The Role That Customer - Brand Identification Plays In Brand Loyalty and Brand Promotion - Literature review Example

? The Role That - Brand Identification Plays In Brand Loyalty and Brand Promotion Table of Contents Introduction 4 Background 4 Literature Review 10 References 22 Bibliography 24 25 Introduction The report will discuss the concepts of branding in accordance with customer loyalty and brand promotion. The report will also highlight the features of a brand loyalty and its importance in the context of the organizations. It will also emphasize on the importance of brand promotion. Finally the study will review the previously completed works on this area of concern to formulate a strong foundation for the study. Background In this turbulent business environment brand plays an imperative role towards the success of a company. Every company operating in the market place strives to develop a brand for themselves. The past decades has witnessed the evolution of some of the strongest brands of world. Companies mainly develop a brand for the purpose of giving an identity to the product. The primary intention of branding is to let customers identify the product with ease. A brand is also considered as an asset for the company, as it offers or generates the maximum revenue for the company during its entire lifespan. A brand performs a number of functions for the company. It provides an identity to the products of the company. It also helps to distinguish a company from the others in the context of its offered products and services (Dunn, 2004, p.4). Apart from that a brand is also responsible for satisfying the emotional and functional needs of the customers (Glynn, 2009, p.120). Philip Kotler defined a brand as an identity associated with a particular product or the service which is primarily used to identify the product line (Kautish, 2011, Branding). The modern concept of branding has further enhanced the application and reach of a brand. According to American Marketing Association (AMA), branding is a system which consists of the entire marketing and selling process. Apart from that a number of scholars has highlighted to the fact that brands are not just mere identity, they also acts as an aspect which provides a company with increased societal value and the users of the branded product gains a communal status. A brand is principally responsible for establishing a strong relationship with the customers. Therefore brands hold the accountability to build a healthy and strong relationship with the customers of the company. In that process customer brand identification plays a major role. Brand identification is defined as the process of developing a brand that offers positive consumer benefits and in turn results in repeat purchase. Also in the process of customer brand identification, identity of a brand acts as a significant factor. Identity of a brand provides the direction, meaning and purpose of the brand. Brand identity is thus considered as the central unit towards the development of a strategic vision. Brands generally have 3 aspects namely brand image, brand identity and brand position. Brand image portrays about how the brand is being perceived by the customers, brand identity is about how the strategist desires the brand to be perceived by the target audience. Brand positioning is also a part of brand identity; it is about the way by which the intended audience can be effectively targeted. However modern studies highlights that branding has 5 aspects that are, design, positioning, customer relationship, storytelling and price (Healey, 2008, p.8). Thus in order to sustain with a brand in the market and continuously communicating the messages to the target customers, Relationship Marketing is a key process. The next half of the project will offer insights about relationship marketing. The area of relationship marketing has been an area of focus for the last few years. Relationship marketing mainly puts emphasis on the retention of customers rather than acquiring new customers. It heavily stresses on the process of customer satisfaction and gives less importance to sales transactions. Relationship marketing differs to a large extent from that of the traditional forms of marketing. Relationship marketing mainly gauges the importance of long term relationship with a customer. Some of the eminent scholars identified that practicing relationship marking will help the company to convert a normal customer into a loyal customer. The loyalty factor in turn offers the company with new sales opportunities through repeat purchase. One of the major factors towards the enhancement of loyalty and promotion of a brand is the process of Customer Brand Identification or what is commonly known as CBI. The notion about Customer Brand Identification is the fundamental task towards the understanding about some of the largest brands of the world. The study will propose a theoretical framework based on the factors such as brand management, consumer behavior, social psychology and organizational behavior. According to a study conducted recently about CBI, it states that there are 6 key driving factors for CBI. They are brand-self similarity, brand nostalgia brand prestige, brand warmth, brand distinctiveness and brand social