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Forerunners and outcomes of brand loyalty: A study of young consumers in Pakistan
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Accounting & Marketing

ISSN: 2168-9601

Open Access

Research - (2021) Volume 10, Issue 4

Forerunners and outcomes of brand loyalty: A study of young consumers in Pakistan

Aleem Raza*, Sumbal Butt Professor and Muhammad Asif Professor
*Correspondence: Aleem Raza, Professor, Uvas Business School, University of Veterinary and Animal Sciences, Lahore, Pakistan, Tel: +923044100722, Email:
Uvas Business School, University of Veterinary and Animal Sciences, Lahore, Pakistan

Abstract

The objective of this study was to propose and empirically examine a consolidative conceptual model which tests the effect of perceived quality, brand awareness, perceived value and brand uniqueness on brand loyalty and the effect of brand loyalty on positive WOM. The study adopted a quantitative methodology involving data collection through structured questionnaire from 410 young consumers of national brands by adopting convenience sampling technique. Structured Equation Modelling was used to analyse the data through AMOS 24. The empirical results support the predictions of this study. The findings revealed that perceived quality, brand awareness, perceived value and brand uniqueness have positive relationship with brand loyalty. Moreover, brand loyalty was positively related to the positive WOM. The current study makes its significant contribution to the field of brand management by investigating effect of four dimensions of brand equity on brand loyalty. In addition, the study provides new insights to literature and practice by investigating the effect of brand loyalty on positive WOM. The findings of this study will help brand managers and marketers to identify the appropriate and effective strategies to establish and improve the consumer brand loyalty.

Keywords

Perceived quality • Brand awareness • Perceived value • Brand u niqueness • Fashion brands • Brand loyalty • Positive WOM

Introduction

Due to globalization and open business environment in today’s world, the marketers are continuously trying to use all possible resources to convert the dreams of consumers into reality and to create brand loyalty among them. It would not be astonishing for the researchers and practitioners to perceive that how should brand loyalty be increased because not only this has to be understood, but also marketers and firms have to assess the effect brand loyalty on their style of continuous purchase and recommendation intention. Therefore, Marketers are eager in knowing the factors to create and increase the brand loyalty among the consumers for sustainable profitable growth. When an organization creates a strong brand it attracts customer desire and builds a protective wall against competition [1]. Branding is thus all about creating differences in outcomes arise from the ‘added value’ endowed on products and services. Brand equity is very important concept in business practice as well as in academic research because companies can gain competitive advantages through well-built brands [2-6]. Previous research contributes to a better understanding of brand equity measurement [6-11]. Brand equity increases the probability of brand choice leads to brand loyalty and encases the brand from measure of competitive threats [12].

A brand’s value is set by the degree of brand loyalty, as this involves a guarantee of future cash flows [13]. Brand loyalty is a key discussion when placing a value on a brand because loyalty converts into a benefit stream [14]. Brand loyalty is the hypothetical variable which is a construct that cannot be observed directly [15]. If consumers may have loyal, to buy the brand as a primary choice; and then, the firm may have a competitive advantage in the market [16]. Organizations recognize the value of having strong brands in their portfolio, as this helps build a loyal customer base and to smooth the task of differentiating products [17]. In past decade, organizations are expanding their interest in building and holding the brands. The brands become more valuable now a day; consumers have more information and more choices than ever [18]. If organizations want to maintain brand loyalty then they will offer best services to customers because business environment is highly competitive. Engage with your customer through social media can help inform customers about new discounts and special deals. In this way companies achieve more success. Positive perception and loyalty among customers increase the brand loyalty.

Nowadays, effective branding is a censorious success factor for all types of fashion brands and it can create equity, encourage consumer brand loyalty, and raise profitability [19]. Fashion has always been closely related to having a lifestyle. Since fashion is the industry that keep innovating and changing industry, especially for fashion in women sector [20]. In the fashion industry branding has become the dominant competitive approach for all successful businesses. Youngsters are very concerned about fashion adaption in today’s world. In addition to the increased number of clothing brands available to consumers, fashion retailers also have to face changes in consumers’ lifestyles [21]. The focal point on fashion clothing is significant because of both its economic value and significant social functions [22]. Chan et al. [23] also provided an example related to the fashion industry where individuals may buy the same brand as their peers to indicate their need for goods. If the brand loyalty for a company in fashion industry is low, they might face many affect to them [24].

