Discuss User for MBA

Posted on

Is Brand Loyalty still important?

Is brand loyalty as important a factor today as it was 10 - 15 years ago? Why or why not?

This post was part of TyroCity discussion forum
Question asked by abiral_joshi

Oldest comments (6)

sushant profile image

Recently, I saw a Nepali candy called XS candy, a product of Kwality confectionery, totally failing in the Nepali Market.

What is value?

A product exists to give value to a customer. If a product isn’t able to give some value, the product might not be successful in gaining attention. According to (Schneider & Hall, 2011) has listed 5 flaws for the product failures, which are as follows

Flaw 1: The company can’t support fast growth: The company cannot meet the market demand at the desired quality

Flaw 2: The product falls short of claims and gets bashed: The product is over-hyped and under-performance.

Flaw 3: The new item exists in “product limbo.”: Testing the segment of market of the product before launching.

Flaw 4: The product defines a new category and requires substantial consumer education—but doesn’t get it: The product is new and technologically different so as the user needs to learn to operate it

Flaw 5: The product is revolutionary, but there’s no market for it :

XS candy was a qualitative product of Kwality Group, which though produces low quality products and mostly targets the rural market. At first, the product was qualitative, giving taste of world class candies with an average packaging. Later the company couldn’t deliver the same quality candy and the packing wasn’t good too.

I think the product fits into Flaw-3. The product was high quality chocolate but targeted the same market segment that they used to focus. I would have repacked the chocolate into a good package. On next, I would have positioned it as high class chocolates. Thirdly, I would have focused to the school by giving them to the students to taste the product.

shantamilan profile image

Brand creation and loyalty have been the talk of entrepreneurs and marketers for a long time. Over the years people have concentrated so much time and effort, that the definition and understanding customer loyalty that it has been stretched to a level, where it is both confusing and overrated. A.G. Lafley, Roger L. Martin in their article published in the Harvard Business Review points out that even though marketers have been trying to appeal to customers with new products the customers purchasing decision is almost spontaneous. (Lafley & Roger, 2017)

Starting with a spontaneous purchase of a product the customer is highly likely to choose the same product next time if it fulfils their need. Each time the product is repurchase, the competitive advantage of the product over its rival increases as customers care less for other products. One reason is their perceived risk has been averted as they have already tasted it. While understanding brand loyalty it is also important to understand the term competitive advantage. Having competitive advantage is not possible for ever. Products and organizations have to change with times and behaviour demand of the customer. "To keep your customers–and to attract new ones–you need to remain relevant and superior. (Lafley & Roger, 2017)” The only way to have competitive advantage is to keep the customers repeat their purchasing habit and keep competitors at bay by playing to the strength of company’s i.e. core competencies.

Loyalty has more to do with easier access of product rather than brand. It has been found that customers choose products that are easiest to purchase. As an example, most Nepalese when going to a restaurant look through the menu and order momo at the end. This is because they have done it before and is the easiest available choice. Choosing momo also averts the perceived risk of a consumer as this has already been tasted before. Marketing defines that great products are what makes life easy so having easier access and having more competitive advantage is more important than brand loyalty.

Michael Schrage in his article on ‘Why Customer Loyalty Program Isn’t Working’ presents another angle on brand loyalty. He comments that loyalty is an ethical matter rather than just a data to manipulate customers and market share. It is a co-created tool that can be used to create a healthy relationship between customers and companies and it depends on both parties as it is a two way street. (Schrage, 2015)

Thus it is clearly evident that brand loyalty has changed today from what it used to be 10-15 years before where people perceived brand to be better than other goods and preferred it. Before goods produced in Germany and the UK were purchased without any second thought as they signified quality. But these days people will rather use a cheaper and more accessible product than become loyal to brands. For example apparels like jeans, mobiles etc.


Lafley, A. G., & Roger, M. L. (2017, Jan-Feb). Customer Loyalty Is Overrated. Harvard Business Review . Retrieved from hbr.org/2017/01/customer-loyalty-i...

Schrage, M. (2015, March 10). Why Your Customer Loyalty Program Isn’t Working. Harvard Business Review . Retrieved from hbr.org/2015/03/why-your-customer-...

ncitujjwal profile image

Loyalty is a commitment to a product, a brand or a service based on the rational or emotional decision -molded by their needs and demands at that time by the customer at the time of the purchase (Tucker, 1964). Moreover, brand loyalty is the topic interest to both the academicians and practitioners involved with marketing. Here, brand loyalty occurs when a customer chooses to repeatedly purchase a product by the same company of the same brand instead of the substitute product produced by the competitors. For e.g. some people will always buy Nike products while others will buy Reebok (Kyner, 1973).

