Factors that Influence Brand Loyalty of Luxury Products

This section contains various literature materials that are reviewed, synthesized, and critically evaluated in relation to the study questions. It will entail the following details; definition of brand loyalty, the ways of achieving brand loyalty and the crucial or important factors that contribute to the achievement of brand loyalty of luxury products. The literature review entails data from studies that were done less that 10 years ago in order to ensure credibility and relevance of the outcome. Moreover, only peer reviewed literature are used to ensure credibility of the information.

The purpose of the study is to examine the main factors that contribute towards brand loyalty in the luxury brand market. Brand loyalty entails the repeated purchase and consumption of particular goods by customers over a period. The concept is certainly advantageous to the firms as they are assured of a sales margin within a set of time. As such, businesses often resort to the creative strategies to market their products in order to invoke the loyalty and benefit from the repeated purchases.

Given the fact that the survival and success of businesses are dependent on the amount of profit they make over time, it can be concluded that brand loyalty is an important aspect that managers need to invest on substantially. For example, Tsai (2011) underscores the need for the companies to inspire brand loyalty at the international level given the rise in competition in various industries. Below is a critical review of the literature that reveals the idea of brand loyalty of luxury products and its importance among other relevant factors.

2.1 Definition of Brand Loyalty

As mentioned before, the concept of brand loyalty refers to a consumers’ behaviour pattern, which is characterized by a continuous purchase of the same commodity. Nam, Ekinci, and Whyatt (2011) define brand loyalty as the act of buying the same product by similar customers. The authors affirm the need to differentiate the two perspectives and namely behavioural and attitudinal loyalty.

Based on the definition proposed by Nam et al. (2011), it is evident that the concept revolves around the actual buying as well as the psychological persuasion to get particular goods one reason or another. Various scholars, including Nam et al. (2011), have attributed the psychological persuasion of individuals and subsequent devotion to specific brands to satisfaction and the quality of service delivery. In light of this stipulation, a person can define brand quality as the outcome of proper marketing strategies, which include the improvement of products’ quality and provision of customer-oriented service delivery. Arguably, the authors point is relevant to the study as it highlights the means for attaining brand loyalty.

Iglesias, Singh, and Batista-Foguet (2011) mention that previous studies show that the concept can be evaluated on various parameters that are based on such behavioural constructs as the number of products that the customer buys, the sequence of purchase and the probability that the client will continue ordering the same items over time. However, Iglesias et al. (2011) refute the argument on the grounds that the concept is too complex to be explained using the unidimensional perspective that is based on the customers’ behaviour patterns. The assertions by Iglesias et al. (2011) are confirmed by Nam et al. (2011) who state that there are many underlying factors that stimulate brand loyalty among clients such as the quality of products. As such, the claim is not entirely acceptable as it looks at the concept from a single point of view and overlooks other aspects that are equally important. Based on the evaluation, it can be deduced that brand loyalty of luxury products can be measured using different parameters including consumers’ behavioural patterns. Further, someone can argue that brand loyalty is influenced by several factors including an individual’s age and financial status.

Erdoğmuş and Cicek (2012) also define brand loyalty as the clients’ resonance of a product, which is characterized by an attachment to and identification with the item. The authors imply that the concepts allude to the high level at which a person likes or is attracted to something, thus, he or she is accustomed to buying the same commodity over and over again for a long time. The definition by Erdoğmuş and Cicek (2012) resonates with other authors’ description of the concept such as Iglesias et al (2011) and Laroche et al. (2012) since they all point to customers’ devotion, continuity and time as the major aspects of brand quality. The information derived from these authors are essential for the scope of the study as they suggest that brand loyalty of luxury products is subject to many factors. Based on the statement highlighted by Erdoğmuş and Cicek (2012), someone can argue that brand loyalty is influenced by emotional attachment which is a phenomenon that is established overtime. As such, it can be concluded that the duration that an individual has used a brand is one of the major factors that affects brand loyalty.

