been
conducted to examine this issue. Brand loyalty is part of relationship marketing. In the theory of
relationship marketing, there is a strong correlation between brand loyalty, trust in a brand and
commitment.

LIMITATIONS OF THE STUDY

The study is geographically limited to Chennai city. Hence the result cannot be exploited
toother places.

The sample size is limited. So only 103 responds were taken as sample.

The seriousness of the respondent and the ability to justify the answer were also the limitation.

The age is the limitation factor.

Most of the respondents do not like to drink soft drinks. The results are varied which is the
biggest limitation to the study.