Enrollment No: PRODUCT AND SERVICES MARKETING Brand loyalty, in marketing, consists of a consumer's commitment to repurchase or otherwise continue

using the brand and can be demonstrated by repeated buying of a product or service, or other positive behaviors such as word of mouth advocacy. Brand loyalty is more than simple repurchasing, however. Customers may repurchase a brand due to situational constraints (such as vendor lock-in), a lack of viable alternatives, or out of convenience. Such loyalty is referred to as "spurious loyalty". True brand loyalty exists when customers have a high relative attitude toward the brand which is then exhibited through repurchase behavior. This type of loyalty can be a great asset to the firm: customers are willing to pay higher prices, they may cost less to serve, and can bring new customers to the firm.For example, if Joe has brand loyalty to Company A he will purchase Company A's products even if Company B's are cheaper and/or of a higher quality. From a firm's perspective, a successful brand enables it to maintain a high level of consumer acceptance, often in the face of considerable competition. In addition, brand loyalty can:
* Provide a solid foundation for new product launch and for licensing * Offset a decline in market share during price and promotional wars * Help provide resistance to competitive attacks

"The brand loyalty of the customer base is often the core of a brand's equity. If customers are indifferent to the brand and, in fact, buy with respect to features, price, there is likely little equity From the customer's perspective, a brand provides a visible representation of difference between products. Brands allow consumers to shop with confidence in an increasingly complex world. A brand can signify product quality as well as aid consumers in differentiating the product from competitive offerings. A brand that consumers trust will also serve to reduce perceived risk and post-purchase cognitive dissonance.Modeling of price elasticity effects also demonstrate the importance of loyalty. More loyal consumers, as measured by probability of purchase or "share of requirements" from past purchase panel data, are less likely to switch due to a given price inducement; as a corollary a loyal buyer usually needs a bigger discount to switch than would a less loyal buyer.

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Enrollment No: PRODUCT AND SERVICES MARKETING Marketers must understand what brand loyalty is, bearing in mind that brand loyalty will be different for each brand managed. Research suggests that customers can demonstrate loyalty by purchasing, by being willing to recommend, and by providing advice to the company, and finally, customers could demonstrate brand loyalty through an intention to repurchase. Thus, brand loyalty is a complex construct and it should not be assumed that behavioral loyalty involves feelings or positive cognitive processes as antecedents, brand attitude may be one possible determinant of loyal behavior, but there are others such as distribution, market concentration and promotional activity supporting a brand. A loyal buyer usually needs a bigger discount to switch than would a less loyal buyer. Clearly, it is important for brand owners to understand the variables that underpin the construct of loyalty and, in particular, loyalty behavior for their brands.Customer loyalty presents a paradox. Many see it as primarily an attitude-based phenomenon that can be influenced significantly by customer relationship management initiatives such as the increasingly popular loyalty and affinity programmes. However, studies show that loyalty in competitive repeat-purchase markets is shaped more by the passive acceptance of brands than by strongly held attitudes about them. From this perspective, the demand-enhancing potential on loyalty is more limited than might be hoped. Generally, we say a person is brand loyal when he or she buys the same brand over and over, in spite of there being reasonably substitutable choices. But some argue this isn't necessarily brand loyalty. Although it is tempting to define loyalty as simply repurchase, marketers often have little power over the variables and constraints directly controlling how customers pass through the purchase. It may be that the product brand is the only one available to the consumer, such as in a monopoly market place situation or, it may be simply consumer inertia: repetitive consumer behavior and the path of least resistance or, it may be that brand loyalty is more the result of indifference than choice if all brand have the same basic ingredients, cost about the same, and perform at the same level, it really doesn't matter which brand the consumer buy--they get the same benefits. Brand Loyalty gives a customer to an industry which committed to repurchase the services and also reflect a motivated and difficult to change habit because it is rooted in high involvement. Brand Loyalty also influenced by the customer attitude towards the brand, behavior and customer experience

