JOURNAL OF STRATEGIC MARKETING 9 111128 (2001)

Measuring and managing brand loyalty

SIMON KNOX

Institute for Advanced Research on Marketing, Cran eld School of Management, Cran eld University, Cran eld, Bedford, MK43 0AL, UK

DAVID WALKER

Synectics Europe, 10 Wyndham Place, London W1H 1AS, UK

There has been much written about the role of brand loyalty as a primary measure of effective brands marketing and a partial measure of brand equity. To date, however, progress in providing a practical measure of the construct has been very limited. In this empirical study of grocery brands, such a measure was developed in which both brand commitment and brand support were found to be necessary and suf cient conditions for loyalty to exist. Based on this measure, four consumer purchasing styles were identi ed and characterized as loyals, habituals, variety seekers and switchers. The strategic implications of segmenting grocery markets on this basis is discussed in both the context of the marketing of brands and managing brand equity. KEYWORDS: Brand loyalty; brand commitment and support; repeat purchase rate; consumer purchasing styles

INTRODUCTION The concept of brand loyalty has had a long and inconsequent history. The very rst mention of the idea was attributed to Copeland (1923) and, since then, over 200 de nitions have appeared in the literature (Jacoby and Chestnut, 1978). This plethora of de nitions provides a clue as to how important this concept is in marketing theory. The generation of loyal customers has been a primary objective of marketers for decades. The level of brand loyalty has also been used as a measure of the success of marketing strategy and also as a partial measure of brand equity. In fact, Aaker (1991) stated that the brand loyalty of the customer base is often the core of the brands equity (p. 5). Despite all the interest in the general concept and the universal belief in the bene ts of loyalty, progress in measuring and clearly de ning it has been very limited. This is particularly true for fast-moving consumer goods (FMCGs) where the arguments become further entwined with the debate about how involving their purchases actually are for consumers. Many authors (e.g. DeBruicker, 1979; Kassarjian and Kassarjian, 1979) believe that the process of purchasing in these markets is treated with almost total apathy by many consumers. If this is the case then consumer devotion to a particular brand will be fragile and short-lived so the use of brand loyalty as a partial measure of brand equity must be questioned. McWilliam (1992) went so
Journal of Strategic Marketing ISSN 0965254X print/ISSN 14464488 online 2001 Taylor & Francis Ltd http://www.tandf.co.uk/journals DOI: 10.1080/09652540010029962

112

KNOX AND WALKER

far as to question whether chief executive of cers fully understand the nature of brand equity in these markets: One has to ask if these chief executives are investing their time and money wisely and on a correct understanding of the role of brands in the lives of their customers (p. 131). This paper reviews the progress made in understanding brand loyalty, from philosophical considerations to de nitional issues and the practical, managerial consequences of engendering loyal behaviour. It then provides a new framework for understanding brand loyalty which is based on a robust de nition and derived from this analysis of panel data from grocery markets. Using this new framework, involved purchasing is identi ed and separated from routinized purchasing. The key bene t derived from this framework and other empirical observations on brand loyalty is providing a practical tool for market segmentation and for marketers in order for them to understand the performance of their brands better. It also provides a more robust model for understanding the dynamics of brand equity in FMCG markets. The paper concludes by considering the implications of this empirical work for brand marketers and managers interested in trying to estimate brand equity. THE SIGNIFICANCE OF REPEAT PURCHASING IN PERSPECTIVE With the exception of a very few product categories, a major objective of marketing strategy is to facilitate the process of consumers repurchasing a brand through preference. The reason why repeat purchasing is important to marketing management is simple: retaining customers often requires less marketing resources than recruiting new ones (see, for example, Reichheld and Sasser, 1990; Reichheld, 1996; Birgelen et al., 1997) and, thus, is economically desirable. Not surprisingly, the vagaries of repeat purchase behaviour have been the subject of extensive research efforts throughout the history of the study of consumer behaviour. However, much of the work has suffered from de nitional inconsistencies and inadequate operationalization (Muncy and Hunt, 1984). There are three salient factors which contribute to these dif culties. First, understanding repeat purchase behaviour requires behavioural data. Collecting such data is costly in FMCG markets since it generally requires a panel. The substitute of selfreport survey data is often unreliable since it is dependent on recall of purchasing events from memory (see Wind and Lerner, 1979). Second, the terms repeat purchase, brand commitment and brand loyalty have all been used interchangeably in the literature so empirical ndings become dependent upon particular and often imprecise reference points. Finally, since there are two opposing schools of thought as to the nature of repeat purchasing, assumptions about dependent variables will be very different. These differing perspectives are addressed next in the following sections since they fundamentally in uence any research design and measurement instruments. STOCHASTIC AND DETERMINISTIC PERSPECTIVES OF REPEAT PURCHASE The stochastic model of consumer purchasing anticipates the repeat purchase patterns of consumers from basic information about penetration and average purchase frequency. Consumers are considered to purchase brands in a random fashion which is predictable from known probability distributions. Thus, the levels of repeat purchase to be expected can be predicted from the basic variables. Models of this nature were extensively developed by Ehrenberg (1988). The philosophical assumptions underlying such models are that the levels of repeat purchase are

