20

Chapter–VI

SUMMARY OF FINDINGS, CONCLUSION AND POLICY

IMPLICATIONS
CHAPTER–I

INTRODUCTION AND DESIGN OF THE STUDY

INTRODUCTION

For decades now building brand loyalty has been propounded as the

panacea for all organizations to combat the increasing competition in the market

place. Various studies have been carried out to understand what constitutes

loyalty towards a brand. Early researchers focused on repurchase behaviour as a

measure of loyalty towards a brand. This singular focus on repeat buying as the

only indicator of customer loyalty towards a brand meant that it was assumed that
 21

big brands in terms of market share were the ones that had the most brand loyal

customers. This created the “Double Jeopardy” phenomenon for smaller brands,

i.e. not only do they have fewer users but their users buy/use them less frequently.

But from early 1970s a debate has been going on these lines when Driver

(1996)1 argued that loyalty involved more than a behavioural measure of

repurchase. In recent times, researchers like Dick and Basu (1994)2 have also

questioned this assumption by pointing out that this approach confuses the

“number of a brand‟s devotees with the degree of their devotion to it”. This

approach only leads to the conclusion that the big brands will continue to remain

big with no hope for smaller brands to ever capture greater market shares.

Alternative approaches of looking at brand loyalty have been suggested in

recent times. These studies have pointed out that repurchase behaviour may be

more of a result of the constraints facing the customers like the brand being the

only one available at the store near their home, rather than because of a conscious

effort on their part to stick with one particular brand. Thus researchers in recent

times have focused on analyzing and comprehending another dimension of brand

1. Driver, L., (1996), “What is loyalty in customer loyalty: The issues for the
90s”, The Researcher, 1 (1), pp.2-5.

2. Dide, A.S., and Basu, C., (1994), “Customer Loyalty: Toward an integrated
framework”, Journal of the Academy of Marketing Science, 22 (2), pp.99-
113.
 22

loyalty, viz. Attitudinal Loyalty (referred to as Mental Loyalty in certain studies).

This loyalty construct instead of focusing on whether or not a consumer

repurchases a product looks at the consumer‟s perception of the brand. Now stress

is laid on going beyond just achieving behavioural loyalty but establishing

attitudinal loyalty to ensure a long-term relationship with the customer.

So generally customer loyalty programs are used to

 Maintain sales levels, profits and margins

 Increase the loyalty and potential value of existing customers

 Increase cross product buying by existing customers

 Attempt to differentiate a parity brand

 Pre-empt the entry of a new parity brand

 Pre-empt the competitor competitor from introducing a similar loyalty

scheme. (Andreassen, 1998)3

The results of their study rebut the arguments from which the various

benefits of brand loyalty are derived. It costs less to serve loyal customers i.e.,

customer acquisition costs are spread over more number of transactions. Also

long term customers are used to the processes requiring less „hand-holding‟. The

3. Andreassen, T.W., (1998), “Customer Loyalty and Complex Services”,

International Journal of Service Industry Management, 9 (1), pp.178-194.
 23

result of the study. No direct cost benefits can be seen accruing form loyalty. The

benefits are likely to be industry specific with certain industries showing service

cost reduction for loyal customers. Loyal Customers pay higher prices for the

same bundle of goods i.e. Long Term customer will have higher switching costs.

The result of the study-Loyal customers are more price sensitive than an

occasional customer as they know the real worth of the product. The same is also

evident from institutional sales where huge discounts are offered to gain a long-

term contract. Loyal customers market the company. The result of the study-Only

behavioural measures (as shown by purchase behaviour) are not enough to assume

that the customers are promoting the company through WOM. Attitudinal loyalty

(as measured by their opinions about the company and the service) in more critical

to ensure that the customers push the company‟s name.

The link between customer satisfaction and customer loyalty has also been

established. Completely satisfied customers are strongly loyal customers (Jones

and Sasser 1995)4. They argue that even in markets with little competition,

providing with outstanding value is the only reliable way to achieve sustained

customer satisfaction and loyalty. They also recommend different satisfaction

levels reflect different issues and thus require different actions.

