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Brand loyalty, long a central construct in marketing, is a measure of the attachment that a customer has to a brand. It reflects how likely a customer will be to switch to another brand, especially when that brand makes a change, either in price or in product features. As brand loyalty increases, the vulnerability of the customer base to competitive action is reduced. It is one indicator of brand equity which is demonstrably linked to future profits, since brand loyalty directly translates into future sales. You can download brilliant presentation slides on marketing and brand management here. There are several levels of loyalty. The bottom loyalty level is the non-loyal buyer who is completely indifferent to the brand. Each brand is perceived to be adequate and the brand name plays little role in the purchase decision. The second level includes buyers who are satisfied with the product or at least not dissatisfied. Basically, there is no dimension of dissatisfaction that is sufficient to stimulate a change especially if that change involves effort. These buyers might be termed habitual buyers. Such segments can be vulnerable to competitors that can create a visible benefit to switching. However, they can be difficult to reach since there is no reason for them to be on the lookout for alternatives. The third level consists of those who are also satisfied and, in addition, have switching costs costs in time, money, or performance risk associated with switching. To attract these 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 might be called switching-cost loyal.
You can download excellent powerpoint slides on Marketing Strategy and Marketing Management HERE. On the fourth level we find those that truly like the brand. Their preference may be based upon an association such as a symbol, a set of use experiences, or a high perceived quality. Segments at this fourth level might be termed friends of the brand because there is an emotional/ feeling attachment. The top level are committed customers. They have a pride of discovering and/or being users of a brand. The brand is very important to them either functionally or as an expression of who they are. Their confidence is such that they will recommend the brand to others. The ultimate committed customer is the Harley Davidson rider who wears the Harley symbol as a tattoo, the Macintosh user who attends shows and will spend considerable effort to insure that an acquaintance does not buy IBM and forego the pleasure of the user-friendly Macintosh, or the Beetle owner of the 1960s who flaunted the funkiness of the car.
Source of Reference: You can download powerpoint slide on brand loyalty and marketing management here.
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