MEASURING AND MANAGING BRAND LOYALTY

113

stable for a given brand penetration and purchase frequency and are not easily altered by any readily identi able causative variable. In defence of this seemingly unlikely scenario, Bass (1974) stated that even if behaviour is caused but the bulk of the explanation lies in a multitude of variables which occur with unpredictable frequency, then, in practice, the process is stochastic (p. 7). Application of this view of repeat purchase is limited to modelling static market situations and does not provide any (indeed, may even deny the existence of) causative explanation. Both the theory underlying the models and their application was discussed extensively by Ehrenberg (1988) and, more pragmatically, by East (1997). In contrast to this is the deterministic view of repeat purchase behaviour in which a limited number of causes are considered to in uence purchasing behaviour, that is a few independent variables account for and can even predict the level of repeat purchasing for a given brand and set of consumers. However, causal research carried out by the deterministic school has met with only partial success. Jacoby and Chestnut (1978) suggested that the reason for this could be due to the fact that repeat purchase behaviour is in fact multicausal (pp. 45). However, the same authors went on to note that determinism has a place in identifying models of behaviour within a limited domain of repeat purchasing, speci cally in the area of brand loyalty. REPEAT PURCHASING AND BRAND LOYALTY Repeat purchase behaviour is an axiomatic term which simply refers to the extent to which consumers repurchase the same brand after experiencing the brand. Since it is a purely behavioural construct, it is simply measured as the number of times a given brand is repurchased by a consumer in any given period of time (see Ehrenberg, 1988). In contrast, the term brand loyalty is a complex concept that may require both psychological (commitment) and behavioural measurements. The de nition and measurement of brand loyalty is discussed next. In their extensive study of the brand loyalty literature, Jacoby and Chestnut (1978) reviewed over 200 studies in an attempt to determine the nature and characteristics of brand loyalty. The rst point that they made was to underline the general lack of a coherent conceptual de nition: the concept of brand loyalty has been de ned by most researchers empirically instead of theoretically, a few researchers have stated that the empirical de nition is the theoretical de nition (Woodside and Clokey (1975) in Jacoby and Chestnut (1978), p. 70). This lack of clarity has led to a great deal of dif culty in interpreting many of the brand loyalty studies and, since there is no common theoretical de nition, mutually exclusive research studies have generally been produced. Jacoby and Chestnut (1978) also provided a classi cation of the various approaches to measuring brand loyalty. There are three broad groups. (1) Those that stress behaviour. Examples are exclusive purchase, i.e. to be brand loyal the consumer must consistently purchase a single brand (Copeland, 1923; Churchill, 1942; Brown, 1952), two-thirds criterion, i.e. out of a set of three brands offered four or more purchases of the same brand must occur in a 6 week period for brand loyalty to exist (Charlton and Ehrenberg, 1976) and three-in-a-row criterion, i.e. a consumer is brand loyal when three or more purchases in a row occur (Tucker, 1964; McConnell, 1968). (2) Those that stress psychological commitment. Examples are brand preference, i.e. a consumer is de ned as loyal to the brand they name in response to the question which

114

KNOX AND WALKER

brand do you prefer? and brand name loyalty, i.e. loyalty is assessed on the basis of responses to the statement I make my purchase selection according to my favourite brand name, regardless of price. (3) Composite indices. Examples are brand insistence, which combines the behavioural index of exclusive purchase with an out-of-stock decision that another brand would only be purchased in the case of an emergency (Copeland, 1923) and Li, i.e. the ratio of the proportion of purchases devoted to brand L to the proportion of purchases devoted to brand i (Day, 1969). More recently, Dick and Basu (1994) identi ed a conceptual framework for brand loyalty, which is also a composite model combining relative attitude towards the brand and repeat patronage of the brand as the central, independent variables of the loyalty relationship. The number and diversity of these approaches makes the task of identifying an appropriate measure formidable. Jacoby and Chestnut (1978) also provided a review of the comparative reliability, validity and sensitivity of the various measures. Unfortunately, this too proved rather inconclusive. However, in drawing together their discussion on the theory and measurement of brand loyalty, these authors identi ed a conceptual de nition (which was rst proposed by Jacoby and Olson (1970) for which they cited extensive theoretical substantiation. The conceptual de nition (which will be adopted in this research) was expressed as a set of six necessary and collectively suf cient conditions. Thus, brand loyalty was seen as (1) the biased (i.e. non random), (2) behavioural response (i.e. purchase), (3) expressed over time, (4) by some decision-making unit (5) with respect to one or more alternative brands out of a set of such brands, and (6) is a function of psychological (decision making, evaluative) processes (Jacoby and Chestnut, 1978, p. 80). It will be clear why this de nition is appealing from the Introduction: it provides a method of distinguishing between apparent devotion to a brand (or portfolio of brands) and devotion which is founded on a longer term, more deep-rooted psychological evaluation. It is also distinct from the Dick and Basu (1994) framework which offered a narrower view of loyalty de ned by the attitudinal and behavioural responses consumers have towards a particular brand rather than a set of brands in their purchasing portfolio. All the evidence suggests that, in FMCG markets, where involvement is relatively low, consumers purchase on a portfolio basis as the norm rather than display single brand loyalty (Ehrenberg, 1988; Uncles et al., 1995; Kennedy and Ehrenberg, 2000). Consequently, the authors were keen to adopt the Jacoby and Olson (1970) de nition since it was thought likely to provide the richest data sets of the underlying patterns of repeat purchasing and switching motivations within product categories. Operationalizing this composite de nition of brand loyalty still proved to be enormously challenging. However, since this is the only fully identi ed de nition that acknowledges the possibility of multibrand loyalty, even if it does not produce the perfect measuring instrument, it did provide a sound conceptual framework for this research. DEVELOPING MEASURES OF BRAND LOYALTY: THE BACKGROUND TO THIS RESEARCH The authors original interest in brand loyalty stemmed from work they were conducting into the relationship between consumer involvement and behaviour in FMCG markets (Knox and