In Context of Pakistan, there is a dearth of research on brand loyalty toward fashion clothing brands and the results of the marketing efforts of different brands are completely different from the rest of the world [25]. There are numerous researches explaining the factors affecting brand loyalty and recommendation intention in the developed countries [26]. However, the rapidly growing popularity of brands developing countries is increasing the need to investigate the brand loyalty toward fashion clothing brands and positive WOMin the context of developing economies. The objective of this study is to find out the effect of brand awareness, brand uniqueness, perceived quality and perceived value on brand loyalty towards fashion clothing brand. Further the study investigated the link between brand loyalty and positive WOM. Afterwards, concluding remarks and certain managerial implications are provided with some recommendations and limitations.

Literature Review

Consumer-Based Brand Equity

Brand equity is defined as the added value with which a given brand provides a product. Brand equity from an individual consumer’s perspective is referred to as consumer-based brand equity and is reflected by the expansion in attitude strength for a product using the brand [7]. Kevin [5] viewed consumer based brand equity as the differential effect of brand knowledge on consumer response to the marketing of the brand. Kevin [5] conceptualization centres on brand knowledge and involves two dimensions: brand awareness and brand image. Lasar et al. [27] viewed brand equity as “the enhancement in the perceived utility and desirability a brand name confers on a product”. Aaker [28] was defined as brand equity is a set of brand assets and liabilities linked to a brand name and symbol, which add to or subtract from the value provided by a product or service and also provides value to customers. Clow [29] stated that brand equity as “set of characteristics that make a brand unique in the marketplace”. Yoo and Donthu [30] treated consumer based brand equity as a three-dimensional variable, merging brand awareness and brand associations into one dimension. Netemeyer [8] indicated that brand equity should be measured by three basic dimensions including perceived quality, perceived value, uniqueness, and willingness to pay a price premium. Recently Buil, et al. [31] and Pappu et al. [32] presented empirical proof of the multidimensionality of consumer based brand equity, supporting Aaker [28] and Kevin [5]. Conceptualization of brand equity. In this study, we apply CBBE measures to fashion clothing brand. We focus on fashion brand CBBE from marketing perspective and include CBBE dimensions which represent consumer perceptions and reactions to fashion clothing brand. Considering the nature of the fashion industry and provide a description of the dimensions of fashion clothing brand CBBE in the following sections.

Perceived quality

Perceived quality is the consumer’s judgment about a product’s overall supremacy or dominance [33]. Bhuian [34] also consider perceived quality is a judgment on the consistency of product description or an assessment on included estimation of a product. Perceived quality is not the objective quality of the product but consumers’ subjective assessments which depend on their perceptions [33,35]. Perceived quality is a main dimension in brand equity models because it has a strategic effect on brand equity by diminishing the perceived chance. Perceived quality is found to be the primary ancestor of brand loyalty [36]. Nguyen [37] presented that there is a significant relationship between perceived quality and brand loyalty. Saleem [38] supported that perceived quality shown variation in the brand loyalty. Alhaddad [39] also revealed that perceived quality has positive effects on both brand image and brand loyalty. But more recent researchers like Su and chang [16] have presented the contrasting view that there is not a significant relationship between perceived quality and brand loyalty. Tong et al. [10] and Buil et al. [35] also indicating that having high quality alone is not a promise of a famous brand. Hence, this study hypothesizes that.

H1: Perceived quality have positive effect on consumer brand loyalty

Perceived value

Perceived value is defined as the customer’s overall evaluation of the utility of the brand based on perceptions of what is received and what is given relative to other brands. Perceived value includes the trade-off of “what I get” for “what I give [8,33]. Perceived value is at a higher level of abstraction than any attribute or benefit of a brand. Consumer’s perceived value includes consumer’s overall evaluation of the brand functional or symbolic attribute and effort made by the consumer Customers perceive performance, stability and immunity with the service, and customers includes time and money in the total cost experienced [40]. Updated looks and limited editions, along with the speed of their availability and inexpensive price, make this industry good looking to many young consumers [41]. Ashraf et al. [18] shown that perceived value has significant and optimistic power on brand loyalty. Ishaq [42] revealed that perceived value has positive and significant impression on brand loyalty. Su et al. [16] also supported that perceived value strongly affect consumer brand loyalty. So, owing to the above discussion, we can hypothesize that.