Two ways to think of brand loyalty:-

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Enrollment No: PRODUCT AND SERVICES MARKETING 1. Brand Loyalty as Behavior 2. Brand Loyalty as an Attitude In Brand loyalty as behavior see a customer consistent to repurchase of brand. Example every time customers repurchase a product, like Toothpaste. If the customer buys the same toothpaste every time consider that customer is loyal towards the brand. The consistent of repurchasing the same product is called Brand Loyalty as behavior. Measurement of customer loyalty, how your loyalty pay off. Like measure loyalty as a percentage, measure is also based on consistency with which the customer switches between brands. It can be measure by asking customer to rank various brands in terms of how they like it, which brand prefer more. Brand loyalty of the customer base is often the core of a brands equity. If customers are indifferent to the brand with respect to features, price, and convenience with little concern to the brand name, there likely little Brand Equity. Because Brand Equity helps in a power derived from the goodwill of the company. And also the name it has earned over time and helps to translate into higher sale volume. On the other hand Brand loyal customer purchase the brand even they face competitors with high feature, low price, promotion etc. After a long construction of a marketing brand loyalty builds. There are different levels of a brand Loyalty 1. Committed buyer 2. Likes the brand considers it a friend 3. Satisfied buyer with switching cost 4. Satisfied buyers no reason to change 5. Switchers/price sensitive indifferent bo brand loyalty In a bottom non loyal customer we can also say that they are basically switchers those who often change a brand. They are completely indifferent from the brand. Each Brand is perceived to be adequate and the brand name plays a little role in purchasing decision. These buyers basically consider the price of the product or known as switcher also. In the second level, customer no reason to change or switching its product or at least not dissatisfy. No reason for dissatisfaction of the product. These buyers termed as habitual buyers. Such segment can be vulnerable to competitors that can create a visible benefit to switching. Third level or satisfied buyer with switching costs, In this particular segment to attract buyers competitors need to overcome the switching costs by offering an inducement to switch or by offering a benefit large enough to compensate. This group known as the switching cost loyal. On the forth level, find those customers that truly like the brand. Their preference may be

based upon an associated such symbol, a set of use experience, or a high perceived quality.However, liking is often a general feeling that cannot be closely traced to anything

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Enrollment No: PRODUCT AND SERVICES MARKETING specific; it has a life of its own People are not always able to identify why they like something, especially if the relationship has been a long one. In the Top level, they are very high committed customers. Example I Phone customer, even before launching the 4th edition customer desperately waiting for it and after introduce in the market, customer queuing outside of the store. The brand is very important for them either functionally or as an expression of who they confidence is such that they will recommend the brand to others. True brand loyalty exists when customers have a high relative attitude toward his brand exhibited through repurchase behavior. This type of loyalty can be a great asset to the firm: customers are willing to pay higher prices, may cost less to serve and can bring in new customers to the firm. The brand loyal consumer does not attempt any kind of attribute evaluation but simply chooses the familiar brand on the basis of some overall positive feelings towards it. This overall positive evaluation stems from past experience with the particular brand under consideration. Brand loyalty provides a firm with time to respond to competitive moves. In loyal, satisfied customers will not be looking for a new product. The brand loyal consumer does not attempt any kind of attribute evaluation but simply chooses the familiar brand on the basis of some overall positive feelings towards it. This overall positive evaluation stems from past experience with the particular brand under consideration. Brand loyalty provides a firm with time to respond to competitive moves.In loyal, satisfied customers will not be looking for a new product. Factors influencing brand loyalty: It has been suggested that loyalty includes some degree of pre-dispositional commitment toward a brand. Brand loyalty is viewed as multidimensional construct. It is determined by several distinct psychological processes and it entails multivariate measurements. Customers' perceived value, brand trust, customers' satisfaction, repeat purchase behavior, and commitment are found to be the key influencing factors of brand loyalty. Commitment and repeated purchase behavior are considered as necessary conditions for brand loyalty followed by perceived value, satisfaction, and brand trust. Fred Reich held, one of the most influential writers on brand loyalty, claimed that enhancing customer loyalty could have dramatic effects on profitability. Among the benefits from brand loyalty specifically, longer tenure or staying as a customer for longer was said to be lower sensitivity to price. This claim had not been empirically tested until recently. Recent research found evidence that longer-term customers were indeed less sensitive to price increases.

Examples of brand loyalty promotions: My Coke Rewards

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Enrollment No: PRODUCT AND SERVICES MARKETING Pepsi Stuff