MEASURING AND MANAGING BRAND LOYALTY

115

Walker, 1995). (Consumer involvement is the degree of personal relevance which a stimulus or situation is perceived to help achieve consequences and values of importance to the consumer (Peter et al., 1999).) Initially, the authors were interested in determining whether or not there was a signi cant relationship between a consumers level of involvement with grocery brands and their repeat purchase behaviour (see Assael, 1995). In developing this research protocol, a model (Figure 1) was identi ed that included a measure of the sources of involvement, involvement itself, commitment and brand support (an index of brand portfolio size and purchase frequency) as the nal dependent variable. Effectively, brand commitment, i.e. the consumers psychological attachment to a brand (Beatty and Kahle, 1988), was treated as an antecedent to brand support on the grounds that any variance explained in brand support by brand commitment could legitimately be termed brand loyalty (under the terms of Jacoby and Olsons (1970) de nition outlined above). The involvement part of the model (Figure 1) stems from empirical work carried out by Mittal and Lee (1989) and Laurent and Kapferer (1988). Using LISREL VII to identify the model through causal path analysis and panel data collected across three product categories (see the data collection section), it was possible to establish that there is a signi cant relationship between brand commitment and repeat purchasing (brand support), albeit a very weak one, explaining only approximately 16% of the variance. It was at this point that it was decided to review the de nition of brand loyalty shown above and develop a way of classifying brand buying behaviour which is better able to retain information about consumers than the simple linear relationship speci ed in the original model. Before discussing this approach, the paper now turns to reviewing the data collection procedures and providing details of the measurements that were made. DATA COLLECTION In the exploration of progress made in the study of brand loyalty, it was concluded that a major shortcoming of many research endeavours had been a failure to collect behavioural data. Self-reported measures of behaviour through surveys are notoriously unreliable because of poor recall by consumers of what products had been purchased over long periods of time (see Wind

FIGURE 1. Schematic of involvement/support model (involvement sources and forms follow Mittal and Lee (1989)).

116

KNOX AND WALKER

and Lerner, 1979). Therefore, in order to collect accurate data on actual purchasing behaviour, a consumer panel was recruited and operated for 16 weeks. A survey was administered to each respondent at the beginning of the panel recording period in order to measure involvement and commitment states and elicit demographic information. Subsequently, participants were asked to record their purchases across three product categories on diary sheets which were supplied every two weeks. The product elds investigated were paper kitchen towels, breakfast cereals and national newspapers. These products were selected in order to re ect the full range of levels of consumer involvement to be found in grocery brands, from low (kitchen towels) to high (national newspapers), with breakfast cereals as a medium involving category. It was shown that there is a signi cant difference in the levels of involvement between each of these product types (see the third subsection of Appendix 1 for mean scores). SAMPLE Since the primary interest here was in developing theory about the relationship between attitudes and behaviours towards brands, a sample that was representative of either the country or of usage levels of speci c brands was not speci cally needed. The objective was to recruit a sample that re ected a cross-section of shoppers that spanned the main demographic variables. A clustered, random-sampling technique was employed and the new town of Milton Keynes was targeted for recruitment. Out of the 113 Milton Keynes areas, eight were selected for recruitment and three to four streets in each area were used. The aim was to recruit 200 respondents onto the panel and record their purchases in at least two of the three product categories in order to produce an effective sample size of between 400 and 600. FIELDWORK All obliging householders who had bought and used at least two of the product categories during the previous month were recruited onto the panel. Upon recruitment, each member was given a starter pack which consisted of the rst questionnaire, rst diary sheet and detailed instructions about being a panel member. Details of how to complete the questionnaire and diary sheets were explained to the respondents at the recruitment visit. Two hundred and ninety-eight of the 540 households that were contacted successfully agreed to participate in the study. Two hundred and twenty-two actually returned their rst questionnaire and 207 remained at the end of the recording period. From this sample, 191 provided usable responses from either two or three product categories, giving an effective sample size of 463 throughout the recording period. Responses from the rst two diary sheets were discarded (in order to allow behaviour to stabilize) which left data from a further eight diary sheets or 16 weeks of full panel data. Information about current brand usage, stated preferred brands and background information on shopping behaviour and demographic information was elicited from the self-completion questionnaire, which was administered at the beginning of the panel recording period. Fourteen items for assessing involvement and two further items speci cally about brand commitment were also included in the questionnaire. One of the two commitment scales followed Traylor (1981) and was a simple ve-point scale, while the other was a modi cation of the scale used by Cunningham (1967), which was used because it expresses the psychological construct of commitment set in a behavioural context. These involvement and brand commitment measures are included in the rst subsection of Appendix 1, together with a reliability test of the involvement

MEASURING AND MANAGING BRAND LOYALTY

117

scales (second subsection of Appendix 1). Further details of the validity measures and testretest reliability scores can be found in Knox et al. (1999). In the 16 week period following the initial survey, participants were required to record information about their purchases of all brands from the three product categories in diary sheets on the day of purchase. At the end of the two week diary period, respondents who had changed brands within a category were requested to provide reasons for their switching behaviour. Due to the large choice of brands within each of the categories, a free response format was used so that the diary sheets could be kept as simple as possible. Data from the diary sheets was recorded onto a PC database as the panel progressed. The database was also used to track diary sheet returns and signal the need for additional calls to be made on respondents who failed to make a return. ANALYSIS Given the de nition of brand loyalty identi ed above, it was necessary to develop a measure of brand buying behaviour that re ected the degree to which purchasing within a product category was devoted to a limited set of brands from the greater number that were available in the market place. Such an index was derived using data on respondents purchasing throughout the full 16 week recording period, which is expressed mathematically as Brand support index =
brand 1 brand n

5 (total purchases of product) 6

(purchase of brand n)2
2

log (total purchases)

