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2.7
Brand loyalty and social media ... 50
3. METHODOLOGY
...
52
3.1 Research
design
...
54
3.1.1 Research
approach
...
54
3.1.1.1 Exploratory
approach
...
55
3.1.1.2 Explanatory
approach
...
55
3.1.2 Research
methodology
...
55
3.1.2.1 Qualitative
...
56
3.1.3 Research
strategy
...
57
3.1.3.1
Case study method ... 58
3.1.4
Data collection ... 59
3.1.4.1
Secondary data and empirical material sources ... 60
3.1.4.2
Primary data and empirical material sources ... 61
4. DATA
ANALYSIS
...
62
4.1
The impact of social media platforms on brand awareness ... 62
4.1.1
Facebook as a tool ... 63
4.1.2
Twitter as a tool ... 65
4.1.3
Instagram as a tool ... 66
4.1.4
YouTube as a tool ... 68
4.1.5
WordPress as a tool ... 70
4.2
The impact of social media platforms on brand loyalty ... 71
4.2.1
Facebook as a tool ... 72
4.2.2
Twitter as a tool ... 73
4.2.3
Instagram as a tool ... 74
4.2.4
YouTube as a tool ... 75
4.2.5
WordPress as a tool ... 76
5. CASE
COMPANY
...
78
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5.1
The moments to the memories ... 79
5.1.1 Philosophy
...
79
5.1.2 History
...
80
5.1.3 Corporate
responsibility
... 81
5.2 Social
media
activities...
82
6. THE CASE COMPANY ANALYSIS ... 83
6.1
Usage of social media platforms in creating brand awareness ... 84
6.2
Usage of social media platforms in building brand loyalty... 87
7. CONCLUSION
...
90
7.1 Study
findings
...
90
7.2 Conclusion
...
92
7.3 Future
research
suggestions
...
94
7.4 Recommendations
...
95
8. LIST
OF
REFERENCES
...
97
Books, articles and essays ... 97
Internet sources ... 99
V. APPENDIX
...
117
VI. STATUTORY
DECLARATION
...
122
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III.
LIST OF FIGURES AND GRAPHS
Table 1: Brand functions ... 15
Table 2: Different approaches to measuring brand equity ... 17
Figure 1: The Loyalty Pyramid ... 23
Figure 2: Outcome of customer loyalty ... 26
Table 3: Comparing goods and services ... 27
Figure 3: Four services characteristics ... 29
Table 4: Major differences between traditional and social media ... 32
Figure 4: Social media penetration ... 34
Figure 5: Attention levels on TV and YouTube ... 46
Table 5: The differences between qualitative and quantitative methodology ... 56
Figure 6: Sources of secondary data ... 60
Graph 1: In-stream and in-display ads ... 69
Graph 2: Linde Werdelin on Instagram ... 74
Graph 3: WordPress Appearance sidebar ... 77
Graph 4: WordPress Media and Links sidebar ... 77
Graph 5: Panoramic view of Fairmont Baku and Baku city ... 80
Graph 6: Fairmont Baku and old Inner City ... 81
Graph X: Fairmont Baku and Caspian Sea ... 81
Graph 8: Name this location option on Fairmont Baku Instagram account ... 86
Figure 7: Brand awareness and social media relations ... 90
Figure X: Brand loyalty and social media relations ... 91
Figure 9: Brand awareness and social media relations, Fairmont Baku ... 91
Figure 10: Brand loyalty and social media relations, Fairmont Baku ... 92
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IV. LIST
OF
ABBREVIATIONS
AMA
American
Marketing
Association
B2B
Business-to-business
CSR
Corporate
social
responsibility
FO
Front
office
FRHI
Fairmont Raffles Hotels International
LW
Linde
Werdelin
MIPIM
Le marché international des professionnels de l'immobilier
P&G
Procter and Gamble
PR
Public
relations
ROI
Return
on
investment
SME
Small
and
medium
enterprises
UK
The United Kingdom
USA
The United States of America
WWW
World wide web
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1. INTRODUCTION
Brands with the higher product / service components, as per Professor Leslie
de Chernatony (cited in Pickton and Broderick, 2005), consist of the strength of
the brands which are the essential prosperity of the organisation. Brands create
a value for both customers and firms (Keller, 2008). According to Clifton et al.
(2009), strong brand positioning creates unique competitive advantages and
helps organisations to work effectively and efficiently.
In Fortune Magazine, which is published in 1997 (cited in Clifton et al., 2009, p.
17) the future importance of branding has already been mentioned as follow: `In
the twenty-first century, branding ultimately will be the only unique differentiator
between companies. Brand equity is now a key asset'. Brand equity is highly
important, because it significantly increases profitability (Kim and Kim, 2005
cited in Kayaman and Arasli, 2007) and it has a great potential to create the
value to customers in building confidence, boosting buying capability as well as
to create the value to enterprises by building brand loyalty, developing effective
and efficient marketing position, improving profit margins and so on (Bagozzi,
Rosa, Celly and Coronel, 1998 cited in Pekka, 1999). Aaker (1996, pp. 7-8)
defines brand equity as `a set of brand assets and liabilities linked to a brand, its
name and symbol, that add to or subtract from the value provided by a
product or service to a firm and / or to the firm's customers'. As per Aaker
(1991) brand equity has following assets and liabilities: brand awareness,
perceived quality, brand associations, brand loyalty, other proprietary brand
assets. All these categories provide the value for customers as well as firms
(Aaker, 1991).