4. Jones, M.A., and Sasser, J., (1995), “Linkage between Customer Satisfaction
and Loyalty”, Journal of Services Marketing, 14 (1), pp.147-159.
 24

Studies have also been carried out to identify intergenerational influence for

products and brands to measure the extent of transfer of brand equity and brand

loyalty from one generation to another (East, et al., 1995 5; Feltham, 19986; Lin et

al., 20007). These studies conclude the following findings; intergenerational

impacts are at work across a spectrum of consumer behaviour, intergenerational

impacts can be measured at different stages of the consumer decision process,

intergenerational influences exist within a tumultuous, differentiated market place

and not all brands within a product category are equally likely to benefit from

intergenerational influences.

Thus, a rethink seems to be on about the previously obvious benefits of

building brand loyalty with the costs of various loyalty programs being compared

with the economic benefits accruing from it.

5. East, R., Harris, P. Willson, G. and Hammond, K., (1995), “Correlates of first-
brand loyalty”, Journal of Marketing Management, 11 (5), pp.487-497.

6. Feltham, T., (1998), “Leaving some: Trend Purchase influences on young

adults”, Journal of Common Marketing, 15 (4), pp.377-385.
7. Lin, C., War, W.Y. and Wang, Z.F., (2000), “A study of market structure:
brand loyalty and brand switching behaviours for durable household
appliances”, International Journal of Market Research, 42 (3), pp.277-300.
 25

This rethink has led to suggestions that there is need for „smarter‟ loyalty

building programs (Yim and Kannan, 1999)8. Company‟s loyalty strategy should

differentiate between customers who are likely to be more brand loyal than those

who are not, based on the fit between their needs and attitudes and the company‟s

offerings. The focus should be on building long term relationship with the former

while the company should look to milk the latter till they stick with the brand.

Studies have also been carried out to look at the impact of the different

incentives offered in loyalty programs (Wood, 2004) 9 have found that more the

incentive is compatible with the brand and the less tangible it is, greater is the

likelihood of leading to loyalty rather than drawing attention to itself.

McKinsey in a recent report by Tim Gokey and Harold Yin suggests that

the need is to look beyond brand loyalty to managing customer migration.

Marketer should analyse the customer profile and decide which customers to

retain, upgrade or let go off. The focus of this approach is the economic value

added by the customer. They suggest segmenting customers into six „Loyalty

Profiles‟ and then developing programs for each one separately.

8. Yim, C.K., Kannan, P.K., (1999), “Consumer behavioural loyalty”, Journal

of Business Research”, 44(2), pp.75-92.

9. Wood, L., (2004), “Dimensions of brand purchasing behaviour: Consumers in

the 18-24 age group”, Journal of Consumer behaviour, 4(1), pp.9-24.
 26

Fast Moving Consumer Goods (FMCG)

FMCG are products that have a quick shelf turnover, at relatively low cost

and don‟t require a lot of thought, time and financial investment to purchase. The

margin of profit on every individual FMCG product is less. However the huge

number of goods sold is what makes the difference. Hence profit in FMCGs

always translates to number of goods sold.

Fast moving consumer goods is a classification refers to a wide range of

frequently purchased consumer products including: toiletries, soaps, cosmetics,

teeth cleaning products, shaving products, detergents, other non-durables such as

glassware, bulbs, batteries, paper products and plastic goods such as buckets.

Three of the largest and best known examples of FMCGs companies are nestle,

unilever and procter and gamble. Examples of FMCG are soft drinks, tissue paper

and chocolate bars. Examples of FMCGs brands are coca-cola, Kleenex, Pepsi and

Believe.

The FMCG sector represents consumer goods required for daily or frequent

use. The main segments of this sector are personal care (Oral Care, Hair Care,

Soaps, Cosmetics, Toiletries), household care (fabric wash and household

cleaners), branded and packaged food, beverages (health beverages, soft drinks,

staples, cereals, dairy products, chocolates, bakery products) and tobacco.

 27

Indian FMCG Sector

The Indian FMCG sector is an important contributor to the country‟s Gross

Domestic Product. It is the fourth longest sector in the economy and is responsible

for five per cent of the total factory employment in India. The industries creates an

employment for 3 million people in down stream activities, much of which is

disbursed in small towns and rural India. The low-middle income group accounts

for over 60 per cent of the sectors sales. Rural markets account for 56 per cent of

the total domestic FMCG demand. Many of the global FMCG majors been present

in India for many decades. But in the last ten years, many of the smaller Indian

FMCG companies have gained in scale.