The main part of the equation is derived from the classical HirschmanHer ndahl index (Hirschman, 1987). The log total purchases multiplier was introduced in order to comply with the rst point of the conceptual de nition of loyalty outlined above, i.e. the requirement for a non-random response. Its effect is to reduce the weight of the index for respondents who only made a small number of purchases in the category over the 16 week recording period. (This modi cation was only employed in order to account for the limited recording period (16 weeks) and would be unnecessary if the recording period was longer.) Based on aggregate data across all product categories, it has already been noted that the linear relationship between brand commitment and the index of brand support used here was relatively weak. The amount of variance explained in each individual product category varied, being greatest for newspapers and almost negligible for kitchen towels. Intuitively, this aggregate nding is surprising if consumers express commitment to brands, it would be expected that they would purchase them (indeed, achieving positive discrimination to brands through commitment is the rationale behind most branding) (McWilliam, 1992; Keller, 1993, 2000). However, this result suggests that there are reasons other than commitment that lead to the repeat purchasing of a limited number of brands. In other words, brand purchasing behaviours in some instances may not be a direct function of psychological (decision-making, evaluative) processes, particularly with low-involvement purchases. If brand commitment and support for each respondent is plotted in matrix format, it can be seen why the linear relationship is so weak (see Figure 2). Although there are some respondents who fall close to the straight line between low commitment/low support and high commitment/ high support, there are a signi cant number who lie outside this area. Using the aggregate data across all three product categories, the matrix approach was used to classify groupings of cases using a simple K-means clustering procedure. Four clusters were speci ed in order to identify

118

KNOX AND WALKER

FIGURE 2. Commitmentsupport matrix.

patterns outside the straight line of the linear relationship. The clustering procedure was carried out using SPSS quick-cluster. Conveniently, this provided one cluster in each of the four corners of the commitmentsupport matrix. The characteristics of each cluster and number of respondents in each are outlined below. (1) (2) (3) (4) Cluster 1, high commitment/high support, contained 72 cases, i.e. loyals. Cluster 2, low commitment/high support, contained 34 cases, i.e. habituals. Cluster 3, high commitment/low support, contained 180 cases, i.e. variety seekers. Cluster 4, low commitment/low support, contained 177 cases, i.e. switchers.

The switching motivations recorded by individual respondents were then cross-tabulated for each of the four clusters. A summary of the results of this analysis is shown in Table 1. In addition, we have also reported the mean levels of product involvement and brand risk for each of these clusters (Table 2). From the sample and recording period that was available, the number of switches that took place during the panel recording period was limited. However, there were substantial differences between the recorded motivations for each of the clusters which provided enough information for naming the clusters and beginning to describe the behavioural biases of respondents within each. Interpretation of the behavioural motivations for each cluster follows next. INTERPRETATION The proposed cluster names (which were drawn from these data and their logical position on the dimensions) are designated in Figure 2. There were some very interesting differences in the saliency of reasons for switching offered by consumers in each of these clusters (highlighted in Table 1). For both the loyal and habitual classi cations, the out-of-stock situation was mentioned most often as a reason for switching. Peter et al. (1999) also observed the same phenomenon for loyals; they may switch away from their normal brand when out of stock.

TABLE 1.

Reported switching motivations by cluster (n = 463)

Cluster name Habituals % of switches 5.6 36.1 2.8 55.6 100.0 6 9 4 2 27 48 12.5 18.8 8.3 4.2 56.3 100.0 2 6 1 16 30 2 2 51 26 50 6 7 199 1.0 3.0 0.5 8.0 15.1 1.0 1.0 25.6 13.1 25.1 3.0 3.5 100.0 Number of switches % of switches % of switches Number of switches Variety seekers Switchers Number of switches 2 4 30 2 10 8 7 28 7 39 6 19 162 % of switches 1.2 2.5 18.5 1.2 6.2 4.9 4.3 17.3 4.3 24.1 3.7 11.7 100.0

Loyals

MEASURING AND MANAGING BRAND LOYALTY

Switching motivations

Number of switches

Packaging New product trial Price Store location Product quality/features Vouchers Free gift Variety First choice out of stock Childrens in uence Television advertisement Changed store Total reported switches

2 13 1 20 36

119

120

KNOX AND WALKER

TABLE 2. Mean levels of brand risk and product involvement by cluster (n = 463) Cluster name Loyals Brand risk Product involvement 3.70* 4.14* Habituals 2.47* 3.24* Variety seekers 3.70* 3.63* Switchers 2.05* 2.46

* Signi cant difference at p = 0.05 with all items recorded on seven-point agree/disagree scale.

Habitual buying behaviour was characterized by Kotler et al. (1996) as passive information processing and brand familiarity rather than brand conviction, which can easily be broken if availability is reduced and routine purchasing patterns are disrupted. The only other major switching motivation for the loyal classi cation was product quality or features. In a separate study of grocery store loyalty, McGoldrick and Andre (1997) found that loyal shoppers cited products of better quality as a secondary cause for switching, which tends to support the ndings here. There were many different reasons for switching for those classed as switchers, the most salient being childrens in uence, price and variety. Bloemer and Kasper (1995) identi ed purchasers with low brand commitment as being immediately captured by another brand that offers a better deal, coupon, or enhanced point of purchase visibility. Reichheld (1996) described switching customers as gliding into your arms for a minimal price discount who then dance away with someone else at the slightest enticement. Coupons and price discounts nd these customers like heat-seeking missiles! (p. 82). In the event of a brand being repeat purchased by a switcher, it is not out of loyalty but indifference; category switchers do not perceive a signi cant difference in quality between brands that are within their purchasing portfolio. Apart from seeking variety itself, two other important reasons for switching were found for variety seekers childrens in uence and product-related features. Menon and Kahn (1995) argued that variety seekers are motivated by a desire to maintain an optimal level of stimulation which they may attempt to satisfy by choosing different or novel brands. They suggested that variety-seeking behaviour can occur even when preferences for brands remain constant as choice is contextual and in uenced by usage, point of purchase displays and feelings of monotony and boredom. Kotler et al. (1996) also made the point that variety-seeking behaviour can occur in situations where there are perceived brand differences so that, when switching occurs, it may not be because of dissatisfactions. There is an underlying consistency in the interpretation of the data here that suggests that the clusters do indeed have a meaningful interpretation and this mapping approach provides a more useful method of interpreting the relationship between commitment and support than the linear analysis. The authors conclude that both brand commitment and brand support were found to be necessary and suf cient conditions for loyalty to exist. In their paper on brand loyalty and consumer satisfaction, Bloemer and Kasper (1995) also supported the view that brand commitment is a necessary condition for brand loyalty to occur. They too made a clear distinction between repeat purchasing behaviour and brand loyalty, adopting the terms true loyalty (selective brand purchasing based on commitment) and spurious loyalty (selective brand purchasing without commitment). These respective de nitions proposed by Bloemer and Kasper (1995) broadly correspond to the behaviours manifested by loyals and habituals in this paper.

