Table of Contents
- DATAMONITOR VIEW
- INTRODUCTION
- Brand loyalty reflects a longer term commitment from the target consumer
and can be expressed by two types of buying behavior
- Loyalty is characterized by an emotional and behavioral response
- There are two forms of brand loyalty from a consumer behavior
perspective
- Creating loyal consumers will help reduce costs and maximize revenues
in the long-term
- The importance and impact of brand loyalty will vary by industry,
sector and product category
- Two important contingencies must be accounted for when it comes to
brand loyalty
- ANALYSIS
- TREND: Consumers are becoming increasingly experimental and
self-expressive
- Consumption is increasingly characterized by the ' butterfly effect'
- Consumers are becoming more transient in relationships with people,
institutions and brands
- But consumers do value brands which reinforce their self-identity
- Consumers are becoming more transient and less brand loyal
- Divorce rates remain high as relationships lose their permanence
- Variety-seeking behavior is on the rise, thereby limiting the scope
for consumer loyalty
- Consumers feel their variety-seeking behavior is viewed favorably by
fellow consumers
- Takeout: securing longer term brand loyalty will be made more
difficult by the ' butterfly consumer'
- TREND: Consumers are often overwhelmed by choice
- Increased choice in the shopping environment can make people
emotionally overloaded
- Consumers are rebelling through ' auto-pilot purchasing' in order to
narrow down the choices
- The ease of online grocery shopping further elevates ' auto-pilot'
shopping
- Takeout: Brand loyalty exists on different levels
- INSIGHT: Some consumer demographics are more brand loyal, while others
are defying conventional wisdom
- Household personality has a major impact on purchasing behavior
- Boomers are less brand loyal than previous generations of mature
consumers
- Research indicates that so-called minority consumers tend to be more
loyal or at least value a more personal approach to targeting
- Gay, lesbian, bisexual and transgender consumers are thought to be
extremely brand loyal
- Brand loyalty is often associated with Hispanics consumers in the US
- Hispanic consumers show the value of first-mover advantage
- Around 20% of loyal consumers demonstrate contingent loyalty based on
price
- Takeout: minorities form a viable segment if served well
- INSIGHT: Consumers only respond profitably to effective loyalty schemes
- Most consumers have a variety of loyalty cards but this is not a
strong indication of brand or store loyalty
- Consumer understanding and the innovative use of data is more
important than price promotions in garnering loyalty
- Brands need to capture data from willing consumers
- The penetration of private label continues to increase as consumers
are trusting it more and more
- Takeout: The rising power of retailers is undermining brand strength
- INSIGHT: Media clutter makes it difficult to develop a brand
relationship with consumers
- Profusion of media channels makes accurate selection and targeting
ever more important
- Brands that are created by campaigns have less durability than
consumer-created ones
- Consumer-generated content is one way of securing loyalty but it is
not without limitations
- Word-of-mouth advertising has a powerful impact on brand, especially
in securing initial brand custom
- Word-of-mouth influences consumer switching behavior
- Less brand loyal consumers can actually have a stronger
word-of-mouth impact
- Consumer trust risks being damaged when word-of-mouth is paid for,
or unsolicited
- Takeout: The development of ever more sophisticated media technology
is overwhelming consumers
- INSIGHT: Consumers are becoming more demanding in their expectations
- Consumers are still attracted to brands that deliver what they promise
- Consumers want brands that deliver on brand promises all the way
through the ' brand touchpoints'
- Consumers are increasingly conducting online product research which
increases expectations
- Quality is a vital attribute for securing consumer commitment and
brand loyalty
- Consumers' quality perceptions can be grouped under four main factors
- Ethically driven brands have carved out a differentiated niche
- Consumers judge ethical brands with greater scrutiny
- Starbucks is one example of a brand that has lost brand power as
consumers react to its ' corporate giant' status
- Innocent smoothies' core consumers have reacted badly to their trial
stock period in McDonald' s
- Conclusions: Developed consumer markets have reached maturity, making
retention of customers more vital than ever
- ACTIONS
- Create a feeling of brand community
- Use festivals as an opportunity to target core consumers and develop
positive brand associations
- Coordinate with opinion-forming consumers to guide brand direction
- Encourage consumers to firm up their allegiance through marketing
communications
- Challenge consumers to be more loyal
- Expand the core product to create a sense of brand ownership
- Diffuse branded artifacts to engender loyalty
- Explore the opportunities for branded spaces in key locations
- Engender loyalty simply by giving consumers what they want
- Ensure availability is a given
- Put the brand in places where consumers want it when experiencing a
specific and relevant need state
- APPENDIX
- Definitions
- Methodology
- Further reading and references
- Ask the analyst
- Datamonitor consulting
- Disclaimer
- List of Tables
- Table 1: Consumer survey: European and US attitudes to seeking out new
experiences, by country, 2004
- Table 2: Consumer survey: trends in European and US consumers'
variety-seeking behaviors, by country 2005-2006
- Table 3: Grocery sales through the Internet/home shopping channel, by
country (US$ m), 2001-2011
- Table 4: Private label by country (US$ m), US & Europe 2001-2011
- List of Figures
- Figure 1: Brands need to achieve higher involvement from their
customers to boost loyalty
- Figure 2: Brand Loyalty is hard to achieve as customer recruitment is
also essential for long-term growth
- Figure 3: Six key factors are creating the ' butterfly consumer'
- Figure 4: Consumers value brands that reflect their attitudes and
values on life
- Figure 5: Divorce rates have continued to rise in Europe (EU15),
1995-2005
- Figure 6: A feeling of ' choice paralysis' often influences shoppers
- Figure 7: Brand loyalty is characterized by deep and shallow
connections with the target consumer
- Figure 8: Taste/pleasure is non-negotiable in food and drink innovation
- Figure 9: Taste/pleasure is non-negotiable in food and drink innovation
- Figure 10: Nescafe is one of the latest major consumer brands to tune
into ethical positionings
- Figure 11: Swift growth from a niche brand raises consumer
expectations and the need to manage them
- Figure 12: Events marketing is a positive way to interact with
consumers
- Figure 13: Marmite' s polarizing positioning should do much to create
future brand loyalty
- Figure 14: Yorkie' s chunky appeal and masculine positioning encourages
a strong consumer reaction
- Figure 15: Gourmet brands are always likely to attract loyal followers
- Figure 16: Part of Ladybank Distillery' s approach could translate to
other luxury consumer goods
- Figure 17: Brands need to find ways to make themselves mores ' sticky'
even in the home
- Figure 18: Royal Unibrew demonstrates its presence at festivals in an
unmissable fashion
- Figure 19: All snack foods can balance indulgence and an increased
focus on health
- Figure 20: Putting products conveniently within consumers' grasp is
vital to gain loyalty
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