Brand awareness, being the first component of brand equity, has a great impact
on the presence in the consumer's mind (Aaker, 1996) and replacing the brand
in and selecting the brand from the consideration set (Macdonald and Sharp,
2000, 2003). It is believed that the retention of existing customer is less costly
than acquiring the new one. That is why the strategic approach is necessary in
order to build a relationship between customer and firm which the former later
on turns to be a loyal consumer to the brand. The loyal customer creates brand
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loyalty. According to Aaker (1991, 1996), brand loyalty, by being basis of brand
equity, generates profit and sales to the firm. According to one study, both
brand awareness and brand loyalty have a strong positive association with
purchase (Malik et al., 2013) and revisit intentions (Kim, Jin-Sun and Kim,
2008).
Research carried by Nielsen highlights that the number of online users, who are
willing to take a purchasing decision, is seeking for online product reviews,
recommendations from discussion forums or feedback from social media sites
are more than two-thirds of overall global internet users (Interbrand, 2012). By
supporting this idea Rubbinstein and Griffiths (Interbrand, 2012) argue about
the impact of social media on building a brand personality and creating a
constant relationship between business and consumer.
In order to build and sustain brand loyalty online, companies should understand
and manage digital conversations, reviews and create true experience online for
consumers (Interbrand, 2012). According to The AMA Marketing Watch (2013),
social media channels such as video and photo sharing, blogs, microblogs,
email, social networks, etc. are the main tools to enhance overall brand
awareness.
1.1 Scope of the research
The social media with the hundreds of millions of internet users has a great
potential to reach to a large audience in order to establish brand awareness.
This study intends to show the impact of social software applications those are
essential in building loyalty between the customer and the company.
Furthermore, social media is a virtual space where people search for
entertainment, fun and valuable information to share with the others. Therefore,
social software applications are essential in building loyalty between the
customer and the company by providing what consumers demand.
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1.1.1 Purpose of the study
The purpose of this study is to examine how social media platforms influence
the brand loyalty and awareness. The careful investigation of social media
channels and the results of the study aim to be applied to case company, a
Fairmont Baku hotel, in order to create brand awareness and build brand
loyalty. First of all the social media platforms / tools will be analysed and applied
to create brand awareness. Secondly, the social media platforms / tools will be
chosen to build consumer loyalty in relation to the brand. Thirdly, the hotel's
existing online brand strategy will be analysed. Afterwards, the results of the
first two analyses will be compared and applied to the third study.
1.1.2 Research
questions
The easy accessibility of the internet enables to grasp the consumer groups and
create brand awareness for those target groups who are tough to reach offline
(Keller, 2009 cited in
Zailskaite-Jakst and Kuvykait, 2013). Nowadays, it is
obviously hard to set branding campaign without taking into consideration of the
importance of social media and its tools. Therefore, this research aims to
understand how brand awareness and brand loyalty are created by the help of
the social media platforms / tools, centred on the following main research
question:
MQ. How to manage brand awareness and brand loyalty through social media
effectively in the hospitality industry?
Some sub-questions are mandatory to answer the main question:
SQ1. What are the roles of social media tools in creating brand awareness?
SQ2. How to build brand loyalty through the social media platforms?
1.2 Structure of the study
This master thesis consists of seven chapters. The first chapter is designed to
give insight to the topic. In the scope sub-chapter of introduction part the
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purpose of study as well as research questions are described. Prior to giving a
quick introduction about the methodology thesis delimitations are going to be
described.
In the second chapter, the relevant literature is going to be reviewed. It mainly
encompasses brand and brand equity, service brand theory and social media.
Respectively, brand equity components such as brand awareness and brand
loyalty are introduced. In addition, social networks, microblogs and blogs, video
and photo sharing social media platforms are going to be defined and lined up.
Successively, the chapter will be concluded by taking a deep look into the social
media platforms from brand awareness and brand loyalty point of view.
The core intention of the third chapter is to illustrate a scientific approach to the
topic. Thus, research approaches, relevant research methodologies and
strategies, data collection methods as well as researchers perspective are
going to be selected according to the chosen topic.
The fourth chapter is mainly devoted to the analysis of the reviewed literature of
the social media impact on brand awareness and brand loyalty indeed.
The case company is going to be presented in the following fifth chapter. Firstly,
the overall information about case company is going to be provided. Lately, the
social media strategy of the case company will be elucidated.
In the sixth chapter, the case company's social media strategy usage in building
brand awareness and brand loyalty will be analysed.
The conclusion part thoroughly will be culminated in the seventh chapter. The
study findings, conclusion, the future research suggestions as well as
recommendations for case company will be the main focus of this chapter.
The sources which are going to be utilized in this master thesis will be listed in
the last chapter eight.