2.2 Factors that influence brand loyalty

2.2.1 Marketing approach

Given the advantages that characterize brand loyalty, businesses have made various ways of achieving the same. Erdoğmuş and Cicek (2012) assert that the creation and maintenance of brand loyalty stand as one of the most important themes in research studies carried out by the marketers. Some of these methods include enhancing the elements of the brands and the use of classical marketing mix (Erdoğmuş and Cicek, 2012). Moreover, businesses in the contemporary world have made new strategies that suit the modern market such as sponsorship, the utilisation of social media platforms to market products and one-on-one marketing activities. According to Jahn and Kunz (2012), companies need to ensure that the content on their pages on social media is captivating in order to attract more people and maintain the loyal ones. However, the platforms may not be effective if the marketers do not use the right content to affect the customers.

Companies can also employ the marketing communication approach to achieve brand loyalty of luxury products. According to Dahlén, Lange, and Smith (2010), marketing communication entails reaching out to the targeted buyers with a compelling message in order to earn the loyalty. Based on the highlight provided by the authors, marketing communication can be regarded as a critical method for achieving brand loyalty of luxury products. There is no doubt that customized messages can influence the decision of individuals on which product to purchase. Moreover, given that companies use different marketing approaches to target customers of different age groups, someone can conclude that age difference is a factor that influences brand loyalty.

2.2.2 Sponsorship

According to Mazodier and Merunka (2012), sponsorship is one of the common means that managers use to attract brand loyalty in the contemporary era. The authors report that 46.3 billion USD was spent in the sponsorship market around the world in the year 2010 (Mazodier and Merunka, 2012). The researchers further attribute the increase in the amount of money spent on the sponsorship activities to the strategy’s effectiveness in eliciting brand loyalty of luxury products compared to the traditional methods that firms employed before. However, the authors note that there is a lack of proper mechanisms of measuring the extent to which sponsorship activities influence customers’ commitment to a brand. The information is essential for the study as it identifies sponsorship as one of the factors that influence brand loyalty of luxury goods market.

Based on an empirical study that was conducted among managers whose companies have sponsored Dutch football clubs, Henseler, Wilson, and Westberg (2011) conclude that the sponsorship deals have different results on brand loyalty. The authors imply that the way such deals influence the creation of loyalty towards the brands is dependent on the various features including the facets of the brands. Notably, the conclusion by Henseler et al. (2011) on the uncertainty of the effectiveness of sponsorship confirms the claim made by Mazodier and Merunka (2012) that the relationship between sponsorship and brand loyalty is rather complex. Further, Biscaia, Correia, Rosado, Ross, and Maroco (2013) conclude that such activities increase the level of purchase intentions among customers as the buyers often develop positive attitudes towards companies that sponsor different events especially those connected to sports. Thus, they are driven to order the products based on the psychological persuasion (Biscaia et al., 2013).

A similar point is reiterated by Chien, Cornwell, and Pappu (2011) who claim that companies often manage to transfer the meanings of events to their brands through sponsorship activities, thus, eliciting loyalty among the activities’ fans. Chein et al. (2011) imply that the firms establish a connection between them and the customers by reaching out to the latter through the events. Thus, the clients’ driven to buy the brands are motivated by their psycho-social attachment to the company. The finding is relevant to the present study as it attributes brand loyalty of luxury products to psycho-social attachment. As such, it can be concluded that social status is a key factor that determines brand loyalty. Moreover, the scholars state that sponsorship programs give companies the platform to enhance the visibility of their brands on a constant basis, thus, invoking customers’ attachment to the same (Chein et al., 2011). Moreover, the fact that most sponsorships are linked to sports activities that are mostly played by young people indicate that age influences brand loyalty significantly.

2.2.3 Product features and Design

According to the results of a study conducted by He, Li, and Harris (2012), brand loyalty of luxury products is attained through enhancing the features of a product in order to increase its effectiveness. The authors stipulate that one of the ways that inspire brand loyalty is by adding the goods features that make them convenient for use. He et al. (2012) also suggest that the companies can achieve brand loyalty by integrating the concept of social identification with other related ideas in order to influence the customers’ attraction to a specific brand. The authors’ suggestion informs the present study significantly as it expands the scope by highlighting the concept of social identification as a factor that affect brand loyalty of luxury goods.

