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Brand Loyalty: Emotional Devotion or Rational Behavior A Study on

Mobile Telephones from Eskisehir Turkey

Dr. N. Figen Ersoy, Anadolu University, Eskisehir, Turkey

Dr. Nuri alk, Anadolu University, Eskisehir, Turkey

ABSTRACT

Purpose The purpose of this paper is to determine the factors that lead to brand loyalty. These factors have not yetbeen clearly defined because so many situational and transient agents play roles in its development. We ask questionsabout who, when, why, for how long, for what types of products, and under what conditions brand loyalty occurs in orderto suggest some identifiable determinants. We use the mobile telephone (cell phone) as a test product for the developmentof brand loyalty.

Methodology

a. Data collection: 1200 persons over 18 years of age who were selected on a stratified sample basis took thesurvey, and 1059 responses are eligible to be analyzed. The questionnaire consisted of 50 questions: five on thedemographic factors of age, gender, occupation, educational level and personal monthly income; seven on name of the

brand used, term of cell phone usage, term of same brand usage, price paid for the cell phone, amount of time used daily,main purpose of cell phone use, and what guided the decision to buy; and 38 questions regarding the users practice andthe evaluation of cell phones, using a five-point Likert-type scale.

b. Theoretical framework: Each of the 50 questions represents a variable to be analyzed. The degree to whichfactors influence the participants cell-phone appraisal was hypothesized to reveal significant differences between, on onehand, demographic factors and, on the other, brands, usage rates, time of usage and purpose of usage.

c. Analysis of data: Factor analysis was applied to the 38 scaled variables. Five common factors appeared:preference, involvement rate-commitment, satisfaction, performance and allegiance-switching. This analysis producedpromising results, since almost all variables stand under appropriate factors to which they are assumed to belong.Indicators such as the KMO test, a measure of sampling adequacy, produced the high score of 0.984; similarly CronbachsAlpha, an analysis of scale reliability, was 0.955, which is also a high score. Non-parametric statistical tests such as Chi-square analysis were also applied to determine the mutual relationships of variables when some interfering variables areadded to these mutual relationships to determine whether the direction or magnitude of mutual relationships is altered.

e. Findings: Significant differences found between different consumer demographics with respect to cell phoneusage rate, term of usage and the price paid for cell phones. Further analysis indicated close relationships between brandloyalty elements as involvement, performance, satisfaction, preference and switching.

INTRODUCTION

The concept of loyalty has long been debated among marketing professionals, but a solid definition has remainedelusive. This may be because loyalty is measured on two dimensions: behavioral and attitudinal. The behavioral dimensionexplains brand loyalty by means of actual purchases that occur in a given period, while the attitudinal dimension definesloyalty in terms of stated preferences, commitments or purchase intention (Rundle-Thiere and Mackay, p. 532). It is oftendifficult to understand the real determinants of brand loyalty because of the wide range of products and services that mayengender it. Cellular phones first appeared in Turkey in the 1990s as novelty items, but their use spread quickly thereafter.This study aims seeks the primary determinants of attitude (emotion) and behavior, their impacts on consumer brand

selection, and how individuals are categorized based on their attitude toward their own brands.

LITERATURE REVIEW AND PRIOR RESEARCH

Brand Loyalty Concept

Brand loyalty refers to the consumers repeatedly purchasing a specific product brand over other brands (Lin, Wu,Wang, 2000). The concept of brand loyalty has strategic importance in terms of a firms ability to obtain sustainablecompetitive advantage and growth. Brand-loyal consumers are more profitable and the costs of marketing to them arelower than customers who are not brand-loyal. In fact, it has been suggested that the cost of recruiting a new customer isfive times greater than he cost of retaining an existing customer (Barsky, 1994; Reicheld and Sasser, 1990, from Wood,2004) because: Loyalty reduces customer acquisition costs. Positive word of mouth from loyal customers saves on marketing costs to get new customers. Loyal customers demand elasticity is lower, based on the degree or type of loyalty. Brand-loyal customers increase the chances a brand extension will succeed and lower the risk of new product failure.

