Presented by:Presented by:

Dr. Emran Khan- Roll No. 21 Natasha Arora-Roll No. 1 Carl Fernandes-Roll No. 11 Abbas Shaikh-Roll No. 234 Althea Rasquinha-Roll No. 39 Amit Kate- Roll No. 20

E.g. Dr.Emran loves to have coffee in Barista

Ms.Natasha loves to fly by Kingfisher Mr.Carl loves to shop in Shoppers Stop Mr.Abbas loves to watch in Cinemax Ms.Althea loves to work out at Golds Gym

Why talk about LoyaltyWhy talk about Loyalty• Mature Industry

– increasing competition

• Focus on getting more customers– Market share Vs. share of customer

• Competitive advantage– Price– Service quality– Loyal relationships

Brand Loyalty consists of a CONSUMER’S commitment to repurchase or otherwise continue using the BRAND

It can be demonstrated by REPEATED BUYING of a product or service or other POSITIVE BEHAVIORS such as word of mouth advocacy.

Customers are willing to pay higher prices

Brand loyalty results in improved sales volume and the ability to charge a premium price.

Behaviors:› Come back frequently› Buy most expensive products› Recommend provider to friends› Give important suggestions

Emotions:› Are attached to the provider/staff› Trust the provider› Resist changing despite competitors’ persuasion› Willing to forgive mistakes

Definition: customers with a long record of purchases from a preferred provider caused by their psychological and emotional bond with that provider

Are there various types of loyalty?

Hardcore Loyals - who buy the brand all

the time. Softcore Loyals - loyal to two or three

brands. Shifting Loyalty - moving from one brand

to another. Switchers - with no loyalty (constantly

looking for bargains)

Once you build brand loyalty you need Once you build brand loyalty you need to maintain it by various means. to maintain it by various means. Customer can switch to another brand Customer can switch to another brand for various reasons. for various reasons.

• Unavailability of a service or product.

• Price rise

• Degraded quality.

• Brand Loyalist not getting value for

money

People often make purchasing decisions based on how a brand makes them feel emotionally rather than based on quality or other objective evaluations.

If “Just Do It” strikes a chord with an athlete, he’ll buy Nike; the decision may have little to do with quality.

Building brand loyalty can be much like taking care of a pet.

It has less to do with the brand you feed them, and more to do with the way you treat them.

As long as you continue feeding and loving your pet he will return your love by loving you.

Differentiate yourself

Create a position

Be consistent and persistent

Customise your services

Develop an unbeatable product Give customers an incentive to repeat purchase Stand behind your product/ service Know your trophy customers Pareto 80/20 rule Make it easier to buy / use your product/ service Go to your customers Become a customer- service champion Marketing Stunts to create Brand Awareness

Brand marriages - not created overnight

Brand marriages are not static

Reciprocal Relationship : Mutual Benefit

Attributes Vs Benefits

There are different approaches for measuring brand loyalty.

OBSERVATIONAL METHOD: BUYER BEHAVIOR FORCED CHOICE METHOD

Observational Method

Creating Economic & Psychological

Barrier

PSYCHOLGICAL & ECONOMIC BARRIER: Economic Barrier Sociological Barrier

The First Encounter A ‘Date’ yes Yes A Brand Prom ise

Does it connect???

A Brand Prom ise

Does it Engage

A Brand Relationship

Keep Looking

Maybe

Promise

Should be

1) Credible

2) Compelling

3) Connecting

“Guaranteed Hair Growth in 3 days”

Chamanlal & Sons Established 1903

Confidence :

Integrity :

Pride :

Passion :

Product Place Promotion Price People

Same Brand different relationships Same brand – happy marriages and Divorces

E.g. Prof Kamaths experience with Bharti Axa

life Insurance.

The Bottom LineThe Bottom Line• Reduction of 5% of defective customers may result in 80% increase in profitability (Reichheld & Sasser, 1990)

• 90% of customers who love a company will repeat but only 30% of customers who like the company will repeat (Opinion Research Corp.)

• 20-40% of your customers bring 80% of your profits

2009 Brand value

2008 Brand value

Percent change

($millions)

($millions) (%)

1 1 Coca-Cola  68,734  66,667  0.03 U.S.2 2 IBM  60,211  59,031  0.02 U.S.3 3 Microsoft  56,647  59,007  -0.04 U.S.4 4 GE  47,777  53,086  -0.1 U.S.5 5 Nokia  34,864  35,942  -0.03 Finland6 8 McDonald's  32,275  31,049  0.04 U.S.7 10 Google  31,980  25,590  0.25 U.S.8 6 Toyota  31,330  34,050  -0.08 Japan9 7 Intel  30,636  31,261  -0.02 U.S.10 9 Disney  28,447  29,251  -0.03 U.S.

11 12Hewlett-Packard  24,096  23,509  0.02 U.S.

12 11Mercedes-Benz  23,867  25,577  -0.07 Germany

13 14 Gillette  22,841  22,069  0.04 U.S.14 17 Cisco  22,030  21,306  0.03 U.S.15 13 BMW  21,671  23,298  -0.07 Germany

16 16Louis Vuitton  21,120  21,602  -0.02 France

17 18 Marlboro  19,010  21,300  -0.11 U.S.18 20 Honda  17,803  19,079  -0.07 Japan19 21 Samsung  17,518  17,689  -0.01 S. Korea20 24 Apple  15,443  13,724  0.12 U.S.

Rank 2009

Rank 2008 Employer Country of Ownership

Airline loyalty programs Miles are earned for usage.

Special privileges are given on car rentals, hotel stays and dining out

E.g.. Kingfisher King Club/Jet Club

HP Petro Card Earn point on purchase of

fuel which can be redeemedfor free fuel.

Hotel loyalty programs Frequent users are given discounts,

free and discounts in restaurants Eg. Taj Hotel - Inner Circle Club

Malls Customers accumulate points for

purchases in exchange for goods Eg. Shoppers Stop - First Citizens Club

People Power is most important to differentiate a brand from others due to competition

With Brands becoming interchangeable consumer has become the most powerful Brand Ambassador for a Company

“Consumers don’t buy medicines they buy results”

If a brand offers value it will command Loyalty Consumers willing to pay premium Stronger brands command loyalty, premium and

trust Brands that have value in consumer eyes hold

great word of mouth Appeal

Like Successful Marriages – Brand Loyalty is not possible unless the customer gets emotionally attached to the brand

Brand Passion - ultimate Goal