value (Uibk, n.d.). Branding Process The process of branding can be divided into a number of stages. The phases are Determination of the type of brand, Conducting Research, Positioning of the Brand, Defining the Brand, Development of the Brand Identity, Launch of the Brand, Brand management and finally monitoring the process (Dummies, n.d.). The stages are described below:- Stage I – Determination of the type of brand The first stage is to determine the type of brand to be formulated. For example judgment can be on the basis of whether the organization will go for an individual branding or an umbrella branding. Stage II – Conducting Research The second step is to carry out extensive research about the industry of the product. The research can be about the overview of the market, analysis of the customers, and also analyses of the competitors. Stage III – Positioning of the Brand This is probably the most important step of a brand building process. In this stage a company needs to define the unique characteristics which the brand will possess. Also the company should propose the way by which the new product will get fitted in the existing space of the market. Stage IV – Defining the Brand This stage proposes what unique features it will offer to the consumers. Apart from that Unique Selling Proposition (USP) is also defined in this stage. The most important task of this stage is to develop the strategy for product design, and product promotion. Stage V – Development of the Brand Identity The fifth step is about incorporating all the necessities of a brand. The necessities further enhance the value and visibility of the brand. Some of the vital necessities include logo, name of the brand, tagline, and other add on elements which enhance the worth of a brand. Stage VI – Launch of the Brand The brand launch should be carried out to a small scale in order to avoid any possible losses. A small pilot study will help to serve the purpose. This can be achieved by launching the brand within the organization i.e. to the internal employees. Prior to the activities such as promotions through advertisement, publicity and presentations a short pilot study will offer dual advantage. The first advantage is that, it will offer a brief idea about whether the product will be accepted or it will find difficulties in getting accepted by the consumers. Furthermore if the product has the potential to get success in the market place, it may help to gauge the things which are needed to incorporate within the product. Stage VII – Brand Management Brand management is the most essential activity after a particular brand has been launched. Also brand management is the process that helps the company to sustain the brand for a longer period of time. Some of the vital activities of this stage are as follows:- Offer a consistent brand experience to the consumers. Maintaining the value of the brand. Leveraging the status of the brand. Protection of the brand from the legal rights and also rules pertaining to the area of operation. To look after the probabilities of further brand development. Stage VIII – Monitor and update the brand The final stage is to keep the brand updated according to the changing business environment. Research Problem Area The purpose of this study is to find out the relationship of Consumer Brand Identification brand loyalty and brand promotion. The study will mainly emphasize on how Consumer Brand Identification helps to enhance the loyalty of a customer towards a brand and also how it assists in the process of brand promotion. In this process investigation is carried out through the use of sample questionnaires. Data was mainly collected from the employee of the companies which have a strong brand in the marketing. Apart from that a small focus group interview session with the brand managers of renowned companies will be carried out. Research Aim  The research is aimed to study the impact of customer brand identification on brand loyalty and brand promotion. However the study also aims to study the relevant factors associated with the process of building a successful brand. Research Objectives The research objective of a study states the factors which are necessary for the purpose of accomplishing the study. Therefore the objectives of the study must be logically correlated with the research question. Though, the principal objective of a research study is expected to be achieved during the course of study. In the context of the study, the primary research objectives will be separated as objectives and sub objectives in order to reach the conclusion. The objectives of this study are highlighted below:- 1. To find the different type of brands. 2. To understand the process of brand building. 3. To understand up to what extent brands are important to the organization. 4. To analyze the impact of Customer Brand Identification on Brand loyalty. 