Posted in Marketing & Strategy Articles, Total Reads: 4763
, Published on 03 July 2011
Brand loyalty in fast moving consumer goods space is fast changing in the Indian context. Armed with better purchasing power, wider options and desire to experiment, the Indian consumer is redefining the concept of brand loyalty. What are the different ways through which brands can strengthen their loyalty?
Product Differentiation: If the products are well differentiated among the segment and the difference is perceivable by the consumer then there are chances of building brand loyalty based on satisfaction derived out of the brand that fits their needs. Loyalty is driven by functional or symbolic benefits. Functional benefits here refer to tangible features offered by the product while symbolic benefits are intangible features like brand personality. What are the different product differentiation variables? It is important to understand these variables while devising the product differentiation strategy. There is no point having a well differentiated product which is no one is willing to buy. The following are important variables :
What are the basic needs - Price, size etc
What are the expected needs – Quality, level of service
What are the desired needs
Price Differentiation: Indian consumer is very price sensitive. If the price differentiation is perceivable then price led loyalty can be built. Price differentiation is often practiced by supermarkets & hypermarkets, airline companies and FMCG brands, which comes out with sales promotion and freebies. But continued sales promotion can also lead to brand dilution. For example, Milo when it was launched in India had always some freebies like cricket bat, tennis ball etc on its purchase. This helped Milo initially but as soon as the sales promotion was stopped the sales of Milo nosedived and the product had to be taken out of Indian Market. More the Sales promotions, lesser the likelihood of brand loyalty in the segment which is the focus of such efforts. Sales promotion strategy should be used well with overall strategy of the brand. A premium brand which gets into frequent sales promotion has the risk of losing its premiumness — a permanent damage to a brand which has spent years creating the premium aura. Price can also be taken as indicator of brand quality, and customer might go for higher prices options. Price led differentiation should be carefully considered and customer should not never perceive dilution.
Branding Activity: Branding activity is often associated with the brand names, logos, symbol, images and associations. Branding activity influences customers towards not only functional aspects of product but also towards symbolic aspects. Cadbury dairy milk’s advertisement always focus on the emotional connect of the consumers. This is one good example of using symbolic dimension. Branding activity can also be achieved through sponsorships.
Involvement of Consumers: Higher involvement of customers in the brand promotions means higher rate of repeat purchase. With the advent of social media more and more brands are involving consumers in the new initiatives through various social networking websites like facebook, twitter etc.
Brands need to continuously align themselves to the changing consumer habits as well as the changing selling and promotion mechanisms. Earlier, commercial of TV and newspaper was enough but with the proliferation of mobile, internet and other innovative means, these have just one of multiple ways of branding. Earlier, the customers’ decision was influenced by traders who would recommend a few products due to the margins he gets. Now the modern trade offers standardized layout for products, which allows the buyers to pick products of their choice. It is upto the brands how they communicate their value and perceived benefits to build brand loyalty.
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