MEASURING AND MANAGING BRAND LOYALTY

121

Referring to an earlier analysis (Knox et al., 1999) it was determined that the only antecedents of brand commitment that were signi cant among these grocery brands were product involvement and brand risk (in the model here these antecedents operated through the intervening variable of brand involvement). Product involvement refers to the extent to which the product class is motivating for the consumer (Mitchell, 1998), whilst brand risk refers to the risks associated with making a poor brand choice (i.e. dissonance post-purchase). These constructs were measured with a total of four items in the initial self-completion questionnaire (Appendix 1). The mean levels of these two key antecedents are reported for each cluster in Table 2. In summary the table suggests the following. (1) (2) (3) (4) Loyals: high product involvement and medium risk. Habituals: low product involvement and low risk. Variety seekers: medium product involvement and medium risk. Switchers: low product involvement and low risk.

This implies that the risks associated with moving out of a brand and into an alternative are key to developing brands, the customers of which are loyal in any enduring sense. In other words, loyals use repeat purchasing of a brand as a means of reducing risk (Assael, 1995). Product involvement is also important in this respect, but it is more dif cult to see how this construct could be manipulated to the advantage of a speci c brand. Laaksonen (1999) provided an example of how this may be possible in detergents marketing. He cited the case of consumers who have a high sense of involvement with the product category, which is normally regarded as a low-involvement purchase, due to environmental (or health) reasons. The marketing of an appropriate detergent brand that promotes green values (or non-enzyme health bene ts) is likely to lift sales of the subcategory in general and the brand in particular. Referring back to Table 2, this is most likely to occur among loyals and variety seekers. These results clearly provide clues for marketers interested in ensuring consumer preferences and for developing appropriate advertising for grocery brands. The implications of this are developed further below. IMPLICATIONS FOR STRATEGIC MARKETERS Like many academic researchers in the past, this research was designed with a view to pursuing the determinant causes of brand loyalty. This proved to be a rather optimistic goal. Consumer behaviour is a complex phenomenon and people behave differently when purchasing different products. A limited relationship between commitment and repeat purchasing, which may provide some clues as to how to increase loyalty, was found in earlier work. However weak the relationship between involvement and loyalty might be, it is still an important one to understand because these loyal customers account for a disproportionately large volume of sales. For example, this research has shown that the 47% of newspaper purchasers in the loyal cluster account for 60% of the sales. However, the contribution of the exploratory work reported here is not derived from the causal analysis but from the identi cation of differing responses along the dimensions of brand commitment and purchasing behaviour. Four classi cations of consumer behaviour which marketers can begin to approach in different ways have been described here. For instance, it has been seen that the most likely cause of a change in brand purchasing in the habitual classi cation is due to the out-of-stock situation. This is consistent with the instinctive

122

KNOX AND WALKER

assertions about extinguishing habitual responses (i.e. the removal of habitual choice) (see Assael, 1995). It will be clear to the marketer that, for this segment of consumers, maximizing distribution will be critical to the success of marketing strategy. Aaker (1991) stated that A set of habitual buyers has considerable value because they represent a value stream that can go forward for a long time (p. 72). This is only true if steps are taken to guard against the loss of such customers. This study implies that the key to achieving this is very different to building brand loyalty per se and rests with removing the opportunity of switching out of the brand by closing distribution gaps. The assertion here is that marketers of grocery brands need to understand that high repeat purchase rates do not necessarily re ect what this paper calls high levels of brand loyalty. Therefore, using national television advertising or other brand building techniques should not be the primary focus of maintaining this type of brand equity unless (as is often the case) it is needed to justify distribution gains with the retail trade. In contrast, high distribution may play a less signi cant role in retaining variety seekers. The results here imply that sampling an alternative product may not lead to anything more than temporary defection. A more important cue for variety seekers is the provision of choice within the umbrella brand. Hence, the role of the brand is to provide assurances about quality while still allowing the consumer choice factor which companies such as Kelloggs certainly seem to have capitalized on. It appears that more conscious mental processing is still important for the loyal segment and modi cations in the brand which trigger this will be more relevant to them. The levels of product involvement are relatively high for both loyal and variety-seeking behaviours, which implies that rational advertising messages may be appropriate, even in grocery markets. Advertising certainly has a role to play for the loyals in increasing the risks associated with moving away from the brand. The risks in question appeared to be entirely associated with product performance for the grocery products studied here. Other authors have reported on FMCG products where emotional bene ts are important. For example, Beatty and Kahle (1988) reported that connections between consumers life experiences and their use of soft drinks are important in establishing commitment to speci c brands. This will be no surprise to those familiar with the often-quoted case of Coca-Colas attempt to introduce a new variant of Coke in the USA. Finally, it should be recognized that, within the loyal classi cation where purchasing portfolios are smaller, distribution again seems to play an important role. Out-of-stock occurrences can cause even loyals to switch brands. In an early study of stock-out situations, Schary and Christopher (1979) observed that more brand loyal consumers chose to switch brands rather than to delay purchase until their next visit. Whilst the other factors this paper has described are also important, marketers should not underestimate the impact of Loyals experiencing an alternative brand. The switchers category is perhaps the most dif cult to target; price, variety, store choice and childrens in uence all seem to play a role. A combination of various tactical promotions may be the best suggestion to make. However, given the nature of this consumer group, these would have to be viable on the basis of a single sale or provide some additional advantage to customers in the other clusters where a longer run return could be expected. The position in the matrix of the majority of consumers at either product category or brand level provides a valuable contribution to the understanding of consumer behaviour in each market. For example, in this research it was found that newspaper purchasers were overrepresented in the loyal cluster, breakfast cereals in the variety seekers cluster and kitchen towels in the habitual cluster. It may also be possible to target the remaining customers in the other groups separately. The success of the latter approach is, of course, dependent on nding