H2: Perceived value has a significant positive impact on consumer brand loyalty

Brand awareness

Brand awareness is defined as the ability of a potential purchaser to recognize or recall that a brand is a member of a certain product group. This construct is identified with the strength of a brand’s presence in consumers’ minds and is normally estimated through brand acknowledgment and review under various conditions [43]. Brand awareness impacts choices and can be a prior thought base in a product category. Brand awareness can assist consumers to recognize a brand from a product classification and settle on buy choice [1]. Kevin [5] conceptualized brand awareness includes both brand recall and brand recognition. When consumers selecting a product they think that a most famous brand is more dependable than a less known brand [44]. Globally, the remarkable development in the accessibility of different media and their coverage of fashion has contributed to the expansion in worldwide style awareness among young consumers [9]. The purchasers’ close about the brand through advertising in this way they get more detail about the product. Dumasi et al. [45] supported that there is an important association between brand awareness and brand loyalty. Su et al. [16] also revealed brand awareness positively and strongly affect consumer brand loyalty. Yoshida [46] pointed out that brand awareness has more affect to brand loyalty of Thai consumer for buying new brand. Therefore, this research proposes the following hypothesis is postulated:

H3: Brand awareness has a significant positive effect on consumer brand loyalty.

Brand uniqueness

Brand uniqueness is the degree to which customers feel the brand is not the same as competing brands, how apparent it is relative to competitors [8]. As such, brand uniqueness is observed a central consumer based brand equity facet [8]. Keller [47] states that purchasers’ brand perceptions are driven by their awareness and the requirement for uniqueness toward brand, which are managed from individual experience. Netemeyer [8] considered brand uniqueness offers diagnostic information by modifying the brand from other brands, provides a simplifying “heuristic” that positively impacts consumer brand preference and their willingness to pay a more expensive rate for a brand. Brand uniqueness is considered as the significant predictor of consumer brand loyalty by Su and Chang [16]. So, the next hypothesis can be proposed as:

H4: Brand uniqueness has a significant positive impact on consumer brand loyalty.

Brand loyalty and positive WOM

Brand loyalty can be defined as “the attachment that a customer has to a brand”. David [43] defined brand loyalty as “a core dimension of brand equity”. Current studies declared that brand loyalty is an outcome of brand equity and established that other brand equity dimensions affect brand loyalty [4,31]. Thus, it is suitable to view brand loyalty as the outcome of other brand equity dimensions. In general, consumers do not discuss about a brand negatively, until the consumers have come up against a situation that results in disappointment [48]. After having a positive and good experience with the brands, consumers become loyal to the brands and they are more likely to share their good experience to the other people in the society [49]. WOM communication is considered as most reliable and creditable. As suggested by Gounaris p10 the relationship), Consumer develop a positive attitude toward the brand as a consequence of the received value. There are few studies in the literature that have studied and reported a positive relationship between brand loyalty and WOM [26,49,50]. These studies suggest that recommendation of brand is the most expected behavioral result of brand loyalty. Hence,

H5. Brand loyalty is positively related to positive WOM.

Figure 1 shows the conceptual framework of this study. With regard to this research model, brand awareness, perceived quality, perceived value and brand uniqueness are considered as antecedents to brand loyalty, while positive WOM is defined as behavioral outcome of the consumer brand loyalty.

accounting-marketing-framework

Figure 1. Conceptual framework.

Methodology

The study was explanatory in nature. Quantitative method was adopted to collect the data by conducting a survey on young buyers who have purchased and used the products of brands. The survey instrument in form of questionnaire was designed in English. The survey instrument was consisting of six constructs: brand awareness, perceived quality, perceived value, brand uniqueness, brand loyalty and positive WOM. In the initial section of questionnaire, respondents were asked to provide general information about gender, education, age and monthly household income. In the second part, items of the six constructs were given and five point likert scale with the indicators ranging between ‘1= strongly agree’ to ‘5= strongly disagree’ was used. The convenience sampling technique was preferred as sampling method for conducting the survey.

The target population of this study was the young consumers who have passionate emotions and feelings regarding the fashion brand. In order to approach the target sample, a question was included in the structured questionnaire to recognize whether the participants purchase once in a month or frequently from the same brand. The brands used in the survey were the Pakistani brands that are well-known among young consumers. Before collecting the data from young buyers, the designed version of questionnaire was reviewed by three scholars and based on the feedbacks and suggestions of the scholars, certain modifications were made and a revised version of survey instrument was used to collect the data from respondents. The questionnaire was distributed among 500 respondents through email and by hand. The questionnaire was also uploaded on online data collection software, and the link of the questionnaire is sent to the respondents through social media tools like WhatsApp and Facebook. There were 90 consumers who did not fill the complete questionnaire or couldn’t include in data pool. Therefore only 410 responses were used for data analysis. The scale used to measure brand awareness and perceived quality was adopted from Buil et al. [35]. Perceived value was measured by using items obtained from Netemeyer [8]. To measure brand uniqueness scale was adopted from Netemeyer Consumer brand loyalty scale was based on Yoo and Donthu [30] positive WOM scale was adopted.