There are various reason why brand loyalty is important one of the major aspects is that it reduces the cost of production because the sales volume will be higher. Similarly, companies with brand-loyal customers don’t have to invest a lot of money while marketing the products which will permit the companies to either retain more earnings or to invest the resources elsewhere. Likewise, Brand loyalty is important as companies may use premium pricing that will increase the profit margin. Here, the loyal customer will recommend the products and do word of mouth marketing (Advani, 2005). Brand loyalty is important for marketers because it helps in retaining customers and often requires less marketing resources than acquiring new ones. Furthermore, it has a positive implication on brand equity. However, there are mainly three approaches to brand loyalty which are the behavioral approach, attitudinal approach and the composite approach (Temessek, 2009).

Here, 10-15 years ago there was less competition the customers had no choice but to stick to one brand and purchase that product. However, in today’s age due to the competitive nature people can easier switch their interest from one particular brand to another. Here, for examples before 10-15 years I had no choice but to buy Nokia cell phones but due to the technology enhancement and new innovative ideas now in this age, I can easily switch from one brand to another.


Advani, S. R. (2005). Factors affecting Brand Loyalty: A Study in an Emerging Market fast moving consumer goods. Journal of Customer Behavior , 251-257.

Kyner, J. J. (1973). Brand Loyalty vs. Repeat Purchasing Behavior. Journal of Marketing Research , 1-9.

Temessek, M. T. (2009). Brand Loyalty: Impact of Cognitive and Affective Variables. Journal of Marketing and Applied Informatics , 34-39.

Tucker, W. (1964). The Development of Brand Loyalty. Journal of Marketing Research , 32-35.

ujjwalpoudel profile image

Kotler & Keller (2016), in their book Marketing Management, brand loyalty is a customer purchasing products and services from the same brand over and over rather than changing to other brands. It consists of a commitment by a consumer’s to repurchase or continue to use one brand. It is more than simply repurchasing. Businesses may provide a customer loyalty programs that keeps customers coming back. Also, the customers enjoy the rewards and perks of being a loyal customer. The Brand loyalty is key factor in term of customer retention. Organizations need to identify the loyal behaviours that most deserve explicit recognition, reward, and investment (Schrage, 2015). In most cases, the loyalty of a buyer is towards a particular product but some of the brands also have their own loyal followers.

Take Coke for example, Coke has been selling their product from centuries ago and yet they seem to find large share of market today. This is because; they have been targeting their customer from one generation to another. Coke is way ahead of time. They are targeting the next generation every time they launch their product.

For automobile example, Toyota is a brand which had strong brand representation since its inception. For them importance of brand positioning and brand loyalty is pivotal. That’s why such organization survived and performed well financially for such long period of time and became market leader convincingly.

The examples of Coke and Toyota clearly illustrate that true loyalty doesn’t just serve and preserve valuable customer relationships; it creates and inspires more valuable customers. Loyalty is a mutual investment, not just an exchange. That’s why; improving the loyalty of bargain hunters rarely delivers sustainable value. In previous years i.e. 10 to 15 year back brand loyalty was important for them and still in today’s intense competitive market it is core component of success.

In fact today, people have become more conscious than ever. At past, people had few options so they simply were found experimenting one product after another until they meet the consensus to stick to one particular brand. So simply it was an easy brand loyalty. But today to be loyal to brand is as competitive as ever. Every product is a good quality product and different to one another. This has eventually led people to become more open and knowledgeable about the products when they buy as ever. People buy goods online but they want the best one. And once they buy the product they become obsessed with those products. This is why; holding on to customers is not a matter of continually adapting to changing needs in order to remain the rational or emotional best fit. It about helping customers avoid has to make yet another choice (Lafley & Martin, 2017). To sum up, brand loyalty is the core and value deriving component of most of the company as it was 10 to 15 year back.


Kotler, P., & Keller, K. L. (2016). Marketing Management . Boston: Pearson.

Lafley, A. G., & Martin, R. L. (2017). Customer loyalty is overrated. In hrd.org . Retrieved from hbr.org/2017/01/customer-loyalty-i... 1

Schrage, M. (2015). Why your customer loyalty program isn’t working. In hrd.org . Retrieved from hbr.org/2015/03/why-your-cu

dipadhungana profile image

Brand loyalty is the degree to which a customer purchases the same brand within a product category. It is the positive feelings towards a brand and dedication to purchase the same product or service repeatedly. It is more than simple repurchasing. People feel certain level of connection to the brand when they are loyal to it. For example: The people using IPhone do not prefer using androids. Similarly, people who are loyal to Nike always purchase products of same brand. The brand loyalty has three major approaches: behavioral approach, attitudinal approach and composite approach. The behavioral approach refers to the consumer’s repetitive and systematic purchasing behavior of a given brand. Attitudinal approach refers to consumer’s positive beliefs and feelings towards a brand among a set of competing brands. The composite approach refers to the combination of both the behavioral and attitudinal approaches (Temessek, 2009).