MEASURING AND MANAGING BRAND LOYALTY

123

secondary variables (eg. geodemographic or life-style variables) which are related to the clusters and can be used for targeting marketing effort, e.g. advertising and database marketing. IMPLICATIONS FOR BRAND EQUITY The role that brand loyalty plays in measuring brand equity is considered to vary considerably. Farquhar (1989) referred only to favourable brand attitudes, whereas other authors (e.g. Aaker, 1991; Kapferer, 1992; Uncles and Laurent, 1997) have attached a much more important role to the behaviour. It is, of course, only ever a partial measure; a brand can have equity for many reasons other than its ability to achieve high repeat purchase rates, for example because of a brands ability to achieve a price premium over competing products (Yasin, 1995). However, brand loyalty certainly seems to be a key variable for management interested in the value of brand equity when measured from a consumer perspective rather than for the balance sheet (Keller, 2000). The research ndings here must therefore raise questions in the minds of those interested in the value of their brands. For example, which is the more valuable: a brand with a high level of habitual buyers or one with a high core of loyal customers? Aaker (1991) considered the committed, loyal buyers to be the most highly valued; this probably stems from the desire to treat direct marketing investments (e.g. advertising) as assets rather than costs which is fundamental in the management of brand equity (see Kapferer, 1992). However, if one applies the principles outlined above, there is no reason why habitual consumers should not be just as valued and long-lived as the loyals. In this case, the marketing investments are just as valuable but operate through the ability of the brand management to gain and hold distribution. This is a subtle but signi cant difference since the ability to distinguish the reasons for brand strength that this approach offers must surely provide the would-be brand acquirer with improved information over traditional measures of brand strength such as share and sales volumes. In his discussion of brand equity and relationship management, Ambler (1995) recognized the need for taking a more holistic view of the value of the brand which is grounded within a marketing rather than nance framework. The approach used here may provide the roots of just such a framework within FMCG markets. LIMITATIONS, RESEARCH DIRECTIONS AND CONCLUDING REMARKS This paper has suggested that it is more useful to examine brand loyalty in the context of brand commitment and brand support, with both as necessary and suf cient conditions for loyalty to exist. This approach allows marketing management to target marketing activity according to the behavioural style of their customers rather than simply focus on increasing loyalty. This paper has shown, through empirical evidence, that the four segments de ned in the cluster analysis have different switching behaviours and has suggested alternative strategies for reaching each of these. Clearly, there is signi cant work still to be done in clarifying the impact of these ndings at the individual brand level and in the measurement of brand equity. The sample resources available in the study reported here were limited in three respects. First, only data in three product categories were collected, second, the sample was not large enough to isolate the speci c differences between brands within the product elds and, third, the study did not distinguish between the decision makers, buyers and users within a family. In particular, this papers explication of how consumers purchase brands does not furnish any real understanding of how

124

KNOX AND WALKER

they use them which, in turn, may in uence purchasing behaviours outside the domain of rational problem solving. Further work also needs to be done in order to determine whether it is consumers who behave differently per se (i.e. whether there is a tendency for loyal consumers from one category to be loyal in other categories) or whether behaviour is solely dependent on the product category. The current work provides most guidance to those managing mature brands, which is a signi cant grouping, considering that over half the current top 50 brands in the UK were launched in the 1950s (Brady and Davis, 1993). However, the matrix can also be used for analysing purchasing behaviours during the brand-building process. Research derived from the matrix would be a long-term longitudinal gains/loss analysis for identifying whether brand marketers can effectively in uence the position of consumers in their approach to purchasing (i.e. whether customers can be moved from one cluster to another) or whether they must accept that purchasing style is enduring and should target their marketing efforts accordingly. Finally, marketers might also like to consider using the mapping approach outlined here in order to help focus their marketing research efforts by purchaser type. The matrix used here has been developed as a means of guiding decision making on where certain strategic analysis techniques should be directed and applied. For example, for product categories where the consumers fall mainly into the loyal classi cation, cohort analysis can identify how to target marketing effort towards the most important age groups. This type of analysis would be less appropriate to the switcher classi cation because these consumers never develop loyalty and are unlikely to carry their allegiances to a brand throughout their lives. By analysing distribution pro les, it is possible to help make improvements in targeting distribution within a portfolio of brands in order to optimize sales in product categories where many of the consumers are habitual purchasers. Similarly, the authors are developing models for revealing the responses of consumers to promotions, which is particularly relevant to consumers in the switcher and variety seekers categories. These are only three examples of research techniques which could be applied to the different segments. Equally, research into other marketing mix variables could be developed using the loyalty framework outlined in this paper. ACKNOWLEDGEMENTS The authors gratefully acknowledge the nancial assistance of the Isle of Man Government Department of Education and the Institute for Advanced Research in Marketing, Cran eld School of Management. We would also like to acknowledge the contribution of the two blind reviewers for their constructive feedback on an earlier version of this paper. REFERENCES
Aaker, D.A. (1991) Managing Brand Equity: Capitalising on the Value of a Brand Name. New York: The Free Press. Ambler, T. (1995) Brand equity as a relational concept. In Proceedings of the second International Colloquium in Relationship Marketing. Cran eld School of Management, Cran eld, November, pp. 1320. Assael, H. (1995) Consumer Behaviour and Marketing Action. Cincinnati: South Western College Publishing. Bass, F.M. (1974) The theory of stochastic preference and brand switching. Journal of Marketing Research, 11, 120. Beatty, S.E. and Kahle, L.R. (1988) Alternative hierarchies of the attitude behaviour relationship: the impact of brand commitment and habit. Journal of the Academy of Marketing Science 16(2), 110.