Current Scenario of FMCG Market in India

In India companies like ITC, HLL, Cadbury and nestle have been a

dominant force in the FMCG sector well supported by relatively less competition

and high entry barriers. As per the consumer survey by KSA-Technopark of the

total consumption expenditure, almost 40 per cent and 8 per cent was accounted

by groceries and personal care products respectively. Rapid unbanisation,

increased literacy and rising per capital income are the key growth drivers for the

sector. Around 45 per cent of the population in India is below 20 years of age and

the proportion of the young population is expected to increase in the next five
 28

years. The companies like HCL and ITC have dedicated initiatives targeted at the

rural market, these are still at a relatively nascent stage. Currently, organized

retailing accounts for just 3 per cent of total retail sales and is likely to touch 10

per cent over the next 3 to 5 years. Given the aggressive expansion plans of

players like Pantaloon, Trent shoppers‟ shop and shoprite, the FMCG sector has a

bright future.

Brands and products produced in FMCG Market in India

The companies in India produce a wide range of products under various

brand name. For example, the Nestle India produced Milk products, beverages,

prepared dishes, cholates and confectionaries and others under the brand names of

nestle everyday dairy whitner, nestle everyday ghee, nestle curds, nestle cerenal,

Nestly milk, Nescafe Classic, Nescafe Sunrise, Maggi – 2 minute Noodles, Nestle

Kit Kat, Nestle Munch, Nestle Milky Bar, Nestle Bar-one, Polo, Nestle Éclairs etc.

The HLL (Hindustan Lever Limited) produces personal care, fabric care,

beverages and foods under the brand names of Lux, Pears, Lifebuoy, Liril,

Hamam, Breeze, Dove, Rexona, Ponds, Fair and Lovely, Sunsilk, Clinic,

Pepsodent, Close-up, Axe, Rexona, Lakme, Aysh, Surf Excel, Rin, Wheel, Brooke

Bond, Lipton, Bru, Annapurna, Kissan, Kwality Walls etc.

 29

The Glaxo Smithleline produces the Aquafresh, Eno and Horlicks. The

Colgate Pamolive India Limited produces oral care products namely Colgate tooth

paste, Tooth powder, Whitening products, Palmolive Shower Gel, Shower Cream,

Bar Soap, Liquid hand wash, skin care and household care namely Axion Surface

Clean. The Britania company produces Britania Treat, Tiger, Good Day, Marie

Gold, Milk Bikies, Little Hearts and Nice Time in the FMCGs sector in India. The

Dabour India deals with Personal Care Product range namely Amla hair oil, Amla

lite hair oil; Health care product range namely Dabur Masla, Dabur Lal Tail,

Glucose D. etc., and foods product range namely Pure natural honey and a fiery

red–pepper sauce.

The Godfey Philips deals with cigarettes namely four square, jaisalmer,

Red & White, Tipper, North Pole, Prince, etc. and cigar brands namely Don

Diego, Har-a-tampa, etc. The Godrej company manufactures and markets edible

oils, Vanaspathi, fruit drinks, fruit nectar and bakery fats. The Nirma company

deals with the bath, detergent soap and powder, idozied salt, dish wash bar under

the brand name of Nirma. The ITC is the market leader in cigarettes in India. Its

highly popular portfolio of brands includes Wills, Insignia, India Kings, Gold

Flake, Navy cut, Scissors, Capstan, Berkeley, Bristole and Flake. ITC made its

entry into the branded and packaged foods business in 2001. It launched so many

brands in the confectionery, staples and snack food segments.

 30

NEED FOR THE STUDY

Building a base of loyal customers, who would prefer the brand in all

conditions, is one of the most important ways in which a marketer can secure his

brand from the fierce competition in the market place today. At the same time any

marketer who looks at loyalty as just repeated purchases of his brand, is being

extremely myopic. Loyalty towards a brand must go beyond tangible incentives

stimulated purchases should be directly linked to the brand to itself to form a

sustainable proposition. Thus, the need is to build a sense of attachment with the

brand, which goes beyond the inducements and directly links the customer to the

brand.