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Loyalty rates are connected to market share.According to Jacopy and Kyner, brand loyalty provides some understanding of the causative factors underlying the

development of brand loyalty(Tarper, 1974) Tarper (1974) defined brand loyalty as being based on certain conditions:that is, brand loyalty for a particular product or service must be a biased (non-random) behavioral response (purchase)expressed over time by some decision-making unit with respect to one or more alternative brands out of a set of suchbrands and a function of a psychological (decision-making, evaluative) process.

Gounaris and Stathakopoulos (2004) contended that the concept of brand loyalty must be related to

Repeat purchase Preferences Commitment Retention AllegianceThese factors are called as thebrand loyalty measures

Brand Loyalty Models:

(Thiele, Mackay, 2001)

According to Gounaris and Stathakopoulos (2004), there are three brand loyalty models that explain consumer purchasing

behavior: The behavioral approach: According to this view, brand loyalty is revealed in terms of repeat purchases. Dirichlets

model is one of the most prominent of these.

The attitudinal approach: According to this perspective, brand loyalty consists of a strong internal disposition towardsa brand, leading to repeat purchases. As such, the attitudinal approach conceives of brand loyalty as being based onstated preferences, commitment or purchase intentions.

The reasoned action approach: Ha proposed that the theory of reasoned action could be used to explain brand loyalty.According to the reasoned action paradigm, based on the theory of reasoned action introduced by Fishbein, brandloyalty is dependent on normative influences.

While all of these models are based on repeat purchases, each goes about determining the types of loyalty that aconsumer will show toward a brand in a different way. In criticizing the behavioral model, Gounaris and Stathakopoulos

(2004) pointed out that a consumer who is unfavorable to the purchase of a certain brand may still purchase the brand[and then stop] when the consumer is no longer forced to keep purchasing the brand. In Gounaris and Stathakopoulosview, only an increase in attitudinal brand loyalty should lead to a true increase in behavioral brand loyalty.

Brand Loyalty Types

Figure 1 shows four types of brand loyalty (Gounaris, Stathakopoulos (2004):

No loyalty: Consumers do not purchase the brand or have any information on or experiences with the brand. At thesame time, there are no social influences to get them to try or buy the brand (e.g., reference group and opinionleaders).

Covetous loyalty: There is no purchase but, emotional attachments are very high. The individual exhibits a veryhigh level of relative attachment to the brand as well as a strong positive predisposition toward it. This type ofloyalty derives from the individuals perception of the brand personality such that the brand is related to the

individuals own self-perception and personality.

Inertia loyalty: The brand is purchased repeatedly by the consumer, but there is no emotional attachment or anysocial influences. Because they lack any alternative brand or product, consumers keep buying the brand. Theconsumers purchasing behavior is characterized primarily by habitual attachment, at least in part because of brand-switching costs (Lin, Wu & Wang, 2000).

Premium loyalty: An individual exhibits a high degree of relative attachment to the brand, high instances of repeatpurchases, and high levels of influence by social pressure. This type of loyalty, sometimes called action loyalty,characterizes the greatest degree of consumer attachment to the brand.

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Resource: Gounaris and Stathakopoulos,(2004) Antecedents and consequences of brand loyalty: An empirical study,

Journal of Brand Management;; 11, 4

Brand Loyalty Behavior:

According to Wood (2004), early studies and research on brand loyalty failed to find any demographic correlates,but demographics failed to discriminate between buyers of different brands within a category. Other studies have identifieda relationship between demographics like age and degree of brand loyalty (Jacoby and Chesnut, 1978; Day, 1969; Engel,1968; Cunnigham, 1956; Guest, 1964; Frank, 1967; Carman, 1969; Newman and Werbel, 1973;, Lau and Lee, 1999).