Iglesias et al. (2011) support the stipulations made by He et al. (2012) by concluding that businesses can achieve brand loyalty by targeting the experience that the customers have with the products. In their view, Iglesias et al. (2011) report that the adjustment of an appropriate experience can only be achieved when the companies are committed to making due changes that fit the needs. Nam et al. (2011) are also in agreement with the idea that enhanced experience enables the firms to achieve brand loyalty. According to Nam et al. (2011), enterprises need to deliver goods or services of high quality on a constant basis in order to ensure that the targeted customers are loyal to the particular brand. The arguments are acceptable in the sense that people are likely to stick to the products that serve the needs effectively and they have the access to the same quality whenever they are in need. Jahn and Kunz (2012) point out authenticity and consistency as critical factors that contribute to the achievement of brand loyalty. According to Jahn and Kunz (2012), loyalty is inspired by the ability to get the same quality of products over a period without fail. Arguably, these arguments do not support the present study’s hypothesis since it lays emphasis on the appearance of the product while overlooking other key factors. Arguably, the product design is a matter of taste and preference that someone can have regardless of his or her age or social class.

2.2.4 Brand Experience

Another factor that influences brand loyalty of luxury products is through brand experience. According to Brakus, Schmitt, and Zarantonello (2009), producers can attract their customers and initiate loyalty by designing the items in a manner that stimulates the sensations, cognitions and feelings. The authors stipulate that there is a link between the experience with products and clients’ commitment. As such, enterprises need to capitalize on the experiences by designing the products in a manner that meets the psycho-social needs besides other aspects. Notably, the assertion by Brakus et al. (2009) is in tandem with that of Erdoğmuş and Cicek (2012) who point out that companies ought to focus on the features that meet the needs while producing in order to ensure the loyalty to the same. In light of the authors’ arguments, it is evident that brand loyalty of luxury brands is influenced the designs of the products. Thus, it is essential to consider the design of the commodities as part of the analysis.

Additionally, Jahn and Kunz (2012) highlight the need for the companies to focus on capturing customers’ feedback and implementing the necessary adjustments in order to achieve brand loyalty. According to Jahn and Kunz (2012), the collection of constructing feedback is essential as it enables the producers to identify client’s needs and design the items in the ways that meet the buyers’ requirements. Brakus et al. (2009) confirm the assertion stated by Jahn and Kunz (2012) by mentioning that customer satisfaction is a key element in the process of establishing brand loyalty. Moreover, this claim is in line with the stipulations made by other authors such as He et al. (2012) and Iglesias et al. (2011) who agree that companies need to focus on enhancing the experience with a brand in a bid to ensure the loyalty.

2.2.5 Formation of alliances with other brands

Another way that companies could achieve brand loyalty of luxury products is through forming alliances with other brands that complement the product. Biscaia et al. (2013) explain that the move form partnerships with like-minded businesses and run cross promotion not only provides a wider avenue for the businesses to reach their customers but also provide additional value to the clients. Thus, the buyers are likely to develop a tendency of getting two items that complement each other for the sake of convenience.

This method is undoubtedly effective and has a high chance of yielding positive results as far as brand loyalty of luxury products is concerned since people who are loyal to the complementary goods would be persuaded to stick to the targeted products. However, this may also be inappropriate if the enterprises that have aligned the businesses have a bad reputation, for instance, in terms of quality. In such a case, the loyal customers may extend the perception about the company with a bad reputation to the other, which is aligned to it. Based on the reviewed article, it is evident that the formation of brand loyalty through company alliances is not influenced by other factors such as an individual’s income, social status, or age.

2.3 The Most Crucial Factors for Achieving Brand Loyalty

The elements mentioned above are essential for the attainment of brand loyalty of luxury products. However, the following are the most important ones, first, the provision of high quality. As mentioned before, the quality of a brand is an important aspect that should be considered when creating brand loyalty of luxury products among consumers. For instance, Nam et al. (2011) identify a link between the level of psychological persuasion among individuals towards a brand and its quality. The authors also underscore the importance of improving products’ quality as a selling point for the goods that companies can capitalize on in order to achieve loyalty.