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1.3 Delimitations
It is already mentioned in the chapter 1.1.1 that the main purpose of this master
thesis is to analyse the effects of the social media platforms in building brand
awareness and brand loyalty. The brand management as a topic is an intensely
vast area of research. By considering this, the author narrows topic down to the
specific part `Brand Equity'. The brand equity by itself is also a broad topic.
Previously (see chapter 1) mentioned, brand equity has five components, yet
two of them, brand awareness and brand loyalty, are going to be the focal point
of this research. The brand awareness has been chosen because of the
familiarity and recognition effect it creates (Aaker, 1991; Keller, 2008). On the
other hand, targeting new customer is the way more expensive than retaining
the existing one. The customer who is loyal to the brand can attract the stream
of the profit to the enterprise. (Aaker, 1991, 1996)
Nowadays, the social media are changing the way how marketers react to the
existing market. Therefore, the social media plays a very important role in
branding. However, the social media is also an immensely wide topic to
research. The author focuses mainly on the specific platforms, such as social
networks, blogs, microblogs, video and photo sharing. Additionally, it is
important to mention that all these platforms consist of different kind of tools. In
order to limit the research scope, the author selected one tool from each
platform. For example, Facebook from social networks, Twitter from microblogs,
WordPress from blogs, YouTube from video sharing and Instagram from photo
sharing platforms. (Evans, 2008)
In addition, this research focuses on building brand awareness and brand
loyalty through the social media platforms. Therefore, measuring the
effectiveness of the influence of the social media platforms on creating brand
awareness and brand loyalty is beyond the frame of this study.
Finally, the findings of this research will be compared and applied to the case
company. The case company, a Fairmont Baku hotel, is a Canadian based
luxury, chain hotel situated in Azerbaijan. That is why, the result of the
comparison must not to be generalised to the whole service industry as well as
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other countries. Because different companies use various social media tools
and some might have a social media strategy based on the target group as well
as the region.
1.4 Introduction to methodology
Prior to reviewing the literature in the following chapter, the author hereby poses
a concise introduction to the methodology (see chapter 3 for a detailed
description). The research question(s) define(s) the way researcher is going to
uncover the facts those will help to gain the replies to the designed question(s).
The research design is intensely vital in guiding to achieve the research goal. It
is like a paved road in the uneven environment. First of all, the right approach(s)
should be developed to define the proper research methodology (qualitative or
quantitative). Meanwhile, the research strategy (case study method) helps to
focus on specific case to probe the research topic in depth. Finally, to assemble
the necessary information to answer the question(s), secondary as well as
primary sources have been used in this study. The designed questionnaire as
the primary source has been sent to the case company.
2. LITERATURE REVIEW
This section of the study is going to review literatures which are written in the
area of the following subjects: brand, service brands, brand equity, brand
awareness, brand loyalty, social media, social media platforms and the
relationships between social media and brand awareness and loyalty. The
essential intention of the literature review is to fully understand all the concepts
and perspectives about the below mentioned subjects which are going to
contribute great comprehension about the research topic.
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2.1 What is a Brand?
Obviously, nowadays the role of the brand is undeniably important in the
company's business portfolio. According to Clifton et al. (2009, p. 18), `[b] rands
can generate high-quality earnings that can directly affect the overall
performance of the business and thus influence the share price'.
Historically, the meaning of brand derives from Old Norse of North Germanic
language which original form was brandr means to burn. The initial use of
brand utilized in Anglo-Saxon. The symbol of the owner was stamped on the
livestock. The emblems which had a high quality reputation among the others
were respectful and more searched ones. In ancient civilisations symbols are
also used to differentiate brands. Especially, potters were using private symbols
under their product to be identified easily by others. Obviously, it drives us to
believe that symbols were the earliest form of the brand. (Clifton et al., 2009)
As stated in American Marketing Association (AMA), `brand' and `Brand' have
different implications. As it is highlighted `brand' is a `[n] ame, term, design,
symbol, or any other feature that identifies one seller's good or service as
distinct from those of other sellers' (AMA dictionary, 2014b). On the other hand,
`Brand' means `[...] a customer experience represented by a collection of
images and ideas; often, it refers to a symbol such as a name, logo, slogan, and
design scheme. Brand recognition and other reactions are created by the
accumulation of experiences with the specific product or service, both directly
relating to its use, and through the influence of advertising, design, and media
commentary.' (AMA dictionary, 2014a) Hence, a brand has prosperous imagery
and definitions that in the consumer's perception occupies in various identified
functions (Mooradian, Matzler and Ring, 2012).
As per Pickton and Broderick (2005, p. 242), `[...] a brand is a set of attributes,
that have a meaning, an image and produce associations with the product when
a person is considering that brand of product'. Chernatony (in Pickton and
Broderick, 2005) explains brand as an added value to the product in
comparison to its equivalent commodity form. King (cited in Aaker, 1991)
differentiate products from the brand by mentioning their functions in the
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enterprise. As per him, a product is an item which can be copied by competitors
and is produced by an industrial way and briskly deteriorates. Contrary to that,
the brand is a feeling purchased by the customer in a unique and timeless
manner. Therefore, the brand is considered more than a product in a way that it
satisfies the same need which other products lack to display (Keller, 2008).
Keller (2008) explains these differences as rational and tangible, in a form of
product performance of the brand and symbolic, emotional, and intangible, in a
way brand poses.
