A Research Paper on

Brand Loyalty to E- Loyalty:

The Road Map to Success
(Minor Project Report) Report submitted in partial fulfilment of the requirement for the award of the degree of PGDM

Compiled by: Sanjay Singh PGDM IInd semester Section A Research Guide under: Dr. Awadhesh Kr Tiwari Assistant Professor DSPSR

Declaration

This is to certify that Report entitled Brand Loyalty to E- Loyalty: The road map to success which is submitted by me in partial fulfillment of the requirement for the award of PGDM to Delhi School of Professional Studies and Research, Delhi comprises only my original work and has not been submitted in part or full for any other degree or diploma of any university. If any material has been taken from an external source of information then it has been properly cited in text and duly acknowledged under references.

(Sanjay Kumar Singh) PGDM IInd Semester

(Dr. Awadhesh Kr Tiwari) Research Guide

ACKNOWLEDGEMENT

I would like to take this opportunity to thank Dr. Awadhesh Kr Tiwari, my Business Research Paper coordinator, for giving me the inspiration to complete this project in such a limited period of time. I am thankful to him for providing us valuable inputs and suggestions on this project.

Mr.Sanjay Kumar singh

S.NO 1. 2. 3. 4. 5. 6.

Contents Introduction Objective Literature review Research Methodology Data Analysis Data Interpretation

Page no. 5 6 7 8 9-11 12-14

7. 8. 9. 10.

Findings Recommendations Conclusion References

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INTRODUCTION

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 advocacyIn traditional consumer marketing, the advantages enjoyed by abrand with strong customer loyalty include ability to maintain premiumpricing, greater bargaining power with channels of distribution, reducedselling costs, a strong barrier to potential new entries into theproduct/service category, and synergistic advantages of brand extensions torelated product/service categories (Reichfeld, 1996). The advent andgrowth of "Business to Consumer" (B2C) e-commerce has magnified theimportance of building a loyal visitor base to an e-commerce website (eloyalty).Most B2C e-business models have relied initially on an intensiveeffort to generate a large enough customer base and subsequently onachieving profitability based on a lifetime revenue potential from eachloyal customer (Porter, 2001). Despite the importance of e-loyalty tobusiness success in online consumer marketing, little theoretical researchhas been done so far in this field. Most of the research has been confined topractitioner-oriented suggestions on how to build loyalty to commercialwebsites (Smith, 2000; Reichfeld&Schefter, 2000).

Objective:
The objective of this research paper is to interpret traditional brand loyaltyin the context of online buyer behavior in order to bring out the similaritiesand differences between traditional brand loyalty and the modern concept of e-loyalty. In thisprocess we develop a conceptual framework of e-loyalty and its underlying drivers. We have also considered the implications for e-marketing practice and the path the future research might take.

Literature Review

E-loyalty : A Conceptual Framework Based on the above review of the literature, we propose the followingmodel of e-loyalty (see Figure 1) with the underlying drivers consisting of(1) Value Propositions (2) Brand Building (3) Trust and Security (4)Website & Technology and (5) Customer Service. Value Propositions Product customization and interactivity are two unique value propositionsthat contribute to eloyalty in online buyer behavior. A recent ModemMedia and Greenfield survey showed that a majority of web shoppersprefer websites that offer customized products and information. Thisclearly indicates the importance of mass customization in creating eloyalty.Customization is the result of the interactive involvement of thecustomer in the design of his/her ideal product. The computer manufacturer, Dell, has successfully implemented the approach of buildyour own computer through the use of Choiceboards (Slywotzky, 2000).The high involvement in the product design on the part of the buyerinherently creates a stronger affective relationship with the brand that subsequently leads to brand loyalty. The accumulated customer knowledgebase over several transactions allows the e-marketer to sharpen thecustomized offerings and prevent competitive inroads. The combination ofcustomer involvement in product design and a well-known brand with associated product quality and guarantees increases the probability thatproduct performance meets customer expectations.Traditional brands with high brand loyalty have enjoyed a certain degree of immunity from price-based competition and brand switching(Dowling & Uncles, 1997). In e-markets, however, this immunityTraditional brands with high brand loyalty have enjoyed a certaindegree of immunity from price-based competition and brand switching(Dowling & Uncles, 1997). In e-markets, however, this immunity issubstantially diminished due to how easy price comparing among shoppingagents is (Turban et al., 2000) and due to the fact that competition is just one click away. So being in a competitive price range is more importantfor e-businesses in developing and maintaining customer loyalty(Reichheld&Schefter, 2000).