5. To analyze the impact of Customer Brand Identification on Brand promotion. In the aforementioned objectives of the research, the most important of them is to find he role that Customer Brand Identification (CBI) plays in brand loyalty and brand promotion. The other objectives are sub issues which will help to accomplish the study and will also serve the purpose of understanding vital concepts required to conclude the study. Research Question Research question: what is the role that CBI plays in brand loyalty and brand promotion? Research Hypothesis Hypothesis is a tool which is used for determining the validity of the research objective. Therefore a null hypothesis and an alternate hypothesis are to be developed which will help to test the validity of the project. Hence in the context of the project the null hypothesis and alternate hypothesis is formulated below:- Ho – CBI plays an important role towards the enhancement of brand loyalty and also in the process of brand promotion. H1 – CBI does not play any role towards the enhancement of brand loyalty and also in the process of brand promotion. Literature Review The second chapter of the assignment will outline some of the vital concepts associated with Customer Brand Identification. Also the chapter will offer insights about the brand loyalty, brand promotion and how both these factors get impacted by CBI. Furthermore this chapter will also highlight the importance of a brand to the company as well as to the consumers. Finally the concepts will be related with the objectives of the study in order to achieve a strong conclusion. The chapter also proposes to review the studies accomplished earlier on this particular area of concern. The earlier studies will include a number of journals articles such as ‘Social Identity Theory and the Organization’ by Ashforth and Mael, ‘Self-Categorization, Affective Commitment, and Group Self-Esteem as Distinct Aspects of Social Identity in the Organization’ by Bergami and Bagozzi. Defining Brand A brand acts as the nucleolus of a company; it helps to strengthen the image of a company in the minds of the consumers (Adebola, Talabi, & Lamidi, 2012, pp.424-428). A brand in simple words is the term, design, symbol, name or anything that distinguishes one product from that of the other. Branding can be done based on various aspects. There are a number of ways by which branding can be accomplished. The most common of them are corporate branding, individual branding, rebranding, family branding and personal branding. In order to cite an example Dove is an individual branded product from Unilever. While on the other hand IBM, G.E can be cited as the instances of corporate branding. Thus on an overall basis on whatever aspects it might be branding is important for a company. A brand is responsible for influencing the perception of the customers about the company. DeMozota (2003) defined brand as the perceptions which is being determined by experience as well as through communication. Brand is also about developing and delivering the propositions to the consumers. In the modern business era, brands are enormously focusing upon the betterment of the offering. It also remains focused towards the development of society and also to preserve the environment. However only developing or creating a brand does not mean, it will offer recognition and value to the company. The newly developed brand needs to offer value to the customers in all the aspects. Also in order to get success in the market place the company needs to assess the needs of the customers and selecting the target audience prior to the launch of a new brand (Baker, 2012, p.376). Some of the renowned brands of the world are Coca Cola, Pepsi, Wall Mart, IBM, Accenture, GE, Intel, Apple, Microsoft, among Walt Disney many others. Brand Loyalty Brand loyalty can be termed as a phenomenon by which a consumer exhibits the behavior of reiterate purchases. For example a customer bought soap and satisfying with its quality or other factors purchases the same soap over and again, the customer is said to be brand loyal. Brand loyalty depicts the propensity of a customer to select a product or a service over another product or service in order to satisfy a particular need. Also repeat purchase is possible due to the superior quality of the product. For example in the packaged goods industry, consumers may be depicted as being “brand loyal” as most of the time they choose a particular soap they are familiar. In this context consumers may utter higher satisfaction levels with a company. However satisfaction always does not relates to loyalty or creates loyalty. Loyalty is basically established depending upon the actions taken by the consumers. It has been witnessed that customer have become highly satisfied with the offered products and services yet they are not loyal. According to Bloemer and Kasper, “Brand loyalty implies that consumers bind themselves to products or services as a result of a deep-seated commitment”. To illustrate this point, they offered a distinction between actual brand loyalty and repeat purchases. In their published research, they emphasized that a reiterate purchase behavior “is the actual re-buying of a brand” while on the other hand loyalty is “the fact occurring before the behavior”. For example a buyer visits a shop thinking of selecting a specific brand or opting for a specialized service, the buyer will not to buy any alternate product in case of non-availability of the product he has specifically decide on. The customer will prefer to wait for the arrival of the product or will visit any other shop. Loyalty in general is a pledge to the brand in accordance with the perceived satisfaction. Features of Brand Loyalty Some of the vital features of brand loyalty are described below:- 1) Brand loyalty is absolutely biased and not random in nature. 