`Atomic model' of the brand by de Chernatony (1993a, 1993b cited in de
Chernatony and Riley, 1998) integrates tangible and intangible relationship
within nine elements: 1) functional capability; 2) symbolic feature; 3) service; 4)
distinctive name; 5) ownership; 6) shorthand notation; 7) legal protection; 8) risk
reducer; and 9) strategic direction.
As reported by Wood (2000, p. 666) `[a] brand is a mechanism for achieving
competitive advantage for firms, through differentiation (purpose). The attributes
that differentiate a brand provide the customer with satisfaction and benefits for
which they are willing to pay (mechanism)'. It can be implied that brand creates
competitive advantage and provides income to the company.
By supporting the Wood's idea it could be relevant to mention and compare
brands' benefits for consumers as well as for companies highlighted in table 1:
Table 1: Brand functions
For consumer
For companies
x Signalling: Brands signal quality and
security, and ensure expected
satisfaction with the product
x Reducing risk: Brands reduce the
perceived risk for customers, which
is particularly important on the
internet (Rubinstein and Griffiths,
2001, p. 397)
x Facilitating purchase: Buyers can
easily choose the same service or
product again if they were satisfied
x Customer
loyalty
x Higher
willingness
to
pay
x Securing competitive advantage
x Competitive
protection
x Legal
protection
x Protection from copying
x Increasing marketing communication
efficiencies
x Attracting
higher-quality employees
x Stronger support from supply chain
partners
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x Simplifying choice (Rubnstein and
Griffiths, 2001, p. 396)
x Growth opportunities (brand
extensions)
x Customer and market segmentation
Source: Lis and Berz, 2011, pp. 198-199.
Overall, it becomes apparent that the term brand has several meanings
according to different thoughts produced by scholars. However, one is obvious
that the brand is an inseparable part of the company indeed. It could be also
summed that brands are the core competency of the all types of enterprises and
should be considered as a main competitive advantage of the strategy. It is
highlighted that brands were very important to build a reputation among
competitors and it is essentially up to these days as well. Although the brand is
a commodity like a product, it differs from others by the value which it adds to
the brand.
2.2 Brand equity as an asset
Brand equity, as a concept, emerges in 1980s and is a widely discussed term in
business as well as the academic world since those times. There are lots of
different explanations about brand equity. For example, one of the popular
definitions created by Aaker (1991, p. 15) `[b] rand equity is a set of brand
assets and liabilities linked to a brand, its name and symbol, that add to or
subtract from the value provided by a product or service to a firm and / or to that
firm's customers'. Keller sites the brand equity as `the differential effect of brand
knowledge in customer's response to the marketing of a brand' (cited in Nam,
Ekinci and Whyatt, 2011, p. 1010). Cooper and Simons define brand equity as
`the strength, currency and value of the brand [...] the description, and
assessment of the appeal, of a brand to all target audiences who interact with it'
(cited in Pickton and Broderick, 2005, p. 254). As stated in Kotler (2000) brand
equity is measured by the number of the satisfied customers, the value given by
customers and the customer dedication to the brand.
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Different scholars and research institutes have own radical approaches to the
brand equity. It is clearly displayed in table 2:
Table 2: Different approaches to measuring brand equity
Proposer
Factors measured
David Aaker
x Brand
awareness
x Brand
loyalty
x Perceived
quality
x Brand
associations
x Other proprietary brand assets
Millward Brown
Brand Dynamic
x Presence
(e.g.
familiarity)
x Relevance to consumer needs
x Product
performance
x Competitive
advantage
x Bonding (e.g. endorsement on key attributes)
Total Research
Equitrend
x Salience
x Perceived
quality
x User
satisfaction
Interbrand
x Brand
weight
x Brand
breadth
x Brand
depth
x Brand
length
Young & Rubicam Brand asset
valuator
x Differentiation + Relevance = Strength
x Esteem and Knowledge = Stature
Kevin Keller
x Brand
Knowledge
Brand
awareness
Brand
image
Source: Own illustration based on Pickton and Broderick, 2005, p. 255.
The brand equity consists of two parts: organisational brand equity and
customer brand equity (Capon, Berthon, Hulbert and Pitt, 2001). The financial
values such as tangible assets manufacturing assets, land and buildings,
receivables and investments; intangible assets return on investment (ROI),
measures of price relatives (Clifton et al., 2009) are the base of the
organisational brand equity. On the other hand, the customer brand equity
focuses on the social values which depend on wealth creation such as health,
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education, living standards (Clifton et al., 2009). The second value created by
customer brand equity pinpoints consumer's comprehension, attachment,
attitude, preference, loyalty, awareness and so on about the brand (Aaker,
1991, 1996; Agawal and Rao, 1996; Blackstone, 1995; Dyson, Farr and Hollis,
1996; Keller, 1993; Lassar, Mittal and Sharma, 1995; Vazquez, Del Rio and
Iglesias, 2002; Yoo and Donthu, 2001; Yoo, Donthu and Lee, 2000 cited in Kim,
Jin-Sun and Kim, 2008).