Many theories explain how consumers make decisions about purchasing a brand, and these models usually addresssome causes or factors that affect the degree or type of brand loyalty, including satisfaction (Morraga, Parraga, Gonzales,2008), usage rate, usage cause, trust (Lau and Lee, 1999), social pressure, emotional pressure, habitual behavior, brandknowledge (Keller, 2003; Aggarwal and Law, 2005), market structure (Lin, Wu and Wang, 2000), the relationshipbetween company image and brand reputation (Lau and Lee, 1999),similarity between consumers self-concept and brandpersonality, brand experiences (Lau and Lee, 1999) and others. The causes of brand switching behavior have also been

examined in some studies (Lee, Lee and Feick, 2001; Hsu and Chang, 2003).

RESEARCH MODEL AND HYPOTHESES

This field research was conducted in May 2008 in Eskisehir, Turkey, a city with 600,000 inhabitants. 1200 individualswho use cellphones were selected on a random basis using the Stratified Sampling Method, of which 1059 are foundeligible to be included in the research project. Ninety-eight senior students who were taking a course in marketingresearch served as pollsters in exchange for extra credit in the course. The respondents were required to answer 50questions, each representing a separate variable of either an independent, a dependent or a moderating nature. Thirty-eight questions (variables) that reflected consumers attitudes toward cell phones were measured on a five-point Likert-type scale ranging from 1= strongly disagree to 5= strongly agree. 12 questions were nominal, ordinal, ratio and intervalscale-type questions. The last five questions reflected the demographic characteristics of cell phone users. All attitudequestions but three approached the issue from the positive side, and two stood as control questions. However, no

respondents fell into this trap, which increased scale reliability. The variables used in the analyses and their explanationsare as follows:

Table 1. Variables and Their Explanations

Variables Explanation

CELLPHONAME Name of the brand used.TERMOFUSAGE Term of usage (cell phone usage)SAMEBRAND Term of usage (using the same brand)PRICE The price paid for the cell phone ($)FREQUENCY Daily time spent using cell phone (min.)PURPOSE Main purpose of cell phone usePURCHDECISION "By what means you decided to purchase this brand"

HIGHPEFORM "This brand renders higher performance than the other brands"NOLETDOWN "I trusted this brand when I bought it because I knew it would never let me down"OFFER "This brand offers me the product I need"HIGHQUALITY "This brand has a reputation for high quality"

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BESTINCATEG "This brand is qualified as the best in its category"SWITCH "I can switch to another brand if I get a better offer from other brands"PREDICTPER "I can always predict (anticipate) the performance of this brand"PROBSOLVING "This brand helps me to solve the problems related to this product"PEOPLARND "The people around me told me that this brand is reliable"TASKFULFLM "This brand fulfills its task better than other brands"PROPERDECI "I think I made a proper decision in selecting this nrand"

REPUTATION "This brand has a reputation for being reliable"TRUST "I trust this brand"CHANGBLE "The performance of this brand is quite variable; therefore, I am not sure about its

performance next time I buy it"KEEPSRCHING "If this brand were not available when I intended to buy it, I would have searched for it

until I found it"HANDINESS "This brand is more handy than the other brands"COMMITMENT "I feel like a member of this brand gamily"OPINILEADER "I often praise this brand to my friends"LIKING "I like this brand"DENIAL "I do not believe it if someone tells me that this brand is unreliable"EXPERIENCE "Using this brand provides a good experience"STABILITY "This brand always keeps its quality at a high level"

FAME "This brand is famous for performing well"MEETNEEDS "This brand meet my needs better than the other brands"RECOMMEND "I can recomennd this brand to everybody"CONFIDENCE "The performance of this brand is as I expected and I count on this brand"ENJOYMENT "I really enjoy this brand"ANTICIPATION "I knew what I expected from this brand when I bought it"COMPARISON "Very few of other brands are better than my brand"FAVORITE "This brand is always my favorite brand"REPEATPRCHSE "I'll keep on buying this brand"EVALUATE "This brand evaluates me as a product-oriented customer"SATISFACTION "Purchasing this brand satisfies me"ASSISTANCE "This brand helps me to be satisfied with the product"DEFENSE "I defend this brand if somebody makes negative comments about it"