Also, Zehir, Şahin, Kitapçı, and Özşahin (2011) mention that the quality alongside customers’ perception are some of the major factors that inspire loyalty. Certainly, clients would prefer to purchase a product that satisfies their needs efficiently on a repeated basis. On the other hand, individuals who buy low-quality goods are likely to try other brands with the hope of getting value for their money. The importance of quality is also reiterated by He, Li, and Harris (2012) who assert that firms can achieve brand loyalty by enhancing the features of a brand in order to increase its effectiveness to the customer.

Secondly, marketing communication is also crucial in the process of achieving brand loyalty. The strategy involves highlighting the valuable features of a brand in order to influence the attitude and purchase frequencies of the targeted customers over a period of time (Dahlén, Lange, & Smith, 2010). The importance of this technique is also based on the grounds that it entails the use of personalized messages that buyers can relate to. Therefore, the people are persuaded to order the brand under the impression that they are designed to meet the needs or rather for the convenience. Overall, the most influencing factor is the quality of the product. As Zehir et al., (2011) points out, customers are likely to try new products if the quality of the current brand does not satisfy their need. As such, the quality of a brand stounds out as the most influential factor for brand loyalty of luxury goods.

2.4 Summary

The literature review contains secondary data from previous studies that are relevant to the topic. The researcher chose only studies that were published less than ten years on the grounds that they contain the latest trends and approaches applied by companies. All the articles that have been chosen are scholarly and peer-reviewed. The choice of articles is meant to ensure that they contain credible and verified information that can be used to achieve the study objective. Based on the reviewed literature, some of the factors that influence brand loyalty of luxury products include; sponsorship, quality of the products, and marketing strategies among others.

References

Biscaia, R., Correia, A., Rosado, A. F., Ross, S. D., & Maroco, J. (2013). Sport sponsorship: The relationship between team loyalty, sponsorship awareness, attitude toward the sponsor, and purchase intentions. Journal of Sport Management, 27(4), 288-302.

Brakus, J. J., Schmitt, B. H., & Zarantonello, L. (2009). Brand experience: What is it? How is it measured? Does it affect loyalty? Journal of Marketing, 73(3), 52-68.

Chien, P. M., Cornwell, T. B., & Pappu, R. (2011). Sponsorship portfolio as a brand-image creation strategy. Journal of Business Research, 64(2), 142-149.

Dahlén, M., Lange, F., & Smith, T. (2010). Marketing communications: A brand narrative approach. New Jersey: John Wiley & Sons.

Erdoğmuş, İ. E., & Cicek, M. (2012). The impact of social media marketing on brand loyalty. Procedia-Social and Behavioral Sciences, 58, 1353-1360.

He, H., Li, Y., & Harris, L. (2012). Social identity perspective on brand loyalty. Journal of Business Research, 65(5), 648-657.

Henseler, J., Wilson, B., & Westberg, K. (2011). Managers' perceptions of the impact of sport sponsorship on brand equity: which aspects of the sponsorship matter most? Sport Marketing Quarterly, 20(1), 7.

Iglesias, O., Singh, J. J., & Batista-Foguet, J. M. (2011). The role of brand experience and affective commitment in determining brand loyalty. Journal of Brand Management, 18(8), 570-582.

Jahn, B., & Kunz, W. (2012). How to transform consumers into fans of your brand. Journal of Service Management, 23(3), 344-361.

Laroche, M., Habibi, M. R., Richard, M. O., & Sankaranarayanan, R. (2012). The effects of social media based brand communities on brand community markers, value creation practices, brand trust and brand loyalty. Computers in Human Behavior, 28(5), 1755-1767.

Mazodier, M., & Merunka, D. (2012). Achieving brand loyalty through sponsorship: the role of fit and self-congruity. Journal of the Academy of Marketing Science, 40(6), 807-820.

Nam, J., Ekinci, Y., & Whyatt, G. (2011). Brand equity, brand loyalty and consumer satisfaction. Annals of Tourism Research, 38(3), 1009-1030.

Tsai, S. P. (2011). Fostering international brand loyalty through committed and attached relationships. International Business Review, 20(5), 521-534.

Zehir, C., Şahin, A., Kitapçı, H., & Özşahin, M. (2011). The effects of brand communication and service quality in building brand loyalty through brand trust; the empirical research on global brands. Procedia-Social and Behavioral Sciences, 24, 1218-1231.