The focal point of brand equity research in marketing and branding field is a
customer viewpoint about the brand (Aaker, 1991, 1996; Keller, 2008; Kim, Jin-
Sun and Kim, 2008; Macdonald and Sharp, 2000, 2003; Nam, Ekinci and
Whyatt, 2011; Tuominen, 1999). Particularly, `the power of a brand lies in what
resides in the minds of customers' (Keller, 2008, p. 48).
According to Keller (1993 cited in Wood, 2000), customer-based brand equity
happens when the customer adds the brand into their mindset, which in itself
creates some favourable, strong and unique brand associations. Keller (2008,
p. 48) stresses customer-based brand equity as `the differential effect that brand
knowledge has on consumer response to the marketing of that brand'.
As it is mentioned in table 2, Aaker (1991, 1996) divides customer-based brand
equity into following asset categories: brand awareness, brand loyalty,
perceived quality, brand associations and other proprietary brand assets.
Brand awareness as per Rossiter and Perey (1987 cited in Macdonald and
Sharp, 2003) is essential for forming the basic communication which is the
basis of all other considered steps in branding.
In accordance with Newman and Werbel (1973 cited in Rai and Srivastava,
2012), brand loyalty appears when the same customer is choosing the same
brand without searching for any information related to it.
Perceived quality is considered as a financial performance driver for the
business as well as the overall quality and excellence of a product / service in
pursuance of its intended purpose (Aaker, 1991, 1996).
When customer links some characteristics, symbols, images and etc. with the
brand in their memory, then it calls the brand associations (Aaker, 1991, 1996).
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Aaker (1991) remarks patents, trademarks, and channel relationships in other
proprietary brand assets category.
By sticking to the frame of this study, in the following sub-chapters deep insight
and different approaches about brand awareness and brand loyalty are going to
be presented.
2.2.1
Brand awareness
The brand awareness in AMA Dictionary (2014c) is explained as follows: `
[b]
rand awareness is a marketing concept that enables marketers to quantify levels
and trends in consumer knowledge and awareness of a brand's existence'.
As per
Aaker (1991, 1996), awareness is all about brand existence in the consumer's
perception. According to Stokes (1985 cited in Macdonald and Sharp, 2003),
based on the memory theory brand awareness creates the bundle of
associations linked to brand in memory. A brand that has some level of brand
awareness is significantly more inclined to be considered and along these lines
picked, rather than the brands which the customer is uninformed of (Macdonald
and Sharp, 2003). Brand awareness plays a crucial part in the consumer's
consideration set which is important during purchasing phase (Howard and
Sheth, 1969; Narayana and Markin, 1975 cited in Macdonald and Sharp, 2003).
Aaker (1991, 1996) defines brand awareness as a main asset category of brand
equity. However, Keller (2008) adds brand awareness into the brand knowledge
which by itself is the key component of brand equity. In general, it is worth to
say that both scholars divide brand awareness into brand recognition and brand
recall performance (Aaker, 1991, 1996; Keller, 2008).
Brand recognition happens when a past exposure to the brand is gained by the
customer (Aaker, 1996; Keller, 2008). Brand recognition is the basic and first
step in the communication task within the brand awareness and it simply
includes remembering basic components of the brand, even though it should
not necessarily be strong. (Aaker, 1991, 1996)
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Researches in psychology and marketing have shown that brand recognition
creates positive feelings as well as a familiar brand has more chances to be
selected than the unknown brands respectively (Aaker, 1996).
It is obvious that enterprises do not spend money on advertising poor products /
services. Therefore, when the customer sees and remembers the brand, it
certainly is a signal that the brand is worth to purchase. (Aaker, 1996)
Secondly, brand recall different than brand recognition occurs by the
consumer's information resurgence of one brand over the other ones in the
same category (Aaker, 1996; Keller, 2008). Keller (2008, p. 54) clarifies brand
recall as `consumers' ability to retrieve the brand from memory when given the
product category, the needs fulfilled by the category, or a purchase or usage
situation as a cue'.
Keller (2008) discusses that brand recognition is important when the consumer
selects the product (physically visible and touchable) at the point of purchase.
On the other hand, if the consumer takes a decision apart from the point of
purchase then brand recall is happening. Thus, building brand recall is essential
to service and online brands.
Macdonald and Sharp (2003, p. 3) argue that `brand recognition occurs in
stimulus-based situations and recall occurs in memory-based situations. Both
types of awareness would occur in mixed-choice situations'. In consideration of
the fact that stimulus-based situation happens when all the brand nodes are
physically available and memory-based situation occurs when all the related
information about brand recalled from memory and lastly, when the brand is
physically present and recallable from memory then mix-based situation takes
place (Lynch and Srull, 1982 cited in Macdonald and Sharp, 2003).
According to scholars (Aaker, 1991; Keller, 2008; Macdonald and Sharp, 2003),
creating brand awareness has several benefits. Based on Keller's concept
(2008, pp. 54-55) it would be relevant to mention that brand awareness has the
following learning, consideration and choice advantages.
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Learning advantages can be achieved by attaching brand node such as, brand
attributes, associations and image in the consumer's perception (Aaker, 1991).
In other words, to establish the brand in the consumer's mind.