2) It can be referred to as a form of behavioral response towards the act of purchase 3) It is articulated over a period of time through some decision making element. 4) It exists with respect to one or more alternative brands. 5) Brand loyalty is a function of psychological process. Importance of Brand Loyalty Organizations hugely depend upon the loyalty factor for the purpose of getting success in the market place. Globally a number of successful organizations still depend upon the set of loyal customers. Thus for any business house, developing a group of loyal customer is the basic strategy. Customer loyalty is defined as a behavior of a customer, by which he/she buys the product and services of a company continuously over a certain period of time (Cambridge Dictionaries Online, n.d.). In the perspective of a company, it delivers a superior quality and value for a product to the customers in order to create a base of loyal customers. Also customer loyalty is a crucial factor for the following reason:- A loyal customer purchases the goods and services of the company over and again for a longer period of time (Hill, 2008, p.41). A loyal customer also acts as a word of mouth promoter for the company. A loyal customer acts as an immunization factor for a company in order to pull the competition. A loyal customer also remains with the company during slack periods. In general they do not raise any issue against the company. Apart from that loyal customer also play various roles towards the betterment of the company. For example it acts as the following: - 1) the collaborator 2)The consultant,3)The custodian,4) The change driver ,5) The resource provider, and finally 6)The experience shaper for the company. Figure 1 Brand Loyalty Brand Promotion Brand promotion is generally a strategy adopted by the business firms in order to promote a brand. Brand promotion is mainly carried out to enhance the level of loyalty among the existing customers of the company. However brand promotion also helps a company to tap new customer bases, increase sales and awareness of product. A company rather than focusing on a particular product intends to promote the brand. Studies revealed that this strategy is actually very much effective in the process of marketing. Apart from that brand promotion also plays an indispensible role in the product strategy of a company (Seoresults, n.d.). These days a number of companies are indulged in the process of brand promotion by which they promote their products into the urban and rural areas as well. For example companies like Nike, Wall Mart, IBM and Vodafone spends huge amount of money towards the promotion of its brands. Promotion of a brand is mainly carried out by the process of repeat advertisements, so as to familiarize the customers with the brand. The history of brand promotion is long; companies have been practicing it since the inception of a brand. Even in today’s business environment, brand promotion is considered to be an effective tool. The primary function of brand promotion is to generate awareness about the products and it has been perceived that, increased awareness leads to the selling process. Also surveys reveal that a known brand performs better than that of an unknown brand. Apart from generating awareness, other function of brand promotion is to enhance the level of customer loyalty. Once a customer gets satisfied with a brand he/she becomes enormously loyal to the brand. While on the other hand there is also a set of consumers which will always look after the cheapest product irrespective of the quality and value offered. However for the brand loyal customer price hardly matters but quality acts as the most imperative factor. The promotion of a brand is mainly carried out by employing multimedia advertisement techniques. For instance a company may spend a certain amount of money on radio advertisement, television advertisement and also on some newspaper advertisement. The primary intention is to generate a mass awareness about the product and its unique features. A customer always gets aware of a product, if it has been promoted by applying the right course of action. The quality of a product is also important to its promotion, as promoting a fragile product is a waste of money and time. A company may attain customer at the initial phase, but will fail to convert them into loyal customers. Some of the important functions of a brand promotion are as follows:- Brand promotion demonstrates the characteristics and the unique features of a brand that are unavailable to the competitors. It enhances the recognition of a brand and creates a respectable position in the minds of the consumers. Again promotion is one of the key elements of marketing mix, thus it should be handled with utmost importance. Some of the possible ways of promotion includes:- Social Media Optimization: - Social media optimization can be a probable way by which the company can create awareness about the products and services towards the target customers. Online Reputation Management: - Online reputation management can