Brand Personality is one such important construct that a marketer can use to

develop that crucial link with the customer. If a marketer can make the brand

appeal as a person, someone that the customer identifies with and is attracted to

then there be a greater likelihood of the customer being loyal to the brand than by

any tangible inducement based programs.

This study will attempt to understand how a marketer can use the Brand

Personality construct to build sustainable loyalty towards his brand. For this the

following relatively unexplored areas will be studied:

 Why and in what sense do brand loyalties exist?

 31

 Insights into individual motivations for brand loyalty formation and

persistence are not yet explored.

 Where should a company direct its resources to inculcate loyalty

amongst customers or other alternatives such as a price cut, increased

advertising or increasing distribution coverage?

 How to choose the right customers and right industry for building

loyalty?

 Given that the product is a low involvement product, how likely is it that

an intangible incentive will prompt the customer repeat buy the product?

 How can relationship marketing be used to leverage the personality of a

brand to inculcate loyalty?

 How does one ensure consistency of communication of the brand

personality to the customers to minimize customer dissonance?

STATEMENT OF THE PROBLEM

The brand loyalty is an assent to the company. In fact, the cost of acquiring

new customers is higher than the cost of retaining existing customers. Hence, all

companies are trying to retain their existing customers. This is possible only when
 32

there is a brand loyalty among the customers. But it is a difficult task. In the case

of Fast Moving Consumer Goods Market, there is a frequent entry of new brand

and new companies. The consumers are also using and buying the FMCGs at

frequent interval. They are having so many alternatives, choices and brands.

Hence, it is very difficult to establish the brand loyalty among them in FMCGs

market. But some companies have achieved it, while some others are trying to

achieve it. In order to achieve it, there is a higher need for a detailed analysis on

the level of brand loyalty, factors influencing brand loyalty, the various type of

brand loyalty and the linkage between them. The companies who have done all the

above said works continuously, they achieve the brand loyalty but others‟ are

struggling. Hence the researcher has made an attempt to focus this problem to

exhibit the brand loyalty behaviour among the customers in FMCGs.

Related Reviews

Bloemer and Kasper (1995)10 stated that brand loyalty implies a deep-

seated commitment to brands and there is a sharp distinction between repeat

purchases and actual brand loyalty. They asserted that a repeat purchase behaviour

10. Bloemer, J.M.M., and Kasper, J.D.P., (1995), “The Complex Relationship
between Consumer Satisfaction and Brand Loyalty”, Journal of Economic
Psychology, 16(2), pp.66-71.
 33

is the actual re-buying of a brand whereas loyalt includes antecedents or a reason

or fact occurring before the behaviour.

Fred and Paul (2000)11 found that the power distance is the willingness to

accept that those power are entitled to it and those without power ought to accept

the way things are and just go along. This is an Asian Cultural Tendency. Big

Market share brands are the Kings of their brand world and consumer from

cultures with high power distance tend to believe in them implicity.

Kurt et al., (2008)12 found that the customers‟ risk aversion is significantly

related to the two forms of loyalty. When brand affect and brand trust are

introduced into the model, the previously highly significant relationship between

domain-specific risk aversion and attitudinal loyalty becomes in significant and

the risk aversion repurchase relationship becomes much weaker, while risk

aversion strongly influences brand trust and brand affect.

11. Fred Palumbo and Paul Herbeg (2000), “The multicultural context of brand
loyalty”, European Journal of Innovation Management, 3(3), pp.116-124.

12. Kurt-Mat-zler, Sonja Grabner and Sunja Ridmon (2008), Risk aversion and
brand loyalty: the medicating role of brand affect”, Journal of Product and
Brand Management, 17(3), pp.154-162.
 34

Yang et al., (2005)13 analysed the brand choice behaviour with the help of

market presence, brand diversity, purchasing frequency, and foreign various

domestic preference. The only aspect of brand choice behaviour seemingly to give

practical implication to foreign companies that have already been operating are

planning to enter Chinese market is the frequency of differential of foreign versus

domestic brand between the older and the younger consumers in China.

