An important part of what people in the high-end market are paying for is the brands and that the brand can guarantee quality in product, service and add value to the purchase, not just in explicit and measurable form but also more implicit through values like social status and recognition. This can be so powerful that in some cases companies focus solely on building brands.
The fact that brands play a major role in the high-end market is no secret and is further supported by Dubois and Paternault (1995), “Brand image also contributes heavily to a luxury product’s success; few people buy luxury names they do not know.” (B Dubois, 1995).In more recent literature this view is also supported by (Fred Palumbo, 2000)
The primary definition of brand loyalty according to Brown (2012) is that it serves as,” an indicator of the rate of repurchase of your brand among customers who have bought it in the past. If, when customers face a requirement to buy again, do they choose to repeat with your brand, or do they choose a competitor, or do they migrate to a different solution or category altogether? ” (Brown, 2012) this definition carries a clear link to the concept of customer loyalty, with the difference that the object of the loyalty is a brand instead of a company.
This being said, the brand is what the customer becomes loyal to. Palumbo (2000) describes brand loyalty as, “The ability to make a consumer repeatedly seek out and buy one brand over another, even when others offer coupons or lower prices, is brand loyalty” (Fred Palumbo, 2000). This is closely related to the concept of Brand salience, which is directly connected to Brand Awareness and the consumer’s decisions to choose one product or service over another. For this to take place some level of brand awareness has had to be established on the market and in the consumers’ mind set (top-of-mind). In short: this dissertation sees brand loyalty as a necessary stage in the process of becoming a loyal customer.
This makes the core value of the brand even more important as it has to be the same in many places and cultures. Further supported by Chevron (1995) stating that, “A global brand is one that is perceived to reflect the same set of values around the world. The same set of values or brand character forms the key in the global strategy. (Chevron, 1995) On the other hand it has been argued in literature by Palumbo (2000), “That the name of the game has been standardization as to the economies of scale. In reality, few successful brands are fully standardized. Manufacturers desire global brands not consumers. Consumers do not care if the brand is global, and they increasingly prefer local brands or what they perceive as local brands. “ (Fred Palumbo, 2000)
One model that explains the structure of forming a brand is Keller’s (2008) Branding pyramid (Keller, 2008). This model looks into many detailed aspects of how to create a strong brand and the more levels of the pyramid we link and communicate to the consumer, the deeper the relationship will be. (Keller, 2008)
Palumbo argues that, “Branding adds value to products and services. This value arises from the experience gained from using the brand: familiarity, reliability, and risk reduction; and from association with others who use the brand.” (Fred Palumbo, 2000) As it adds value to the customer, the customer is also more motivated to pay for it, an essential part in the high-end market.
Depending on brand and culture the part of familiarity, risk reduction and the like can play a more or less important role as global brands have to according to Palumbo, “carry instant recognition and especially for international travelers represent a risk avoidance strategy versus using local brands.” (Fred Palumbo, 2000)
To attain brand loyalty (Edmondson, 1994) suggest three main things and this is later supported by Zineldin (2000):
These three are just as important in today’s competitive society where marketing and commercial messages are always in our face. In fact, without permission today it is very hard to get close to the customer. With today’s sophisticated technology like call blockers, ad-screeners and spam-filters. Creating a good customer relationship, online as well as offline you need to think of ways to get personal, gain trust and get invited instead of using brute force.
The invitation is the first step in order to get someone to listen to what you have to say. When they are listening to you their mind set is more open. This dissertation is going to view brand loyalty as part of customer loyalty, or rather as step in the process to becoming a loyal customer as brand loyalty are established before, or during the same time as the customer become a loyal customer.
Secondly, a company can have many brands and a customer can be loyal to one but not the others, still being a very loyal customer, for example the hotel chain IHG (InterContinental Hotel Group) has a collection of sub-brands and a loyal customer might just be loyal to one of them.