MAXIMUMVAL "This brand guides me to get the maximum value from it"CONSISTQUALITY "This brand provides consistent quality"NEGCOMMENT "Some negative comments are made about this brand"AGE (ratio scale) 18-25 26-40 41-62 62+GENDER(nominal scale) female maleOCCUPATION(nominal scale)

wage or salary earner businessman self-employed professional ormanager retired housewife

EDUCATION(ordinal) Elementary High School College or universityINCOME (ratioscale)

0-600 USD/month 600-1200 USD/month 1201-2400 USD/month2401-4800 USD/month 4801+ USD

Research hypotheses are as follows:

H1: There are significant differences between user demographics and terms of cell phone usage.H1a: Older people belong to the late majority or laggard group in adopting cell phones.H1b: Females cell phone usage history is dramatically shorter than that of males.H1c: Businessmen, managers and self-employed persons have used cell phones for a longer time than those in the other

occupation groups.H1d: More educated persons began using cell phones before less educated persons.H1e: High income correlates with earlier usage of cell phones

H2: There are significant differences between user demographics and the term of using the same brand (brand loyalty froma temporal point of view).H2a: Younger people are more loyal.H2b: GenderH2c: OccupationH2d: Education LevelH2e: Those with higher income have more sustained loyalty.

H3: People pay a higher price for their telephone in anticipation of higher performance. (Perceived quality)

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H2a: High price leads to a prediction of high performance.H3b: High price leads to the claim that it is the best brand in its categoryH3c: High price leads to trust in the brand.H3d: High price leads to the product neededH3e: High price leads to a relatively higher performance.H3f: High price leads to a reputation of high quality.

H4: Average daily time spent with cell phones shows significant differences between people who have regular jobs and donot have much idle time and those who have ample time.4a: WorkersH4b: Retired personsH4c: HousewivesH4d: Students

H5: The main purpose of cell phone usage differs significantly across users demographics.H5a: Sending messages and internet usage is more common among those in the younger generation.H5b: Females differ from males in terms of the main purpose of cell phone use.H5c: Students send more messages and use more internet connections than those in other occupations.H5d: The higher a persons education, the lower the voice calling rate.H5e: Cheaper means of communication (i.e., sending messages) is practiced more widely by low-income groups.

H6: Word-to-mouth information (negative comments) leads to brand switching.

H7: Long-term usage of the same brand leads to high involvement. (Price paid is a moderating variable here.) H7a: Long-term usage leads a person to identify himself/herself with the brand.H7b: Long-term usage leads users to become opinion-leaders to their friends.H7c: Long-term usage leads to pure (strong) loyalty.H7d: Long-term usage leads to the opinion that the brand fulfills its task perfectly.H7e: Long-term usage leads the user to defend the brand against negative comments.H7f: Long-term usage leads to the feeling of maintaining a good experience.

H8: Different brands have different levels of satisfaction for cell phone users.(Higher market share in terms of usage is correlated with higher satisfaction obtained.)

H9: Self-evaluation and relying on past experience in deciding to buy a cell phone induces more satisfaction than do othermeans of making a decision to buy.

H10: Repeat purchase is positively related to the price paid for the cellphone.

H11: High involvement with the brand triggers repeat purchases.

H12: Repeat purchase intention is significantly different among the brands.

