Corporate branding of loyalty Essay

Design/methodology/approach: A sample of 300 customers were interviewed over a period of 3 weeks using a face to face interview. Findings: The findings indicate that perception of brand trust is a good predictor of loyalty towards a telecoms service provider. Key recommendations are discussed Originality/value: To our knowledge, there have not been any studies that have specifically the influence of brand-related factors on loyalty in the telecoms industry in Mauritius. This study therefore offers a unique opportunity to assess the power of corporate branding as a predictor of loyalty.

Keywords: Branding, Brand Loyalty, Brand values, Brand associations, Brand positioning/image, Brand trust 2 Background There have not been any studies that have specifically investigated the influence of perambulated factors on loyalty in the telecoms industry in Mauritius. However, branding has been attracting increasing attention and interest in today’s hypersensitive marketplace (Goldsmith, 2004; Alden et al. ,1999; Karmic et al. , 1999). Increasing competition pressures have made loyalty and thus, profitability important goals for practitioners (Perrine-Martinets, 2004).

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Enhancing brand loyalty is difficult when consumers’ choice is widening at an overstraining rate. It seems that brand loyalty will be even more difficult to gain in future. Decreasing brand loyalty is, undoubtedly, a constant threat to any business. Asker (1996) and Keller (2001) have argued that a robust and trusted corporate brand is vital to the success of any organization. There is a widespread well-grounded belief that a brand’s image strongly influences buying behavior is widespread (Rumanian and Sharp, 2003).

Past studies have suggested that customer relationships can be strengthened by investigating and exploiting the emotional bond that exists between customers and the companies (Asker, 1996 and Keller, 1993). In a similar vein, Keller (2001) has asserted that an organization can use branding to set itself apart from the rest to how customers why they are better than the others when such a wide variety of choice is available to them and everybody seems to be pressed for time.

In service organizations, the consumer’s brand perceptions of intangibles such as implied reliability, quality, and image of product innovation and expertise play a critical role in determining customer brand loyalty (Keller, 2001). Experience with a brand lowers perceived risk and enhances loyalty. It can be inferred that lack of experience with a brand leads to higher risk perceptions reducing the likelihood of that brand being ride by customers. It was found that brand attachment could explain loyalty (Asker 1991; Macaque et al. , 1993).

Thus, its power of branding in enhancing consumer loyalty cannot be overlooked and underestimated. Mauritius Telecoms (MET) The case of Mauritius Telecoms (MET) is explored in this paper. Established in 1992, Mauritius Telecoms (MET) stands out as the only telecommunications operator in Mauritius to offer a whole range of services and solutions through fixed lines, mobile and Internet, meeting the diverse communication needs of customers. Along the ears, the company has become one of the leading enterprises in Mauritius with a turnover of RSI 7. Billion for the year ending 31 December 2009. MET has more than 335,000 fixed telephone lines; 630,000 mobile subscribers; and 70,000 Internet subscribers (Source: Annual Report 2009) for a population of 1. 2 million. In the year 2000, in anticipation of the total liberation’s, MET entered into a 3 strategic partnership with France Telecoms to derive the maximum benefit from the knowledge, experience and technical expertise of its partner. MET has been enjoying monopoly privileges since its foundation.

However, January 2003, the telecommunications market was opened to full competition and MET, the historical operator and the former sole provider of fixed (land) line services is, thus, operating in a fully liberalized environment. This new environment is characterized by constant changes and intense rivalry. Competitors entering the fixed line (land-line) markets have increased dynamism in the industry; bringing about more offers; making more choices available for customers.

In this situation, the chances of MET losing some of its customers are big. Customers that are unhappy with the service performance of MET ill probably “vote with their feet” by switching operators or reducing their consumption of telecommunications products or services with MET. The growing level of competition in the telecommunications industry has prompted the author to study the effect of the perception of MET brand values, MET brand associations, MET brand positioning/image, MET brand trust and MET brand presence on (brand) loyalty towards MET.

Study Objectives The main objective of this research was to investigate the effect of perceived MET brand values, perceived MET brand associations, perceived MET brand positioning/ mage, perceived MET brand trust and perceived MET brand presence on (brand) loyalty towards MET. Various hypotheses were developed as shown below: Research Hypotheses HI – The more positive the perceived MET brand values, the more loyal customers will be towards MET. H2O – The more positive the perceived MET brand associations, the more loyal customers will be towards MET.

HA – The more positive the perceived MET brand positioning/image, the more loyal, HA – The more positive the perceived MET brand trust, the more loyal, customers will HA – The more positive the perceived MET brand presence, the more loyal customers ill be towards MET. 4 Literature Review Importance of Branding A brand is the implied promise a company holds in the minds of audiences (Asker, 1996). Petrodollar et al. , (2002) argue that it matters less what is in the corporate portfolio when the economy is expanding rapidly and all new products and emerging brands seem to offer prospects of contributing to the creation of shareholder value.