Data Analysis

The descriptive analysis reveals the demographic characteristics of the respondents as 40.5% male and 59.5% female. All of the respondents were young consumers where three-quarters of them 24% were 25-28 years old, 32% were 22-24 years old, and 44% were 18-21 years old.The Statistical Package for Social Science (SPSS) and Analysis of a Moment Structure (AMOS) were employed for data analysis.The reliability was checked for each construct, and value of Cronbach’s alpha was above 0.7 in case of each construct, which cutoff level as suggested by Hair et al. [51]. The composite reliability was also acceptable as it was above 0.7. Hence the overall reliability of each construct was achieved [51].

The factor loadings of the items were in between 0.80 to 0.91 and the value of average variance extracted range from 0.65 to 0.68. All values are given in the Table 1. The two-step analysis approach was used as suggested by Hair et al. [52]. Firstly, the measurement model was tested by conducting confirmatory factor analysis to check the reliability, convergent validity and discriminant validity. Secondly, the structural model was to test the relationship among the study variables. The model fit values of confirmatory factor analysis are GFI 0.863, AGFI 0.851, TLI 0.964, CFI 0.979 and RMSEA 0.054. All of these values show a good fit for the models, as the values were over the acceptance standard [53-55].

Table 1. Reliability and Validity Measures.

Constructs Items Factor loading Cronbach’s α CR AVE
  PQ 1 0.86      
  PQ 2 0.91      
Perceived Quality PQ 3 0.82 0.93 0.92 0.68
  PQ 4 0.87      
  PQ 5 0.84      
  PV 1 0.82      
Perceived value PV 2 0.86 0.91 0.93 0.68
  PV 3 0.89      
  PV 4 0.83      
  BA 1 0.83      
Brand Awareness BA 2 0.87 0.90 0.91 0.66
  BA 3 0.83      
  BA 4 0.88      
  BU 1 0.87      
Brand Uniqueness BU 2 0.87 0.91 0.91 0.67
  BU 3 0.84      
  BU 4 0.83      
  BL 1 0.83      
Brand Loyalty BL 2 0.83 0.88 0.88 0.66
  BL 3 0.80      
  BL 4 0.80      
  PWOM 0.89      
Positive WOM PWOM 0.89 0.89 0.88 0.65
  PWOM 0.80      

Results

The empirical results of this study, after examining the hypotheses through structural equation modelling indicate that perceived quality is the significant predictor of brand loyalty with estimate value of 0.444 at significance of less than 0.001. Perceived value was also found to be significantly associated with brand loyalty with an estimate of 0.512 at significance of less than 0.001. a strong relationship was found between brand awareness and brand loyalty with an estimate value of 0.459. Brand uniqueness was significantly associated with brand loyalty with an estimate value of 0.229. Moreover, brand loyalty was found to be the significant predictor of positive WOM with an estimate value of 0.218. The results are given in the Table 2.

Table 2. Path coefficients and hypotheses testing.

Hypothesis Statement Estimate Significance Results
H1 Perceived quality has positive effect on brand loyalty 0.444 *** Supported
H2 Perceived value has a significant positive impact on brand loyalty 0.512 *** Supported
H3 Brand awareness has a significant positive effect on brand loyalty 0.459 *** Supported
H4 Brand uniqueness has a significant positive impact on c brand loyalty 0.229 *** Supported
H5 Brand loyalty is positively related to positive WOM. 0.218 0.002 Supported

Conclusions and Discussion

This study examined the effects of perceived quality, perceived value, brand awareness, and brand uniqueness on brand loyalty among young consumers in Pakistan. Further, the study tested the effect of brand loyalty on positive WOM. Empirical results via multiple regressions confirmed that perceived quality, perceived value, brand awareness, and brand uniqueness jointly influence brand loyalty among young consumers in Pakistan. More specifically, results indicated that the relationship between perceived quality and brand loyalty is positive and significant which supports the results of Nguyen [37]. Perceived quality is a dominant factor in young consumer’s purchase decision because consumers are more interested in fashionable styles and quality. Further investigation of the study discovered that brand loyalty is also affected by perceived value as it shown in the Table 2. Ishaq [42] and Ashraf [18] also prove the positive relationship between perceived value and brand loyalty. The choice of fashion clothing item is more than satisfactory, so the perceived value of fashion clothing contributes to consumers’ loyalty toward fashion clothing brand.