Secondly, it is believed that the strength of brand awareness is highly
associated with a consideration set (Macdonald and Sharp, 2003). Therefore,
the brand that is not considered cannot be opted (Baker et al., 1986 cited in
Macdonald and Sharp, 2003). Recognition creates familiarity factor and people
prefer to buy the familiar brands (Aaker, 1991). In agreement with Keller (2008),
it is more likely to mention that the consumer is buying those brands which have
already resided in his / her consideration set. Hence, as a first step familiarity
factor ignites brand node in mind and in a second step brand recall helps brand
to enter consideration set.
Thirdly, the brand awareness can affect a consumer's choice about the brand in
their consideration set (Hoyer and Brown, 1990; Keller, 2008). It can even
happen in the low involvement. The low involvement could occur while the
enterprises leave the consumers unmotivated about the product / service choice
or the consumer will use shortcuts (familiarity and awareness of product /
service) to decide which product / service to purchase (Keller, 2008).
Above all, to bring all the findings together, it is worth to mention that the brand
awareness, by being the first step of brand equity, exists in brand recognition
and brand recall form and creates familiarity and liking effect on the consumer's
mind which leads to a directly consideration set of brand choice.
2.2.2 Brand
loyalty
According to several studies, brand loyalty has both revisit and (re) purchase
intentions (Day, 1969; Newman and Werbel, 1973; Dwyer, Schurr and Oh,
1987; Fornell, 1992; Zeithaml et al., 1996; Dick and Basu, 1994; Oliver, 1999;
Jaishankar, Arnold and Kristy, 2000; Sirdeshmukh et al., 2002; Kim, Jin-Sun
and Kim, 2008; Malik et al., 2013 cited in Rai and Srivastava, 2012). The brand
loyal customers are the strategic asset of the companies and help the
expansion of the repeat business (Kim, Jin-Sun and Kim, 2008; Pekka, 1999).
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The term loyalty in Oxford Dictionaries (2014a) is characterised as `[t] he quality
of being loyal to someone or something'. Oliver (1999, p. 34) approaches to
loyalty from a wide aspect of defining it as `a deeply held commitment to re-buy
or re-patronize 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 to cause
switching behaviour'.
Brand loyalty, by referring to various studies, has been defined as a repeat
purchase from the service / product provider. According to AMA Dictionary
(2014d), firstly brand loyalty is `[t] he situation in which a consumer generally
buys the same manufacturer-originated product or service repeatedly over time
rather than buying from multiple suppliers within the category'. Secondly, it is `[t]
he degree to which a consumer consistently purchases the same brand within a
product class'. Aaker (1991) stresses out that the brand loyalty is measured by
the customer attachment to the brand. Assael (1992) opined that the brand
loyalty serves a great disposition to the brand which as a result shows that the
customer is only satisfied with the particular brand.
The brand loyalty is a complex phenomenon and all people have different
buying and engaging experiences with the brand. Subsequently, after
purchasing the brand product / service some customers can dislike, like or stay
loyal to the brand. Meanwhile, Aaker (1991) depicts five levels of the brand
loyalty, according to the various types of customers.
The first level of the brand loyalty is non-loyal customers. This type of people is
accepted as switchers or price buyers. In marketing, it is useless to make an
effort to gain those consumers. The customers who are satisfied with product /
service are included in the second level of the loyalty. Namely, in the marketing
industry, they are called habitual buyers. It is worth to address the marketing
efforts to gain those customers because at least there is no any reason for them
to change the brand.
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Figure 1: The Loyalty Pyramid
Source: Aaker, 1991, pp. 39-41.
Third level loyal customers are those people who are satisfied with the product /
service but have switching costs. These types of consumers are very hard to
adopt by competitors. In order to entice those customers, competitors should
offer some benefits to compensate their switching costs such as costs in time,
money or performance risk associated with switching from one brand to
another. Following the level of loyalty is linked to be a friend of the brand. At this
level, the customer develops his / her liking feeling towards the brand and
sometimes they accept the brand by its associations such as a symbol, a set of
user experiences, or a higher perceived quality. The last and top level of the
pyramid (see figure 1) developed by Aaker is taken by the committed customers
who are proud of being a highly welcomed and respected user and member of
the brand. In this stage the customer is impressively satisfied with the product /
service of the enterprise that is going to offer to other people indeed. As an
example to the committed buyer it could be the Harley Davidson rider who
tattoos the company's brand name or associated symbols to his / her body.
Dickson (1994 cited in Tuominen, 1999) by going further depicts seven levels of
the brand loyal customers: emotional, identity, differentiated, contract, switching
cost, familiarity and convenience loyalty. All these types have special
characteristics and vary by the habits of the customer. In order to set effective
Committed Buyer
Likes the Brand - Consdiers it
a Friend
Satisfied Buyer with Switching
costs
Satisfied/Habitual Buyer No
Reason to Change
Switchers/Price Sensitive
Indifferent - No Brand Loyalty
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marketing campaign enterprises should depict their customer loyalty level and
target them to leverage customer attachment to the brand.