Malcom Wright (2002)14 showed that the retail payment instruments have a

significant positive impact on the purchase loyalty on FMCG goods. The use of

payment methods by shoppers is very stable across different retail categories,

suggesting that retail payment methods one a mass market, rather than one that is

segmented by retail category.

Ica Rojsek (2001)15 revealed that glovence consumers are more loyal to

local than foreign products and are thus similar to other Eastern European

consumers. There are no significant differences between younger and older

13. Yang, Z., Zhou, N. and Chen, J., (2005), “Brand choice of older Chinese
consumers”, Journal of International Consumer Marketing, 17(4), pp.65-
81.

14. Malcom Wright (2002), Patterns of purchase loyalty for retail payment
methods, International Journal of Bank Marketing, 20(7), pp.311-316.

15. Ica Rojsek, (2001), “A comparison of purchasing and consumption behaivour

of Slovenian and other Eastern European consumers”, International
Marketing Review, 18(5), pp.509-520.
 35

consumers in the degree of loyalty. The brand is perceived as a main indicator of

the quality of the product. Gloreve consumers of FMCG are less price sensitive

than other Eastern European Consumers, although price elasticity would need

closer examination.

Radhika (2002)16 found the linkage between the shopping habits and brand

loyalty in FMCGs market. The changing composition of consideration set, and the

changing contexts against which the decisions are being made, could keep the

relative position of the brands within the set, making a subtle but proposed impact

on the final branded loyalty.

Shelty (2010)17 found that brand loyalty is extent in younger age groups as

well as older generations, although their intensity of loyalty varies. The brand

loyalty in shampoo market is moderate. The brand loyalty is positively correlated

with the affective commitment/emotional attachment for the brand. The brand

loyalty for this product reflects that loyal behaviour is purely based on choice and

preference for the brand, rather than being based on high switching costs or

unavailability of brand choice.

16. Radhika Chadha (2002), “Of shopping habits and brand loyalty”, Business
Line, Thursday, October 10th, p.8.

17. Vijetha, S. Shelty (2010), “Existence of brand loyalty – A Myth or A

Reality?”, Indian Journal of Marketing, April, pp.50-54.
 36

Jose and Hans (2001)18 identified the linkage between customer satisfaction

and brand loyalty. The manifest satisfaction is positively related to brand loyalty.

It is stronger than the positive relation between latest satisfaction and brand

loyalty. The manifest satisfaction is the outcome of explicit evaluation whereas the

latent is the outcome of implicit evaluation.

Elif et al., (2005)19 found that the important reasons for women‟s brand

loyalty in cosmetics products are the product-skin matching, needs satisfaction

capacity of the product, reasonable pricing, popularity of the products, brand name

and wide availability of the product.

Nadin et al., (2009)20 to indicated that brand affect, brand quality and

customer loyalty are significantly and positively related to customers brand

18. Jose, M., Blovemer, and Hans P.P.Kasper (2001), “The impact of satisfaction
on brand loyalty: Using on classifying satisfaction and brand loyalty”,
Journal of Consumer Satisfaction, Dissatisfaction and Complaining
Behaviour, 14(1), pp.106-117.

19. Elif Akagun Engin, H.Ozdenur and Nurethin, P., (2005), “Brand loyalty in the
cosmetics industry: A field study on Turkish women‟s brand loyalty among
cosmetics products”, Journal of Business and Economics Research, 7(5),
pp.5-16.

20. Nadin, J., N.Parvez, D.Bhaftercharjee and K.H.B.Ahamed (2009), “The

relationship between brand affect, brand quality, and customers‟ brand
extension attitude: Exploring the moderating role of customer loyalty”, The
Cambdian Management Journal, 1(1), pp.20-34.
 37

extension attitude. The mediator role of brand loyalty is inevitable in between

brand trust, affect, quality and customers‟ brand extension culture.

Reast (2005)21 stated that when the extended brand is launched the expected

loyalty factor will drive trail if the consumer is loyal to the parent brand there is a

good chance that they will try the extended brand.

Fandos and Flavian (2006)22 mentioned that it would seem reasonable to

suppose that the level of quality associated with intrinsic attributes may rise in the

process of consumption, thereby increasing the consumer‟s loyalty and possible

repeat buying intention.