This study also postulates that brand awareness significantly influences brand loyalty among young consumers. The results showed that brand awareness mostly affects brand loyalty in the sense that young customers’ decision to buy a brand depends on their awareness of the product. They can clearly recognize the particular brand in comparison to competing brands and know how it looks, so enhanced brand recognition and brand recall will positively affect consumer loyalty toward a brand. The findings are consistent from previous studies [45,46] in which it was established that brand awareness among consumers positively affects brand loyalty. Likewise, brand uniqueness also turned out to be a significant predictor of brand loyalty as presented in Table 2. The results are consistent with Su and Chang [16] who indicated that brand uniqueness has a positive effect on brand loyalty. Therefore, fashion brands, which is the low-cost clothing collections based on current, is perceived trendy and unique, and therefore attracts more and more consumers.

Current study establishes the factors that strongly influence brand loyalty among consumers which is not much covered in the literature within the Pakistan context. In this study, we investigated the relationships between young consumers’ attitudes towards fashion clothing brand and their brand loyalty. Perceived quality, perceived value, brand awareness and brand uniqueness are the presenting dimensions of brand equity to building consumer brand loyalty. More specifically, this study shows that, all brand equity dimensions have the same impact in originating consumer loyalty toward a brand. The study will also provide the information about how brand loyalty is increased through perceived quality, perceived value, brand awareness and brand uniqueness. If the brand loyalty is achieved it will automatically lead to the higher success for the organization.

Moreover, the study found that brand loyalty is positively related to positive WOM. The findings are consistent with the findings of Bıçakcıoğlu [26] in which it was established that brand loyalty is positively associated with positive WOM. The findings of this study that consumer loyalty toward the brand enhances the consumer intention to repurchase the brand products and brand loyalty is a source of positive WOM, which indicates that more consumers are loyal, the more they deliver positive WOM to their family, close relatives, friends and colleagues. The results indicate that the loyal consumers have the tendency to deliver positive suggestions and recommendations about the brand to others. In other words the brand loyalty intends to increase the level of positive words to the others with an increase in loyalty.

Implications

The results obtained in this study point out the interesting several implications for managers to build consumer brand loyalty and to increase positive WOM. Firstly it is important for managers to understand the differences of the effects of brand equity and implement marketing mix strategies accordingly. This study offers managerial contributions for fashion marketers that focus to explore more about brand perception. Current study also offers significant insight into the fashion industry, providing tools to understand the role of brand loyalty in the fashion industry. The findings obtained in this article have important managerial implications illustrating the whole situation in which brand loyalty is built by brand awareness, perceived value, perceived quality, and brand uniqueness. Secondly, this study reveals a clear understanding of the dimensions that develop positive brand loyalty in order to generate positive outcomes. This study contributes to the growing research on the dimensions of brand equity and helps managers to understand their competitors to increase the degree of loyalty. Dimensions of brand equity are important to the extent perceived by managers and its effectiveness creates new opportunities in the market. Third, this study is beneficial to brand managers as it allows them to understand consumers’ perception about the brand. Moreover, managers can develop strategies oriented to brand loyalty with an effective customer relationship management to improve the relationship with consumers. Loyal consumers are more likely to spread positive words about the brand and positive recommendations to others. This study fills a gap of the unexplored area of literature surrounding dimensions of brand equity and outcomes of brand loyalty from Pakistan.

Limitations

This study has several limitations. First, research is conducted among 200 consumers from two cities of Pakistan i.e. Lahore and Islamabad and is limited to the fashion clothing brand which infers the sample used is very narrow to generalize the whole population in Pakistan. Future research is counted desirable to increase the sample size to improve the generalizability issue. Second, the study is carried out on a convenience sample of young consumers, whereas the probability sampling technique ensures more precision. Third, the findings of this research depend largely on the honesty of the respondents to provide answers to the questionnaire that covered perceived quality, brand loyalty, brand awareness, perceived value and brand uniqueness. Future research should consider more dimensions of brand equity. Finally, this study selected national brands which have the more stores around Lahore. Further research would be recommended to compare the results with an international brand.

References

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