The brand loyalty is intensely essential and interesting topic as well as the
business element that the academics and companies take it deeply into
consideration respectively. That is why there are several approaches available
in the marketing literature in relation to the brand loyalty. As per Assael (1992)
there are two approaches exist: a behavioural and an attitudinal. Besides those
two approaches, there is a cognitive loyalty (Bloemer et al., 1999; de Ruyter et
al., 1998; Oliver, 1999 cited in Rai and Srivastava, 2012) available as well.
Assael (1992) and Jones and Taylor (2007 cited in Rai and Srivastava) mention
that the behavioural approach is the main stimulator of the repeat purchase as
well as reinforcement and a healthy stimulus-to-response link (Assel, 1992, p.
87) between the customer and the brand. The brand loyalty, in a behavioural
approach, for Peter and Olson (1996) is simply the repeat purchase behaviour.
According to marketing expert, primarily relying on behavioural approach is
`what people do does not say anything about why they do it. There is no
surrogate available for talking to the consumer' (Assael, 1992, p. 88). Tucker
(1964 cited in Assael, 1992, p. 87) by showing clear behavioural approach
explains: `[n] o consideration should be given to what the subject thinks or what
goes in his central nervous system; his behaviour is the full statement of what
brand loyalty is.' As per Rai and Srivastava (2012, p. 63), behavioural approach
has the following results on loyalty: 1) Repurchasing from the same service
provider (Assael, 1992; Jones et al., 2000; Zeithaml et al., 1996). 2) Lower
switching intentions (Bansal and Taylor, 1999; Dabholkar and Walls, 1999). 3)
Making all purchases in a particular category from a single service provider
(Reynolds and Arnold, 2000; Reynolds and Beatty, 1999)
Secondly, in contrast to the behavioural researchers, the attitudinal researchers
believe that repeat purchases of the brand occur in several attitudinal causes (Li
and Petrick, 2010 cited in Suhartanto and Noor, 2013). The researchers in the
brand loyalty field utilize the attitudinal approach to focus on beliefs, attitudes
and opinions in relation to the consumer buying behaviour (Back, 2005 cited in
Suhartanto and Noor, 2013). Jacoby (1971 cited in Assael, 1992, p. 87) by
taking a strongly attitudinal view explains: `[t] o exhibit brand loyalty implies
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repeat purchasing behaviour based on cognitive, affective, evaluative and
predispositional factors the classical primary components of an attitude'.
Jones and Taylor (2007 cited in Rai and Srivastava, 2012, p. 63) describe
emotion based brand assessment (attitudinal approach) as follows: 1)
Recommending the service provider to others (Butcher et al., 2001; Javalgi and
Moberg, 1997). 2) Strong preference to the service provider (Mitra and Lynch,
1995). 3) Feeling a sense of affiliation with the product, service, or, organisation
(Fournier, 1998). 4) Altruistic behaviour which includes helping the service
provider or other customers for better service delivery (Patterson and Ward,
2000; Price et al., 1995).
Lastly, cognitive loyalty, as per Lee and Cunningham (2001 cited in Rai and
Srivastava, 2012), is a cognitive assessment of a brand and its attributes,
advantages and disadvantages of the repurchasing which makes the consumer
to choose one service provider over the others (Dwyer et al., 1987 cited in Rai
and Srivastava, 2012). Jones and Taylor (2007 cited in Rai and Srivastava,
2012, p. 64) explain the brand loyal customers from cognitive aspect as
following: 1) Occupying a prominent space in the mind of the customer (Dwyer
et al., 1987) 2) Being the first preference of the customer (Ostrowski et al.,
1993) 3) Lesser sensitivity towards price fluctuation (Anderson, 1996; de Rutyer
et al., 1998) 4) Granting a service provider exclusively for a particular service
(Gremler and Brown, 1996) 5) Identifying a service provider as an extension of
one's self and accepting this by using terms such as my service provider, or by
including oneself with the service provider and referring collectively with us and
we (Butcher et al., 2001).
All above mentioned approaches could be culminated in figure 2. The outcomes
of these approaches can be effectively used in the customer segmentation by
marketers.
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Figure 2: Outcome of customer loyalty
Source: Rai and Srivastava, 2012, p. 65.
To sum up, the consumer brand loyalty plays a more imperative part in the
cutting edge worldwide marketing. To augment a benefit, the individuals attempt
diverse methodologies, among which, a loyalty is perceived by a lot of scholars
and companies. On the other hand, some may affirm that it is a test to
accomplish it. Above all, by discovering the right levels of loyalty and choosing
the proper approach can impact on the consumer loyalty Hence businesspeople
may better comprehend the buyer's repeat visit and purchase over time.
Consequently, by performing the above mentioned actions the enterprises can
build long-lasting and reliable relationship with the customer and can bring profit
to the budget.
2.3 Service brand theory
2.3.1 Concept and characteristics of services
The concept of services appears to be a more interesting topic for the
researchers more than two centuries (Lovelock and Wirtz, 2011). In the most
contemporary dictionaries service is explained as `an act of helpful activity; help;
aid; the action of helping or doing work for someone; the act of dealing with a
Customer
Loyalty
Behavioural
Outcomes
Repurchase
Intentions
Switching
Intentions
Exclusive Intentions
Attitudinal
Outcomes
Relative Attitude
Willingness to
Recommend
Altruism
Cognitive
Outcomes
Willingnes to pay
more
Exclusive
Consdieration
Identification
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customer in a shop, restaurant, or hotel by taking their order, showing or selling
them goods, etc.' (Dictionary, 2014; Cambridge University Press, 2014a; Oxford
University Press, 2014b). According to Zeithalm, Bitner and Gremler (2013, p.