Assessing the portfolio takes on a decidedly new relevance, however, when customers have less to spend and are scrutinizing every purchase, and looking harder to find the best partner and brand to fit their needs. The way consumers perceive brand is a key determinant of long-term business – consumer relationships. Branding is increasingly discussed during strategic planning session conversations among senior level decision makers and in boardrooms throughout the corporate world. That is because of the substantial impact a well-managed brand can have on the bottom line (Keller, 2001).

Recent studies revealed that corporate brands are adored, venerated and coveted by customers and organizations alike, and, therefore, represent one of the most fascinating phenomena of the business environment in he twenty-first century (Loins, 2000; Lewis, 2000; Patti, 2000; Blamer, 2001 a, b; Bickerers, 2000; Gray and Blamer, 2001; Hatch and Schultz, 2001; McDonald, et al. , 2001; Newman, 2001; Simons and Dib, 2001; Blamer and Geyser, 2003). Their importance is irrefutable. Brands, in their various guises, are integral to our everyday existence (Sherry, 1995).

There is an increasing realization that corporate brands serve as a powerful navigational tool to a variety of stakeholders for a miscellany of purposes including employment, investment and, most importantly, consumer buying behavior (Blamer and Gray, 2003). Corporate branding is generally perceived as: symbols associated with key values (Deceleration, 1999; Tillie, 1999; Urdu, 1999) ; As such, corporate brands are seen as a guarantee of quality, as an insurance against risk of poor performance or financial risk.

It can be inferred, corporate brands have a utility in several regards: they communicate the brand’s values (often seen as a promise), they afford a means of differentiation from their competitors, and they enhance the esteem and loyalty in which the organization is held by its stakeholder groups (Blamer, 2001 b). McDonald, De Correction and Harris (2001) identified one of the reasons for the increased interest in corporate branding in the sass’s as being the increased role of the services sector in the economy. Basically, corporate branding is a manifestation of the features that distinguish an organization from its competitors.

It is a reflection of the organization’s ability to satisfy consumer’s needs namely: trust in the company to deliver a consistent level of product/service, quality of the product/service at a 5 reasonable price and the reduction of risk of making an unwise purchase decision Pick, et al. , 2003). Brand Values The concept of brand values implies that what makes a brand a brand is its “personality’ which distinguishes it from others and that the presence of this personality imparts some utility – however tangible – to the consumer.

There is a strong body of research supporting the idea of brand personality as a source of value to the consumer (King, 1973). Brand values provide a promise of sameness and predictability (Keller, 2002/3). However, the promise of sameness and predictability is no longer a strong enough brand proposition to meet customer expectations, as Heinz conceded when it announced its intention to supply supermarkets with own- label baked beans (Kimono, 2004). Brand Associations They are anything that is linked in memory too brand (Asker, 1991. . 1 09). Keller (1998) defines brand associations as informational nodes linked to the brand node in memory that contains the meaning of the brand for consumers. A brand can convey either a positive or a negative message about the product to the consumer (Kim and Chunk, 1997, p. 361). The underlying value of a brand is often based upon specific association of a “use context” such as heart attack prevention can provide a reason- o-buy which can attract customers. Such an association represents the product’s meaning to customers.

Brand associations represent bases for purchase decision and for brand loyalty (Asker, 1991). There are a host of possible associations that a firm can build in a brand. Product attributes (customer benefits) are an important class of associations, but there are others that can be important in some contexts (Asker 1991, p. 114). Studies that have focused specifically on brand associations are those of Kim and Chunk (1997); Till (1998) and; Chem. (2001). According to Asker (1991) there are at least nine brand associations.

Brand associations are useful to marketers. Marketers use brand associations to differentiate, position, and extend brands, to create positive attitudes and feelings towards brands, and to suggest attributes or benefits of purchasing or using a specific brand. However, brand associations are of more use to the customer than the marketer (Asker, 1991). Brand Positioning According to Hook et al. , (2000), Firms position their brand using the organization’s attributes such as innovation, a drive for quality, and a concern for the environment.

A firm can position its brand with respect to a competitor. They suggested that rand’s should 6 develop distinct images and that these images will attract specific consumer segment. Consequently, the consumer segment will see the brand as being valuable to them. Basically, in marketing an organization, business leaders need to consider four components to develop its brand positioning in the supply chain: Its overall reputation. Product/service performance. Product and customer portfolio.

Networks (Knox and Magellan, Bibb) Brand trust Many researchers (Fourier, 1995; Survive, 1996; Morgan and Hunt, 1994) support the importance of trust in developing positive and favorable attitudes, and resulting in commitment to a certain brand as the maximum expression of a successful relationship between the consumer and the brand. Trust is a key variable in the development of an enduring desire to maintain a relationship in the long term, for example with a brand. The consideration of trust in the brand domain derives some important and interesting implications.