DECLINE AND DEATH BRANDS: The power of a brand lies in its equity with its customers. Brand equity has been defined as the differential impact of brand knowledge, which comprises of broad band awareness and broad image, on customers response. Olds mobile is another icon, was one of the best brands for general motors. Some of the innovations, and front wheel drive. Overtime sales started declining and GM decided to shop production of olds mobile cars in 2004. There were 2reasons for decline of the brand. Oldsmobile was perceived as an old brand among the consumes (maig2003). Another reason was that as GM strived for formally in design across its different brands, olds mobile lost its unique identify overtime and followed a route of in design across its different brands olds mobile lost its unique identify overtime and followed a route of steady decline over a rather long duration because of chronic issues that were not addressed. Causes of Brand decline: Product life cycle consist of four stages such as introduction, growth, maturity and decline. Managerial actions, both strategic and tactical play a vital role in determining a brands future. Generative force in the brands evolutionary growth. Managerial actions do not take place in isolation. The market environment serves as a selective force affecting brand in certain industries. We can elaborate on each of the forces and explain their role in brand decline. Declining brand loyalty: Today most critical issue faced by the marketing managers is of declining brand loyalty. Research has shown that, today, solely loyal customers rarely make up more than 20% of the total customers buying. More importantly, research has shown that solely loyal customers buy less when compared to customers who are multi-brand loyal, and the number to solely loyal customers diminishes over time. Brand Loyalty has declined for three main reasons:
1. Increasingly, people seek variety and like to try new brands and products; boredom thresholds have fallen and consumer like to break out of same old routines--and this has had a negative impact on loyalty. 2. Quality levels of products have risen to a standard where they no longer clearly differentiate the competing brands within the category. Consumer risk in switching brands is considerably lower today as the quality of substitute brands is no longer a concern.

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Enrollment No: PRODUCT AND SERVICES MARKETING

2. Quality levels of products have risen to a standard where they no longer clearly differentiate the competing brands within the category. Consumer risk in switching brands is considerably lower today as the quality of substitute brands is no longer a concern.

Declining brand loyalty: Today most critical issue faced by the marketing managers is of declining brand loyalty. Research has shown that, today, solely loyal customers rarely make up more than 20% of the

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Enrollment No: PRODUCT AND SERVICES MARKETING total customers buying. More importantly, research has shown that solely loyal customers buy less when compared to customers who are multi-brand loyal, and the number to solely loyal customers diminishes over time.

Today, most customers include several brands in their preferred brand set. Research has cited that Brand loyalty doesn't exist for many products and services, and is declining for those who have a modicum of it, because the marketing organization and the brands are not loyal to the customer Marketers want customers to be brand loyal--but marketers commonly fail to be loyal to their customers.

Loyalty A second dimension, however, is whether the customer is committed to the brand. Philip Kotler, again, defines four patterns of behavior: 1. 2. 3. 4. Hard-core Loyals - who buy the brand all the time. Split Loyals - loyal to two or three brands. Shifting Loyals - moving from one brand to another. Switchers - with no loyalty (possibly 'deal-prone', constantly looking for bargains or 'vanity prone', looking for something different).

Brand Loyalty has declined for three main reasons:

1. Increasingly, people seek variety and like to try new brands and products; boredom thresholds have fallen and consumer like to break out of same old routines--and this has had a negative impact on loyalty. 2. Quality levels of products have risen to a standard where they no longer clearly differentiate the competing brands within the category. Consumer risk in switching brands is considerably lower today as the quality of substitute brands is no longer a concern.

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Enrollment No: PRODUCT AND SERVICES MARKETING

2. Quality levels of products have risen to a standard where they no longer clearly differentiate the competing brands within the category. Consumer risk in switching brands is considerably lower today as the quality of substitute brands is no longer a concern.

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Enrollment No: PRODUCT AND SERVICES MARKETING

SWOT Analysis - Meaning. SWOT analysis is the evaluation of available Information concerning the Business environment in order to identify internal strengths and weaknesses, and external Threats and Opportunities. SWOT analysis is also known as Situational analysis and, when applied to competitors, as Competitor profiling. A SWOT analysis can be used to measure an organization's competencies and identify opportunities to taken by business management in the future. SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. The technique is credited to Albert Humphrey, who led a convention at Stanford University in the 1960s and

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Enrollment No: PRODUCT AND SERVICES MARKETING 1970s using data from Fortune 500 companies. SWOT analysis can be used in conjunction with other tools for audit and analysis, such as PEST analysis and Porter's Five-Force analysis. It is also a very popular tool with business and marketing students because it is quick and easy to learn. SWOT Analysis is the most renowned tool for audit and analysis of the overall strategic position of the business and its environment. Its key purpose is to identify the strategies that will create a firm specific business model that will best align an organizations resources and capabilities to the requirements of the environment in which the firm operates. In other words, it is the foundation for evaluating the internal potential and limitations and the probable/likely opportunities and threats from the external environment. It views all positive and negative factors inside and outside the firm that affect the success. A consistent study of the environment in which the firm operates helps in forecasting/predicting the changing trends and also helps in including them in the decision-making process of the organization. An overview of the four factors (Strengths, Weaknesses, Opportunities and Threats) is given below. Strengths - Strengths are the qualities that enable us to accomplish the organizations mission. These are the basis on which continued success can be made and continued/sustained. Strengths can be either tangible or intangible. Strengths are the beneficial aspects of the organization or the capabilities of an organization, which includes human competencies, process capabilities, financial resources, products and services, customer goodwill and brand loyalty.