Research Methodology

Secondary source of Data through various websites

Research design: Exploratory Research

Data Analysis

Theoritical Background: The concept of brand loyalty has been extensively discussed traditionally emphasis on two different dimensions of the concept:
(a) Behavioral loyalty (b) attitudinal loyalty.

with the main

A definition integrating this multidimensionalconstruct has been given (Oliver, 1999) as: "a deeply held commitment torebuy or repatronize a preferred product/service consistently in the future, thereby causing repetitive same-brand or same brand-set purchasing,despite situational influences and marketing efforts having the potential tocause switching behavior."Engendering and enhancing e-loyalty is a core objective of loyalty marketing a strategy employed by businesses in order to increase the loyalty of customers and other stakeholders in the drive to meet or surpass designated commercial objectives.Schultz (2000) describes customer/brand loyalty in cyberspace as an evolution from the traditional product driven, marketer controlledconcept towards a distribution driven, consumer controlled, andtechnology-facilitated concept. In addition, eloyalty also has severalparallels to the store loyalty concept (Corstjens&Lal, 2000)such as building repeat store visiting behavior as well as the purchase of establishedbrand name items in the store. As extensively discussed in Schefter andReichheld (2000), e-loyalty is all about quality customer support, on-timedelivery, compelling product presentations, convenient and reasonably priced shipping and handling, and clear and trustworthy privacy policies.The sections that follow illustrate the similarities and differences betweentraditional brand loyalty and e-loyalty.

Attitudnal Loyalty The traditional conceptualization of attitudinal brand loyalty includescognitive, affective, and behavioral intent dimensions. Conventional brandloyalty development efforts have relied substantially on brand imagebuilding through mass media communications. In e-marketplaces, however, database technology makes it possible to put more emphasis onthe cognitive dimension by offering customized information. As forstrengthening the affective dimension, in e-loyalty the roles of trust,privacy, and security come into sharper focus.

Behavioral Loyalty Attitudinal loyalty without behavioral loyalty has no financial benefit, but behavioral loyalty without attitudinal loyalty is not sustainable, for all the reasons outlined in your post. Therefore, BOTH types of loyalty are important, and each reinforces the other.Dick and Basu (1994). Behavioral loyalty can be expressed in differentways. For example, customers can be loyal to brands and/or they can be loyal to stores as discussed in Corstjens and Lal (2000). When the conceptof behavioral loyalty is extended to the e-marketspace, both the conceptualand measurement issues become more complex and sophisticated. Factorssuch as repeat site visits without purchases and extent of time spent at the e-commerce site (site stickiness) have to be considered (Smith, 2000).The importance of satisfying a customer in order to create behavioralloyalty is discussed extensively in Schultz (2000). A satisfied customertends to be more loyal to a brand/store over time than a customer whosepurchase is caused by other reasons such as time restrictions andinformation deficits. The Internet brings this phenomenon further to thesurface since a customer is able to collect a large amount of relevant information about a product/store in an adequate amount of time, whichsurely influences the buying decision to a great extent. In other words,behavioral loyalty is much more complex and harder to achieve in the espacethan in the real world, where the customer often has to decide with limited information.

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Brand Identity What is the identity of a brand? Our first answer might be that it is what the brand 'says' to consumers -- making a distinction between what it says and how they understand it.The notion of identity is still too little used by managers, and that's a shame, because to our way of thinking it offers some very useful and concrete glimpses into the essence of the brand phenomenon itself. It constitutes the foundation and the federating element of all the activities we have designated as being manifestations of the brand.We sometimes have a tendency to confine brand identity to the intuitive, affective sphere, which the company's concrete and methodical processes cannot influence. Yet tools for analysis do exist, originating in the field of semiology, with which this area can be at least partially rationalized and provide very concrete lessons about managing a brand. . .

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Data Interpretation

What should a marketer do to build its brand? Brand building activities are divided into two major areas: brand image building and frequency programs.

The Brand Image Impression in the consumers' mind of a brand's totalpersonality (real and imaginary qualities and shortcomings). Brand image is developed over time through advertising campaigns with a consistent theme, and is authenticated through the consumers' direct experience. Like brand personality, brand image is not something you have or you don't! A brand is unlikely to have one brand image, but several, though one or two may predominate. The key in brand image research is to identify or develop the most powerful images and reinforce them through subsequent brand communications. The term "brand image" gained popularity as evidence began to grow that the feelings and images associated with a brand were powerful purchase influencers, though brand recognition, recall and brand identity. It is based on the proposition that consumers buy not only a product (commodity), but also the image associations of the product, such as power, wealth, sophistication, and most importantly identification and association with other users of the brand. In a consumer led world, people tend to define themselves and their Jungian "persona" by their possessions. According to Sigmund Freud, the ego and superego control to a large extent the image and personality that people would like others to have of them.Good brand images are instantly evoked, are positive, and are almost always unique among competitive brands.Brand image can be reinforced by brand communications such as packaging, advertising, promotion, customer service, word-of-mouth and other aspects of the brand experience.Brand images are usually evoked by asking consumers the first words/images that come to their mind when a certain brand is mentioned (sometimes called "top of mind"). When responses are highly variable, non-forthcoming, or refer to non-image attributes such as cost, it is an indicator of a weak brand image.