MEASURING AND MANAGING BRAND LOYALTY

125

Birgelen, M., Wetzels, M. and De Ruyter, K. (1997). Commitment in service relationships: an empirical test of its antecedents and consequences. In EMAC Conference Proceedings, University of Warwick, Warwick, 2023 May, pp. 125571. Bloemer, J.M.M. and Kasper, H.D.P. (1995) The complex relationship between consumer satisfaction and loyalty. Journal of Economic Psychology 16, 31129. Brady, J. and Davis, I. (1993) Marketings mid life crisis. McKinsey Quarterly 2, 1728. Brown, J.D. (1952) Consumer Loyalty for Private Food Brands. Muncie, IN: Bureau of Business Research, Report No. 3, Ball State University. Charlton, P. and Ehrenberg, A.S.C. (1976) An experiment in brand choice. Journal of Marketing Research 13, 15260. Churchill, H. (1942) How to measure brand loyalty, Advertising and Selling 35(24), 1116. Copeland, M.T. (1923) Relation of consumers buying habits to marketing method. Harvard Business Review 1, 2829. Cunningham, S.M. (1967) Perceived risk and brand loyalty. In D. Cox (ed.) Risk Taking and Information Handling in Consumer Behaviour. Boston: Harvard University Press, pp. 1328. Day, G.S. (1969) A two dimensional concept of brand loyalty. Journal of Advertising Research 9, 2935. DeBruicker, F.S. (1979) An appraisal of low-involvement consumer information processing. In J.C. Maloney and B. Silverman (eds) Attitude Research Plays for High Stakes. Chicago: American Marketing Association, pp. 11233. Dick, A.S. and Basu, K. (1994) Customer loyalty: towards an integrated conceptual framework. Journal of the Academy of Marketing Science 22(2), 99113. East, R. (1997) Consumer Behaviour. Hemel Hempstead: Prentice Hall. Ehrenberg, A.S.C. (1988) Repeat Buying Facts, Theory and Applications. London: Aske. Farquhar, P.H. (1989) Managing brand equity. Marketing Research 3 September, 712. Hirschman, E.C. (1987) Marketing research: to serve what purpose? In R.W. Belk and K. Clarke (eds) Marketing Theory, Proceedings of the AMA Winter Educators Conference. Chicago: American Marketing Association, pp. 2048. Jacoby, J. and Chestnut, R.W. (1978). Brand Loyalty. New York: Wiley, pp. 6790. Jacoby, J. and Olson, J.C. (1970) An attitudinal model of brand loyalty: conceptual underpinnings and instrumentation research. Purdue Papers in Consumer Psychology 159, 1420. Kapferer, J.-N. (1992) Strategic Brand Management: New Approaches to Creating & Evaluating Brand Equity. London: Kogan Page. Kassarjian, H.H. and Kassarjian, W. (1979) Attitudes under low commitment conditions. In J.C. Maloney and B. Silverman (eds) Attitude Research Plays for High Stakes. Chicago: American Marketing Association, pp. 315. Keller, K.L. (1993) Conceptualizing, measuring, and managing customer-based brand equity. Journal of Marketing 57, 122. Keller, K.L. (2000) The brand report card. Harvard Business Review 1 JanuaryFebruary, 14757. Kennedy, R. and Ehrenberg, A.S.C. (2000) Competitive brands user-pro les hardly differ. In S. Broadbent (ed) Proceedings of the MRS Conference 2000. London: The Market Research Society, pp. 4251. Knox, S.D. and Walker, D. (1995) Empirical Developments in the Measurement of Involvement, Brand Loyalty and their Structural Relationships in Grocery Markets. Cran eld: Cran eld School of Management Working Paper. Knox, S.D., Walker, D. and Marshall, C. (1999) Measuring consumer involvement with grocery brands: model validation and scale-reliability test procedures. In G.J. Hooley and M.K. Hussey (eds) Quantitative Methods in Marketing. London: Academic Press, pp. 26380. Kotler, P., Armstrong, G., Saunders, J. and Wong, V. (1996) Principles of Marketing: The European Edition. Hemel Hempstead: Prentice Hall Europe. Laaksonen, P. (1999) Involvement. In P. Earl and S. Kemp (eds) The Elgar Companion to Consumer Research and Economic Psychology. Cheltenham: Edward Elgar, pp. 3416.