Weaknesses - Weaknesses are the qualities that prevent us from accomplishing our mission and achieving our full potential. These weaknesses deteriorate influences on the organizational success and growth. Weaknesses are the factors which do not meet the standards we feel they should meet. Weaknesses in an organization may be depreciating machinery, insufficient research and development facilities, narrow product range, poor decision-making, etc. Weaknesses are controllable.

Opportunities - Opportunities are presented by the environment within which our organization operates. These arise when an organization can take benefit of conditions in its environment to plan and execute strategies that enable it to become more profitable.

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Enrollment No: PRODUCT AND SERVICES MARKETING Organization should be careful and recognize the opportunities and grasp them whenever they arise. Selecting the targets that will best serve the clients while getting desired results is a difficult task. Opportunities may arise from market, competition, industry/government and technology.

Threats - Threats arise when conditions in external environment jeopardize the reliability and profitability of the organizations business. They compound the vulnerability when they relate to the weaknesses. Threats are uncontrollable. When a threat comes, the stability and survival can be at stake. Examples of threats are unrest among employees; ever changing technology; increasing competition leading to excess capacity, price wars and reducing industry profits; etc.

The SWOT analysis provides information that is helpful in matching the firms resource and capabilities to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and selection. The following diagram shows how a SWOT analysis fits into an environmental scan. Strengths are everything the organization does well. Weaknesses are areas needing improvement. Opportunities are possibilities that exist outside of the organization. Threats are dangers that loom.

Key to using SWOT is to understand that Strengths and Weaknesses are internal to the organization, and Opportunities and Threats are external. Work through the boxes one at a time. Start with Strengths and then move to Weaknesses. When you have exhausted these categories, move to Opportunities and save Threats until last.

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Enrollment No: PRODUCT AND SERVICES MARKETING

Strengths
Production Quality Distribution Channels Customer Loyalty / Relationships Management Technological skills Leading brands Scale Business location

Weaknesses
o Unreliable products / services o Poor access to distribution o Poor quality and customer service o Low customer retention o Absence of important skills o Weak brands o Sub-scale

Internal Internal Factors Factors

Opportunities

Technological advances Change in population age New distribution channels Changes in Government policies Lower personal taxes A new emerging or developing maker (niche product, place new country, less competition) Merger, Joint Venture, or strategic alliance

O T

SW

Threats
o o o o o o o Changing customer base Taxation Prices New distribution channels Closing of geographic market Increased trade barriers New regulations

External Factors

Positive

Negative

Benefits of a SWOT analysis Evaluating business proposals or business ideas Strategic Planning decisions, such as diversification or expansion questions

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Enrollment No: PRODUCT AND SERVICES MARKETING Competitor Analysis, how does your business match up to the competition? Assessing market opportunities SWOT encourages foresight, allowing managers to have a clearer picture of the potential results of their decisions Reviewing Strategy deciding if current corporate strategy is working Routinely using SWOT helps increase decisions made by proactive thinking and decreases decisions made by emotion and haste It is a source of information for strategic planning. Builds organizations strengths. Reverse its weaknesses. Maximize its response to opportunities. Overcome organizations threats. It helps in identifying core competencies of the firm. It helps in setting of objectives for strategic planning. It helps in knowing past, present and future so that by using past and current data, future plans can be chalked out. A SWOT analysis provides a fairly simple, low-cost way of assessing the companys position. It provides information that is important in developing business and marketing plans, as well as setting organizational goals and objectives It tells where the company currently sits, and where it needs to go in the future. A SWOT analysis can help you gain insights into the past and think of possible solutions to existing or potential problems either for an existing business or new venture

Limitations of SWOT Analysis There are certain limitations of SWOT Analysis which are not in control of management. These includea. b. c. d. Price increase; Inputs/raw materials; Government legislation; Economic environment;

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Enrollment No: PRODUCT AND SERVICES MARKETING e. Searching a new market for the product which is not having overseas market due to import restrictions; etc. Internal limitations may includea. b. c. d. Insufficient research and development facilities; Faulty products due to poor quality control; Poor industrial relations; Lack of skilled and efficient labour; etc