be defined as a process by which a company uses strategy to interact with the target customers, in the context of the brand and its associated features. The primary intention is to convert the potential buyers into buyers. Importance of brands to the customers ‘The most powerful brands don’t come from marketing, but from great customer experience’. Nowadays consumers can be termed as conspicuous. They have like never before have become more conscious about the personal heath, society as well as environment. These days’ consumers evaluate factors such as product quality, creativity, consistency, value, performance, design, style, feature and value among others. In general a branded product helps a consumer to identify its product among thousands of other available products in the market place. Consumers are offered with a number of similar products in the market and making choice among them becomes a difficult task. Moreover a product also has a number of substitutes. Therefore in order to identify the right product which satisfies the needs of the consumers, branding is indispensible. A product is judged on the basis of style, price, quality and value it offers. When a brand succeeds to offer all the elements to a customer, it becomes important for the customer as well. The customer derives satisfaction from the product. Apart from that brands are important for a consumer in the following way:- Brand helps to differentiate a product from that of its competitors (IcmrIndia, n.d.). It acts as the identity of a product, and by which a customer easily recognizes it. It minimizes the searching time of a consumer. For example if a consumer is pre determined about buying a Nokia phone, he will not search for any other alternative and will directly buy it. While on the other hand if there was no concept of brand, users would have visited shops and searched for the alternatives. Therefore the searching time greatly minimizes. Some of the premier brand of the world offers societal value to the consumers. Consumers try to portray their social status by using branded products. A number of companies have taken these as advantage. For example Complan, the famous nutritional diet used a strategy that depicts along with the product the user also gets branded. They uses the slogan “I am a complan boy/girl”, which tries to brand the user as well. Importance of Brands to the Organizations Branding is the most powerful tool or a component of a business venture. A consumer makes the buying decision based on how he/she perceives about the brand. Therefore from the part of a company branding in an accurate way is of utmost importance. A consumer may have never used a product but the way it is being positioned or branded, a consumer envisions its quality. A business can develop within no time provided the consumers are aware about it, while it can even be shattered if the competitors overshadow its identity. A brand not only takes a company to a new height, but also helps to sustain with the growth. Apart from that some of the other advantages of a brand are as follows:- Visibility: - A brand hugely enhances the visibility of a product. In general consumers looks for a product that is visible and offer societal status. Appearance: - Appearance is the way a brand is positioned. A professionally positioned helps organizations to deal with larger organizations. It also helps companies to charge premium prices. Credibility: - A strong credibility can be established by presenting a strong visual message. Credibility factor is being used throughout the business and also in the process of marketing communication. This helps a company to remain a step ahead of the rivals. Differentiation: - Through the use of differentiation, a company can also get an upper hand of the consumer. This can be achieved by designing a unique logo, and a strong identity system along with strategic marketing process. Stability: - A brand offers stability to the business. For example if a company has quality branded product it can cater to the consumers for over a long period of time. Retention: - Possibly the biggest advantage of having a brand is that, it helps to retain the existing base of customers. Through its continuous delivery of quality, a brand converts a potential customer into a loyal customer. Most of the consumers remember a product on what they rather than being heard. Hence conduction promotion through visual means will further help the company to retain existing customers as well as tap new customers. Impact of Customer Brand Identification on Brand Loyalty and Brand Promotion The research question was to assess the Impact of Customer Brand Identification on Brand Loyalty and Brand Promotion. Customer Brand identification plays a major role towards the process of attaining customer loyalty. Customer-brand identification (CBI) is the extent to a customer defines itself in terms of emotional closeness with that of the brand. However the concept of CBI is different from precursor conceptualizations, where CBI captures and imitates emotional likeliness. According to the authors Hogg, Terry, and White (1995) the concept of identity is perspective, descriptive and evaluative. In this context the descriptive nature portrays the use of brand to describe