3) services are `deeds, processes, and performances provided or coproduced
by one entity or person for another entity or person'. However, Lovelock and
Wirtz (2011, p. 37) describe the services as `economic activities offered by one
party to another. Often time-based, performances bring about desired results to
recipients, objects, or other assets for which purchasers have a responsibility'.
Table 3: Comparing goods and services
Goods
Services
Resulting Implications
Tangible
Intangible
Services cannot be inventoried.
Services cannot be easily patented.
Services cannot be readily displayed or communicated.
Pricing is difficult.
Standardized
Heterogeneous Service delivery and customer satisfaction depend on
employee and customer actions.
Service quality depends on many uncontrollable factors.
There is no sure knowledge that the service delivered
matches what was planned and promoted.
Production separate
from consumption
Simultaneous
production and
consumption
Customers participate in and affect the transaction.
Customers affect each other.
Employees affect the service outcome.
Decentralization may be essential.
Mass production is difficult.
Non-perishable
Perishable
It is difficult to synchronize supply and demand with
services.
Services cannot be returned or resold.
Source: Own illustration based on Parasuraman, Zeithaml and Berry, 1985, pp. 41-50
in Zeithaml, Bitner and Gremler, 2013, p. 20.
In fact, there is the unanimity in the differences between goods and services
among scholars (Lovelock and Gummesson, 2004; Zeithaml, Parasuraman and
Berry, 1985 cited in Zeithaml, Bitner and Gremler, 2013; Kotler, Bowen and
Makens, 2010) and it can easily be noticed in table 3. There are four distinct
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characteristics of services: intangibility, inseparability, heterogeneity and
perishability (see figure 3).
Intangibility services can be distinguished by their unique nature of being
intangible. Services, different than objects, are based on the performances or
the actions. In that mean they cannot be seen, felt, tasted or touched as it is
possible in tangible goods (Kotler, Bowen and Makens, 2010; Zeithaml, Bitner
and Gremler, 2013). The services provided by the hotels can be sensed after a
guest experiences it, even though he / she cannot feel, taste or touch it. The
acquired experiences are saved in the subconscious part of the brain as a
remembrance. For example, hotels in order to etch the experiences into the
memory offer trips in the vicinity areas to create the memorable guest
experiences which turn to be a good motivation to return back to that hotel.
Inseparability `simultaneous production and consumption' (Zeithaml, Bitner
and Gremler, 2013, pp. 21-22) as well as `participation of both the service
provider and the customer at the present time' (Kotler, Bowen and Makens,
2010, pp. 36-37) make the services to be inseparable. For instance, the quality
of food and employee professionalism should be thorough to provide an
unforgettable time for the customer, vice versa will lead to the customer
dissatisfaction. According to Kotler (2010), whether the customer should involve
in the realisation of service, then he / she is the part of product which is also
serviced inseparability. As an example, it is relevant to mention that the
restaurant administrators must be well educated to manage every type of
customers to fulfil their needs and farewell them in a satisfied mood.
Heterogeneity it is, in fact, obvious that services are not alike. The services
provider and the customer are the main dependents of service heterogeneity.
Neither all the enterprises provide the same services, nor the customers
demand in the same manner as they interact with services (Zeithaml, Bitner and
Gremler, 2013
)
. Service variability is the result of some factors. Firstly, the
quality issue of services spring while services are produced and consumed
synchronously. The distinct consumer demand makes the services providers to
face difficulties at the peak time of work. Other service heterogeneity appears
when miscommunication between the host and the guest present and diverse
guest expectations are hard to reckon. (Kotler, Bowen and Makens, 2010)
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Figure 3: Four services characteristics
Source: Kotler, Bowen and Makens, 2010, p. 35.
Perishability as a matter of fact services cannot be saved, stored, resold or
returned, so the consistency of services is under question and that is why
scholars approve that services are perishable (Kotler, Bowen and Makens,
2010; Zeithaml, Bitner and Gremler, 2013). A hotel with 120 rooms divisions
cannot sell 70 rooms and save another 50 rooms for a next day and sell 170
rooms all together. The income from those unused rooms vanished forever
(Kotler, Bowen and Makens, 2010).
2.3.2 Service brand theory and characteristics
In fact, in the consumption of services the customer involvement is greater than
in the product consumption, then in the case of branding services it is more
based on intangibility rather than a tangible physical good in the product
branding. Grönroos (2000b, p. 290 cited in Pekka, 2006, p. 4) has proposed
that `a service brand is created in dynamic brand relationships--whereby the
customer forms a differentiating image of the service on the basis various brand
contacts to which the customer is exposed'. The service is the one of the nine
elements of `atomic model' of the brand designed by de Chernatony and Riley
(1998). According Chen (2001 cited in Yi, Trigo and Shiming, 2012, pp. 28-29),
`service brand is the name or other mark symbol of service institution or
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