SWOT matrix The concept of determining strengths, weaknesses, threats, and opportunities is the fundamental idea behind the SWOT model. To present the model in a more understandable way, scholars came up with so-called SWOT matrix. SWOT matrix is only a graphical representation of the SWOT framework. The above is a schema of how SWOT works. You start at the top level and go down to details. When this is filled with content, it gets the shape of a matrix, such as the example below:

STRENGTH

WEAKNESS

OPPORTUNITY

THREAT

SO

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WT

Enrollment No: PRODUCT AND SERVICES MARKETING

S-O strategies are centered on opportunities that complement the company's strengths. How can you use your strengths to take gain the most from your opportunities? Use of Internal strengths to exploit external opportunities S-T strategies identify ways in which the companys strengths can be used to reduce its vulnerability to external threats. How can you reduce the external threats on your company by using your strong points? Use of internal strengths to avoid, minimize or nullify the impact of external threats W-O strategies are developed to find ways to overcome the companys weaknesses that stand if the way of opportunities. How can you go around your weaknesses to reach your opportunities better or how can the opportunities you have be used to overcome your weaknesses? Overcome internal weaknesses by exploiting external opportunities W-T strategies focus on reducing the companys weaknesses and its susceptibility to external threats. How can you curtail your weaknesses and your vulnerability to external threats? The toughest strategy: Play defensive with the sole focus to overcome internal weaknesses and avoid/ minimize the impact of external threats.

Internal and external factors The aim of any SWOT analysis is to identify the key internal and external factors that are important to achieving the objective. These come from within the company's unique value chain. SWOT analysis groups key pieces of information into two main categories: a) Internal factors The strengths and weaknesses internal to the organization.

b) External factors The opportunities and threats presented by the external environment to the organization. - Use a PEST or PESTLE analysis to help identify factors The internal factors may be viewed as strengths or weaknesses depending upon their impact on the organization's objectives. What may represent strengths with respect to one objective may be weaknesses for another objective. The factors may include all of the 4P's; as well as personnel, finance, manufacturing capabilities, and so on. The external factors may include

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Enrollment No: PRODUCT AND SERVICES MARKETING macroeconomic matters, technological change, legislation, and socio-cultural changes, as well as changes in the marketplace or competitive position. The results are often presented in the form of a matrix. SWOT analysis is just one method of categorization and has its own weaknesses. For example, it may tend to persuade companies to compile lists rather than think about what is actually important in achieving objectives. It also presents the resulting lists uncritically and without clear prioritization so that, for example, weak opportunities may appear to balance strong threats. It is prudent not to eliminate too quickly any candidate SWOT entry. The importance of individual SWOTs will be revealed by the value of the strategies it generates. A SWOT item that produces valuable strategies is important. A SWOT item that generates no strategies is not important.

SWOT issues into actions under the six categories Albert Humphrey advocated that the six categories: 1. 2. 3. 4. 5. 6. Product (what are we selling?) Process (how are we selling it?) Customer (to whom are we selling it?) Distribution (how does it reach them?) Finance (what are the prices, costs and investments?) Administration (and how do we manage all this?)

Indias Retail Business Environment High population density in the metropolitan cities and Tier-1 towns has been driving geographic penetration of organized retail. While the situation in the segment is highly dynamic and ever changing, currently retail penetration is the highest in the southern states, reducing as one move towards the west, north and the east. Shoppers Stop:

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Enrollment No: PRODUCT AND SERVICES MARKETING

A lifestyle retailer, this venture, run by the C K Raheja wing of the K Raheja family, focused on the luxury segment, particularly high opportunity segments. This includes home improvement through Home Stop, infant and mothers-to-be through Mothercare (a franchise with Mothercare plc), cosmetics and beauty care through M A C, Clinique (a retail agreement with Estee Lauder) and Arcelia, books and music through Crossword and airport retailing through a JV with Switzerlands Nuance.

Pantaloon: Pantaloon Retail (PRIL), founded by Kishore Biyani in 1987, is the largest player in the retail sector and is present in both lifestyle as well value retailing segments. It has marked its presence at almost all price points, forming strategic JVs and subsidiaries to cater to all agegroups and offering all product categories under multiple retail formats. Effective January 1, 2010, PRIL demerged its value retailing division into its wholly-owned subsidiary, Future Value Retail, to unlock value for its shareholders and increase its focus on individual retail segments. Excluding Future Value Retail, PRILs turnover touched Rs 602.1 crore for the March 2010 quarter. It had 10.9 million square feet (mn sq ft) of retail space and more than 891 stores under its wings.

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Enrollment No: PRODUCT AND SERVICES MARKETING

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