self. Perspective nature depicts the way to behave in such a way so that it remains in accordance with the brand image. Finally evaluating is the way to treat the known brands in more favourable way than that of the unknown brands. It also resists any negative comments about the known brand. Also CBI helps a company to gain competitive advantage in the market place. The competitive advantage will be primarily based upon the non substitutability, uniqueness and exclusivity. Studies also revealed that a consumer identifies a company as because the products of the company satisfy his/her emotional needs. At the level of brand an individual might identify or experience with a brand which fits with his/her personality, without being able to afford it. However with the course of time identification of a brand changes from an insentient process to a more mindful and sophisticated procedure. According to the proposed model customer brand identification plays a decisive role towards brand promotion and brand loyalty. Brand promotion is a fundamental mechanism towards the process of a customer identifying a brand. In other words brand is the recognizing feature which illuminates the goods and services after developing a sense of trust in the minds of the potential consumers. The most important activities towards the process of formulating strong customer brand identification are brand management and brand promotion. Figure 3 (Proposed Model to depict Customer identification process and its impact on brand loyalty and brand promotion) Brand Prestige Brand prestige is defined in terms of the products and services which have high status in the market place. According to Dubois and Czellar (2002) the key factor for a brand in judged on the basis of its uniqueness and specification of its offerings. However the prestige of a brand is dependent upon the brand experience and the brand trust. Brand prestige also helps a company in the process of customer brand identification (Choi, Ok and Hyun, n.d.). Value Congruence In most of the cases Value congruence has lead to a positive outcome. It takes into consideration 4 key elements namely interpersonal attraction, communication, trust and predictability (Edwards and Cable, 2009). Value congruence also helps a company towards the understanding of customer brand identification process. Brand distinctiveness Brand distinctiveness can be defined as the uniqueness of a brand. It may be fact that an organization develops a superior product, but still the success of the brand will hugely depend upon the unique feature the brand is offering. Brand distinctiveness also adds to the process of customer brand identification process. Summary The literature review section has reviewed a number of journal articles in order to offer insights about the impact of customer brand identification on the process of developing customer loyalty and brand promotion. In this context it has been found that a sound customer brand identification process helps a company to develop a larger base of loyal customers. While on the other a brand in order to generate awareness among the potential customers, brand promotion is being extensively used. Also in the process of developing a brand a company has to move through a number of vital steps. It also depicts that an organization using sound strategies in order to develop a strong brand will be highly successful in the market place. The literature review was mainly carried out based on the theories and the concepts of branding, as previously limited work have been done on this particular area or concern. However few articles were extensively consulted during the course of study. References Adebola, O. I., Talabi, F. O., & Lamidi, I. K., 2012. Rebranding Nigeria: the role of advertising and public relations at correcting Nigeria image. International Research Journals, 3(5), 424-428. Cambridge Dictionaries Online, No Date. Customer loyalty. [Online] Available at: [Accessed 14 August 2012]. DeMozota, B. B., 2003. Design Management: Using Design to Build Brand Value and Corporate Innovation. New York: Skyhorse Publishing Inc. Dummies, No Date. The Branding Process. [Online] Available at: [Accessed 13 August 2012]. Dunn, D., 2004. Branding: The 6 Easy Steps. California: E-agency. Edwards, J. R., and Cable, D. M., 2009. The value of value congruence. [Online] Available at: [Accessed 14 August 2012]. Glynn, M. S., 2009. Business-To-Business Brand Management: Theory, Research and Executive Case Study Exercises. Bradford: Emerald Group Publishing. Healey, M., 2008. What is Branding. Minneapolis: Rockport Publishers. Hill, D. A., 2008. What Makes Total Quality Management Work: A Study of Obstacles and Outcomes. Michigan: ProQuest. IcmrIndia, No Date. Product Branding and Customer Service Strategies: Overview. [Online] Available at: [Accessed 14 August 2012]. Kautish, P., 2011. An Analytical Study on Perspectives of Brand Awareness and Its Impact Upon Consumer Buying Behavior with a View to Facilitate Managerial Decision Making in Organizations. Munich: GRIN Verlag. Seoresults, No Date. Brand Promotion. [Online] Available at: [Accessed 14 August 2012]. Uibk, No Date. Brand Management. [Online] Available at: [Accessed 13 August 2012]. 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