ANALYSIS AND RESULTS

The SPSS 15 package program is used in this survey for bivariate and multivariate analyses. All relationships are

tested at

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PEOPLARND .574 RECOMMEND .486LIKING .571 Component 5HANDINESS .541 Brand SwitchingSTABILITY .541 NEGCOMMENT

-.767**ENJOYMENT .536 SWITCH -616**CONFIDENCE .507 DENIAL .422

REPEATPRCHSE .498

* Rotated Factor Scores ** Control question is asked inversely and yields negative result

Scale Reliability () : Component 4: Performance .865Component 1: Preference: .958 Component 5: Brand Switching:. NAComponent 2 Brand Involvement. .897Component 3: Satisfaction: .800 (.923)***

Overall Reliability: .961 Sample Adequacy (KMO test) : .984

*** When the inverse question is excluded

The hypothesis tests yielded the following conclusions (Chi Square Tests):

H1 is totally rejected, since no clear reasonable evidence is found between the term of cell phone usage anddemographic factors. Therefore, it could be said that all demographic groups began using cell phones indifferentlyH2 is partially accepted. The term brand loyalty is restricted to long-term usage, and other determinants areneglected. People younger than 25 years of age stick to the same brand more than people over age 62 do (36% to 20%,respectively). There is no clear evidence about differences in usage by gender at the extreme (very high usage andvery low usage), but a clear distinction is observed at 7-18 months of usage, where 27% of males and 21% of femalesbegan usage. A significant difference is found in income, as the usage for more than 60 months is 34.5 % for thehighest income group and only 13.6% for the lowest income group.

H3: This hypothesis is sustained at

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H5e: is also sustained because the cheapest way of communicating via cell phones is sending messages. The rate ofsending messages is 20% among the lowest income group, and the rate falls to 3% among the highest income group.

H6: The hypothesis that negative comments about the brand in use leads to brand switching is supported. 61% of theparticipants report switching to another brand if they strongly believe negative comments about the brand, whereasonly 17% agree to switch if they dont believe in it.

H7: Long-term usage of the same brand leads to higher involvement. This hypothesis is sustained at all levels ofinvolvement.H7a: Identification with the brands (seeing oneself as a member of the brands family group) produces a significantdifference based on the length of time the brand has been used. 29% of the users who used the same brand more than60 months see themselves as a member of the brands family group, whereas this rate falls to less than 12% of theusers who used the same brand fewer than 16 months.H7b: This hypothesis is also sustained at a high level of significance; 25% of the long-term users strongly agree thatthey often praise this brand to their friends, whereas this rate falls to less than 13% of those persons who used thesame brand for fewer than six months.H7c: Insisting on the same brand, avoiding the purchase of any other brand and searching until the brand is found arewidely accepted ideas among users who used the same brand for more than 60 months. This rate is 25% to less than14% when compared with those who used the same brand for fewer than six months.H7d: 32% of long-term users believe that the brand they are using fulfills its task better than any other brands; on the

other hand, only 14 % of the short-term users agree with this proposal.H7e: People tend to defend the brand they are using against negative comments, but there is a significant gap betweenlong-term users (23%) and short-term users (16%) of the same brand.H7f: Feeling that using the same brand maintains a good experience for the user is a common opinion shared by thelong-term users. 24% of the long-term users share this idea, whereas less than 14% of the short-terms users accept it.The price paid is an important moderating variable governing H7 since, at lower priced itemsless than 200 USDall the relationships discussed above lose their significance. In other words, high involvement is not observed oncheaper items.

H8: In this analysis, the number of brands is reduced to five from 14. 95% of all participants in the study use thesefirst five brands. There is a significant difference between the market leader (in this research 500 out of 1059respondents are reported to use this brand) and its followers. The rate of satisfaction is 22% for the market leader and15% or less for other brands. The rate of perception of consistent quality is 39% for the market leader and 20% or less

for the others. The trust scores are 49% for the leader and 30% or less for the others. The ability to solve problems is20% for the leader and 15% or less for the others. Avoidance of cognitive dissonance is 49% for the leader and 25%or less for the others. Deriving maximum value from the brand is 24% for the leader and 15% or less for the othersH9: This hypothesis is also sustained since personal evaluation of the brand and relying on past experience helpedmuch more in the buying decision than other means. 23% strongly agreed that prior experience was important, while21% agreed that personal evaluation was important. None of the other factors exceeded 15%.

H10: The hypothesis that a higher price paid for the phone triggers repeat purchases of the same brand was tested and

accepted at the

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