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Frequency Programs Frequency Marketing is a term that relates to marketing programs that aim to maintain or increase the frequency of visits, purchases, orders etc. of customers in order to maximise their profit contribution over-time. Such programs, more often termed as loyalty programs (or loyalty programmes), recognise and reward customers based on purchasing behaviour.A frequency marketing program is a means to an end; it is the means in which companies are able to identify its best customers and once identified, enables companies to recognise and reward those customers in order to keep them loyal. A frequency marketing programme also enables companies to identify potential best customers and market to them. Customer recognition and reward then come into play accordingly.Frequency marketing programmes need to be innovative and motivating enough for customers to want to join while volunteering information about themselves, such as name and address, therefore enabling companies to identify and communicate with selected customers. The most basic identifying information could simply be a name and an accompanying email address. Rich information, provided on an application for a loyalty card for instance, will give an address, an age demographic, previous purchase information and a whole range of other specific information, such as consumption of media, frequency of holidays, even income bracket.Every time a frequency marketing (or loyalty) card is used, this identifies the customer, and links relevant transactions to their record. Companies then analyse this data and turn it into knowledge (either on a non-aggregate or aggregate level) and use this accumulated insight to reward customers with the objective of retaining or growing their profit contribution.

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Trust and Loyalty

The role of trust in building and maintaining brand loyalty has beenresearched extensively in both consumer and business-to-business buyingsituations (Cowles, 1997; Doney& Cannon 1997; Chaudhuri& Holbrook2001). Trust plays a central role in augmenting both behavioral and attitudinal loyalty which in turn influences marketing outcome relatedfactors like market share maintenance and price elasticity. In the field of eloyaltyseveral structural models of trust and its relationship to repeat visitsto e-commerce sites have been presented (Jevons &Gabbott, 2000). Privacy has emerged as a unique and important dimension of e-loyalty(Ratnasingham, 1998).

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Findings

Based on the conceptual framework of drivers of e-loyalty presented in this paper, several important future research questions arise. (a) there is the need to move from practitioner oriented descriptive research to a more theoretically based model of e-loyalty. For instance, there needs to be: study of the relative importance of the different drivers in buildinge-loyalty--are trust and security factors more important thanwebsite navigation ease in building e-loyalty. comparative research on the relative importance of the differentfactors in driving brand loyalty in traditional and e-marketplaces.

Another dimension of research deals with the measurement issues in e-loyalty.Due to the easy availability of a multitude of behavioral measuresof e-loyalty (such as the repeat visit rate to websites, the amount of timespent by an individual at a website, etc.), there has been a preoccupation with the use of site visit statistics as a surrogate for brand loyalty.However, as suggested in our framework, it is important to gobeyond just the behavioral dimension of loyalty and also consider theattitudinal and behavioral intent dimensions which would lead the brand to the ladder of success. An integrated measure of e loyalty would be the objective of such a measurement.After the brutal set of the promises that stated to be potential of B2C

ecommerceand the subsequent reality of recent disappointments,online buying and marketing is expected to grow. E-loyalty will continueto be a key success factor in e-commerce. Building and maintaining eloyalty will be a challenge in the highly competitive and fickle world ofonline shopping. Understanding the drivers and dynamics of how customerloyalty is developed and maintained in cyberspace with the help of anintegrated theoretical framework is critical to developing future marketing strategies in this area.

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RECOMMENDATION

y A Marketer should more focus on E-Marketing. y Marketer should use the Internet as a market and provide ideas,goods and services on it. y They can advertise over there because in now a days internet is more convenient source of getting knowledge about anything. y They should provide safety and security. y The process of e-business must be easier so that non technical people can also do their business. y Marketer should provide full information about product that consumer dont get confused at the time of processing over there.

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Conclusion

Brand loyality is a most important factor in marketing.If a company have good brand loyality then they can easily capture more number of market share.In this context E-loyality play a vital role to awareness of product,advertising and building relationship with consumer and potential customer.E-business provide large for business.In present scenario trend of E-loyality is growing very rapidly and providing lots of opportunities.

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References
Corstjens, M. &Lal, R. (2000) Building Store Loyalty through Store Brands, Journal of Marketing Research, 37 (3): 281-292. Cowles, D. (1997) The Role of Trust in Customer Relationships: Asking the Right Questions, Management Decision, 35 (3/4): 273-283. Crisis RX for Double Click. (2000) Advertising Age, 71 (9): 58. Helmsley, S. (2000) Keeping Custom, Marketing Week (UK), 23 ( 7): 39-42. Hoffman, D., Novak, T., & Peralta, M. (1999) Information Privacy in the Marketspace: Implications for the Commercial Uses of Anonymity on the Web, Information Society, 15 (2): 129-140. Jevons, C. &Gabbott, M. (2000) Trust, Brand Equity and Brand Reality in Internet Business Relationships: An Interdisciplinary Approach, Journal of Marketing Management, 16 (6): 619-635.

Websites: www.encyclopedia.com www.google.co.in www.dell.com

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