126

KNOX AND WALKER

Laurent, G. and Kapferer, J.-N. (1985) Measuring consumer involvement pro les. Journal of Marketing Research 22, 4153. McConnell, J.D. (1968) The development of brand loyalty: an experimental study. Journal of Marketing Research 5, 1319. McGoldrick, P.J. and Andre, E. (1997) Consumer misbehaviour: promiscuity or loyalty in grocery shopping. Journal of Retailing and Consumer Services 4(2), 7381. McWilliam, G. (1992) Consumers involvement in brands and product categories. In M.J. Baker (ed) Perspectives on Marketing Management, Vol. 2. Chichester: John Wiley & Sons, p. 131. Menon, S. and Kahn, B.E. (1995) The impact of context on variety seeking in product choices. Journal of Consumer Research, 22, 28595. Mitchell, A. (1998) Loyal yes, staying, no. Management Today 5 May, 1045. Mittal, B. and Lee, M.S. (1989) Separating brand-choice involvement from product involvement via consumer involvement pro les. Advances in Consumer Research 15, 439. Muncy, J.A. and Hunt, S.D. (1984) Consumer involvement: de nitional issues and research directions. In A. Mitchell Advances in Consumer Research, Vol. XI. Ann Arbor, MI: Association for Consumer Research, pp. 1936. Peter, J.P., Olson, J.C. and Grunert, K.G. (1999) Consumer Behaviour and Marketing Strategy, European edn. Maidenhead: McGraw-Hill. Reichheld, F.F. (1996) The Loyalty Effect. Boston: Harvard Business School Press. Reichheld, F.F. and Sasser, W.E. (1990) Zero defections: quality comes to services. Harvard Business Review 5 SeptemberOctober, 10511. Schary, P.B. and Christopher, M. (1979). The anatomy of a stock-out. Journal of Retailing 55(2), 5970. Traylor, M.B. (1981) Product involvement and brand commitment. Journal of Advertising Research 21, 516. Tucker, W.T. (1964) The development of brand loyalty. Journal of Marketing Research 1, 325. Uncles, M. and Laurent, G. (1997) Editorial. International Journal of Research in Marketing 14(5), 399404. Uncles, M., Ehrenberg, A.S.C. and Hammond, K. (1995) Patterns of buyer behavior: regularities, models and extensions. Marketing Science 14(3), 6718. Wind, Y. and Lerner, D. (1979) On the measurement of purchase data: surveys vs. purchase diaries. Journal of Marketing Research 16, 3947. Woodside, A.G. and Clokey, J.D. (1975) A general model of brand switching behaviour. In E. Mazze (ed.) Combined Proceedings. Chicago: American Marketing Association, pp. 17580. Yasin, J. (1995) The effects of advertising on fast moving consumer goods markets. International Journal of Advertising 14(2), pp. 13347.

BIOGRAPHIES Simon Knox is a professor of brand marketing at the Cran eld School of Management and is a consultant to a number of multinational companies, including McDonalds, BT, DiverseyLever and the Ocean Group. Prior to joining Cran eld, Simon worked for Unilever in a number of senior marketing roles in both detergents and foods. He publishes extensively on brand equity issues and customer purchasing styles and is the co-author of Competing on Value: Bridging the Gap between Brand and Customer Value, which was published by Financial Times Pitman Publishing in the UK and USA. Currently, he is leading research into customer relationship management on behalf of Computer Sciences Corporation. David Walker is a rst class honours graduate and has a PhD in consumer behaviour from Cran eld School of Management. He began his career at The Planning Business where he quickly progressed to senior consultant helping companies such as United Distillers, Pedigree and McCann Erikson with brand planning, modelling and new product development initiatives. Prior to joining Synectics he headed the brand planning group at Coca-Cola Great Britain

MEASURING AND MANAGING BRAND LOYALTY

127

where he was responsible for developing future focused brand strategies and identifying the opportunities needed to grow some of the worlds most successful brands further. During his time at Coca-Cola he was instrumental in implementing signi cant changes in the way planning operated which resulted in greater creativity and improved integration of consumer insights within the organization. APPENDIX 1: MEASURING INVOLVEMENT AND BRAND COMMITMENT

The measurement device

(1) Product involvement I have a strong interest in . . . . . (2) Brand decision involvement I would choose my brand of . . . . . very carefully. (3) Product sign (3.1) Using . . . . . helps me express my personality. (3.2) Knowing whether or not someone uses . . . . . tells a lot about that person. (4) Product hedonic (4.1) I would give myself great pleasure by purchasing . . . . . (4.2) To buy . . . . . would be like giving myself a present or treat. (5) Product utility Using . . . . . would be bene cial. (6) Brand sign You can tell a lot about a person from the brand of . . . . . s/he buys. (7) Brand hedonic (7.1) I believe differing brands of . . . . . would give different amounts of pleasure. (7.2) All brands of . . . . . would not be equally enjoyable. (7.3) No matter what brand of . . . . . you buy, you get the same pleasure. (8) Brand risk (8.1) When you buy . . . . ., it is not a big deal if you buy the wrong brand by mistake. (8.2) It is very annoying to buy a . . . . . which is not right. (8.3) A bad buy of . . . . . could bring you trouble. All 14 items used seven-point strongly agree/disagree scales. (9) When buying the products, how committed are you to buying your favourite brands, rather than an alternative brand? (please circle the number on the scale which best re ects your opinion): I am . . . . . | 5 highly committed | 4 | 3 | 2 | 1 | not at all committed

128

KNOX AND WALKER

. . . . . to buying my favourite brand(s) of . . . paper kitchen towel, . . . breakfast cereal, . . . national newspaper. (10) If you could not get your favourite brand(s) of . . . . . paper kitchen towel, etc., . . . . . at the store you had gone to for them, would you: Please tick one of the options Happily buy a different brand Reluctantly buy a different brand Not buy the product until the next time you shopped Try a different shop Keep trying different shops until you got the brand you wanted
TABLE A1. The reliability test (involvement) Measurement item Product involvement Brand decision involvement Product utility Product sign Brand sign Product hedonic Brand hedonic Brand risk TABLE A2. The mean scores (involvement) Product category means Kitchen towels Product involvement Brand decision involvement Brand hedonic Brand risk Brand sign Product hedonic Product sign Product utility
* Signi cant difference at p = 0.05 Source: Knox et al. (1999).

` ` ` ` `

1 2 3 4 5

Reliability measures Cronbachs a coef cient 0.94 0.94 0.89 0.87 0.87 0.84 0.72 0.72

Cereals 3.73* 2.63 3.01 3.75 4.87* 5.48 5.37* 2.79*

Newspapers 3.01 2.43 2.80 3.55 2.97 4.61 3.66 3.29

4.39* 4.02* 4.55* 4.85* 5.17 5.86* 5.34 2.35*