I think brand loyalty was not as important factor before 10 -15 years as it is today. It is because at that time there was not many choices and people were forced to buy whatever was available. The competition was not as fierce as it is today. Products were developed to satisfy the need rather than creating brand image. For example: When Nokia was first introduced, people did not have other choices so whoever need cellphones bought it. But now brand loyalty is important to keep customers entertained and engaged, foster stronger relationships, and ultimately increase customer lifetime value and Return on Investment (Lafley & Martin , 2017).

In addition, loyal base of satisfied customers can reduce the costs for marketing and promotion by spreading positive word of mouth. The company can increase the profit margin by charging premium price for the product. Brand loyalty is important not only to sustain and retain the customers but also to acquire new customers by marketing from the satisfied customers. Customers today want the companies to co-create with them and the companies want customers to taking active part in product development and advocate about product. So brand loyalty is of great importance.

In order to maintain the brand loyalty and prevent the customers from shifting to other competitive brands, the companies should support customers with valuable content and wonderful customer experience. Allowing discounts, being consistent, introducing loyalty programs and offering freebies can help in maintaining brand loyalty. Furthermore they should have a strong storytelling and social networking for this.

Lafley , A. G., & Martin , R. L. (2017). Customer Loyalty Is Overrated. Harvard Business Review .

Temessek, M. T. (2009). Brand Loyalty: Impact of Cognitive and Affective Variables. Journal of Marketing and Applied Informatics , 34-89.

angel profile image
Angel Paudel

With the changing time and the business dynamics, customer’s loyalty towards a brand is shifting very much as well. This is making business task to retain customer difficult and thus to maintain brand loyalty harder. However, no matter how difficult it is to retain existing customers if a business can do that, they can keep up with their growth and can take a lead towards beating the competition (van der Westhuizen, 2018). Brand loyalty in the current age and time is of a lot more significance/importance than it was 10-15 years ago. To back the statement, the following discussion post includes three of the key personal discovery in the paragraphs to follow.

Firstly, the importance of repeat customer is higher with business spending a lot to acquire new customers at the current time. If you’re a business with an online presence and have an e-commerce website selling stuff, the new customers won’t be aware about the level of trustworthiness or quality and thus hesitates to make any purchase however ones that already have ordered one or more time will have a feeling towards you and would order with more confidence. This is similar to any other business model as well (Alexander, 2012). A business has a 60-70% chance of selling to the existing customer with just minimum percentage to new customers who have not bought from you. So, it’s even more important to retain existing customers.

Secondly, word-of-mouth counts a lot in selling a product or service. And, who more is likely to recommend your service than your trusted loyal customers. When someone close to you recommends something to you, no matter if that’s of your interest or not, you’ll certainly check it and will be inclined towards buying it as well. According to a survey by Neilsen, 92% of shoppers trusted word-of-mouth referrals and recommendations from family and friends over all other sources of product information like advertisements. This thus acts like the best advertisement and won’t cost a dime to the business to acquire some new customer who will be more so associated with the brand already (“Demystifying word-of-mouth marketing”, 2012).

Finally, a business can make changes to the product size/volume (like decreasing it) or increase the price and even then the customers will manage their budget accordingly and stick with the brand. Like a person loyal towards "Sprite” as cold drinks won’t move to "Thumbs up” just because "Thumbs up” provides some added benefits. In addition to that, it also allows a business to provide some substandard product and the customer is more likely to buy that product without breaking his/her habits. That just helps increase the overall sells value of the business while also keeping the customer acquisition cost to low.

In conclusion, brand loyalty is an important factor today than it was ever before as the acquisition cost of the consumers are a lot higher in the current trend. With brand loyalty, a business can leverage the most to maximize the sells to their existing customer, make use of word-of-mouth sells tactics and make changes to a product or add the substandard product which loyal customers will still purchase.


Alexander, M. (2012). Delight the Customer: A Predictive Model for Repeat Purchase Behavior. Journal Of Relationship Marketing , 11 (2), 116-123. doi: 10.1080/15332667.2012.682329

Demystifying word-of-mouth marketing. (2012). Leader To Leader , 2012 (64), 65-66. doi: 10.1002/ltl.20026

van der Westhuizen, L. (2018). Brand loyalty: exploring self-brand connection and brand experience. Journal Of Product & Brand Management , 27 (2), 172-184. doi: 10.1108/jpbm-07-2016-1281