It was proposed that the relationship between the brand and the consumer implies that the brand possesses some characteristics that go beyond its consideration as a mere product. The idea of looking at a brand as a person has already been suggested by authors such as Asker 1991), Correction and McDonald (1998) and Fourier (1998). Trust is related to the ability and capacities attributed to a business to perform some activities and accomplish its obligations and promises. A wide variety of concepts have been used such as ability (Entailed, 1992; Mayer, et al. 1995), credibility (Gamesman, 1994) or reliability (Hess, 1995). Based on previous discussion it was argued that brand trust is a feeling of security held by the consumer that the brand will meet his/her consumption expectations. Romper et al. (1985) suggest that trust evolves from past experience and prior interaction. This idea is also supported by other authors such as Arvada and Garömorons (1996), who consider that it develops through experience, and Curran et al. (1998) for whom trust is a state of being that develops over time.

Brand trust exerts a stronger influence on customer commitment than does overall satisfaction (Dalgal-Ballasted & Manure-AlumГn 2001). Brand Loyalty The concept of brand loyalty has been extensively discussed in traditional marketing literature with the main emphasis on two different dimensions of the concept: behavioral and attitudinal loyalty. Oliver (1997) has presented a conceptual ramekin of brand loyalty that 7 includes the full spectrum of brand loyalty based on a hierarchy of effects model with cognitive, affective, conceive (behavioral intent), and action (repeat purchase behavior) dimensions.

A definition integrating this multidimensional construct has been given (Oliver, 1999) as: “a deeply held commitment to rebury or repatriation a preferred product/service consistently in the future, thereby causing repetitive same- brand or same brand-set purchasing, despite situational influences and marketing efforts having the potential to cause switching behavior. ” Research methodology Sample Design A multi-stage sampling method was used to determine a number of respondents.

Quota sampling alone proved to be insufficient, thus, a quota was drawn from the sampling frame and this quota was divided on the basis of age and gender of respondents. A sample of 300 participants was selected from both rural and urban regions. The survey was conducted in 17 sales outlet of MET and these outlets are located in different regions across Mauritius. This was essential to ensure a better representatives of the main population A Judgment and quota sample of 300 was drawn from the sampling frame which was divided on the basis of gender and age to ensure the representatives across the different categories.

Paying strict adherence to age and gender criteria, 20 respondents was interviewed at each sales outlet. Data collection and Analysis The information necessary to carry out the empirical study was collected through face-to-face interviews accompanied using a questionnaire over a period of three weeks. The Statistical Package for the Social Sciences (SPAS 13. 0) was employed for the data analysis. As most of the data were collected using Liker scales, tabulation was straightforward. Descriptive statistics were calculated for all survey items namely mean scores and standard deviation.

Moreover, some statistical tests namely correlation and multiple regression analyses were used to test the significance of the results and to analyses the relationships and associations among different variables respectively. To determine the effect of the independent variables on the dependent variable, abbreviate analyses were first reported and then, multivariate analysis was reported. Multiple regression analysis was employed to more thoroughly test the firs five hypotheses. The rationale behind this was to investigate about the predictors of the dependent variable (Hem et al. 2003).

Survey Findings 8 A positive correlation is observed between overall evaluation of MET brand values and overall evaluation of (brand) loyalty towards MET. The correlation coefficient between the two variables is significant (. 505), supporting HI . We, therefore, reject the null hypothesis Ho (Value The correlation coefficient between the two variables is significant (. 650), supporting H2O. We, therefore, reject the null hypothesis Ho (P-value A positive correlation between overall evaluation of MET brand trust and overall evaluation of loyalty towards MET is also revealed. The correlation coefficient between the two variables is highly significant (. 738), supporting HA. We, therefore, reject the null hypothesis Ho (P-value In the above model, the value is . 747, which indicates that there is a great deal of variance shared by the independent variables and the dependent variables. R Square is the amount of variance explained by the given set of predictor variables. In the model, the value is . 558, which indicates that 56% of the variance in the dependent variable is explained by the independent variables. 9 The NOVA table that describes the overall variance accounted for in the model is shown in Table VI’. Put another way, this F statistic tests whether the R square reapportion of variance in the dependent variable accounted for by the predictors is zero.

If the null hypothesis were true, then that would indicate that there is not a regression relationship between the dependent variable and the predictor variables. But, instead, it appears that the five predictor variables in the above model are not all equal to each other and could be used to predict the dependent variable, overall evaluation of loyalty towards MET, as is indicated by a large F value and a small significance level. Information about the effects of individual predictor variables is presented in Table XIII. There are two types of information in the Coefficients table: coefficients and significance tests.

The coefficients indicate the increase in the value of the dependent variable for each unit increase in the predictor variable. For example, comparing the unsubstantiated coefficient of overall evaluation of MET brand trust (. 607), with the unsubstantiated coefficient of the variable, overall evaluation of MET brand values (0. 44), it appears that perception of MET brand trust is a greater predictor of (brand) loyalty towards MET than is perception of MET brand values. However, to get a more accurate picture, we need to examine the standardized efficient, or Beta coefficients.