Chaudhri and Holbrook (2001)23 found that the brand attitude can be

measured via brand trust and brand affect. Brand attitude is the highest level of

brand association and frequently forms the basis of consumer behaviour.

21. Reast, J.D. (2005), “Brand trust and brand extension acceptance: the
relationship”, Journal of product and brand management, 14(1), pp.4-13.

22. Fandos, and Flavian (2006), “Intrinsic and extrinsic quality attributes, loyalty
and buying intention: an analysis for a PDO product”, British Food Journal,
108(8), pp.117-126.

23. Chaudhri, A. and Holbrook, M.B., (2001), “The chain of effects from brand
trust and band affect to brand preference: the role of brand loyalty”, Journal
of Marketing, 65(2), pp.81-93.
 38

Martinez et al., (2004)24 revealed that perceived brand quality before an

extention influences consumers attitude towards the extensions. Additionally,

when they are moderated they become of more importance.

Ali et al., (2010)25 found that the innovation has a significant positive

correlation and impact on customer satisfaction among the mobile phone users.

But the innovation has no significant correlation and impact on the brand loyalty.

Javadein et al., (2008)26 confirmed that the relation between loyalty and

satisfaction is moderated by two factor commitment and trust as consequences of

service quality and customer satisfaction.

Yu and Hong (2002)27 showed that genders, participant‟s perception of

product performance and their performance were significantly related to the

product satisfaction.

24. Mortinz, Polo and Cherrantony (2004), “Effect of brand extension strategies
on brand image”, International Marketing Review, 25(1), pp.66-79.

25. Ali Raza Nemati, Khurnam Khan and Miozram Ittikkar (2010), “Impact of
innovation in customer satisfaction and brand loyalty: A study of mobile
phone users in Pakistan”, European Journal of Social Sciences, 16(2), pp.299-
306.

26. Java Beans Khanlari Estiri (2008), “Customer loyalty in the sport services
industry : the role of service quality; customer satisfaction, commitment and
trust”, Journal of Management, 5(2), pp.1303-1342.

27. Yu, and Hong (2002), “Antecedents and consequences of consumer

satisfaction and dissatisfaction with the performance of apparel products at
 39

Goode et al., (2005)28 mentioned that the customer satisfaction plays a key

moderating role for the relationship between price increases and repurchase

intentions.

Chu and Desai (2001)29 revealed that nature and degree of customer based

brand equity is noticed through the strength and uniqueness of brand associations

stored in memory.

Goi and Leh (2011)30 identified the dimensions of customer-based trend

equity for Malaysian brands with the help of factor analysis. They identified that

these are perceived quality, brand association, brand loyalty and brand awareness.

The brand awareness, brand associations, perceived quality and brand loyalty has

a positive impact on brand equity.

purchase and after consumption: a comparison of male and female South

Korean Consumers”, International Journal of Consumer Studies, 26(1),
pp.117-124.

28. Goode, Davies, Muntinho and Jamal, (2005), “Determining customer

satisfaction from mobile phones”, Journal of Marketing Management,
21(2), pp.755-778.

29. Chu, H. and Desai, Z., (2001), “Channel co-ordination mechanisms for
customer satisfaction”, Management Sciences Journal, 14(4), pp.343-359.

30. Goi Chai Lee and Fayrene Chieng Yew Lea (2010), “Dimensions of Customer
based equity: A study on Malaysian brands”, Journal of Marketing
Research and case studies, 8(2), pp.1-10.
 40

Rodoula (2005)31 investigated the effect of perceived product quality on

product involvement, consumer‟s overall satisfaction and purchase intentions. The

findings confirmed the role of product quality on consumer behaviour, and lead to

the identification of the effects that different levels of perceived quality have on

involvement overall satisfaction and purchase intentions.

Yang and Peterson (2004)32 examined the moderating effects of switching

costs of customer loyalty though both satisfaction and perceived value measures.

They found that the moderating effects of switching costs. On the association of

customer loyalty and customer satisfaction and perceived value are significant

only when the level of customer satisfaction or perceived value is above average.

Arvind Sabay and Sharma (2010)33 found that the younger age group loves

their brands and is more passionate about their while the older group develops

strong brand relationship. But is relatively more rational about their relationship

31. Rodoula Tsiotsun, (2005), “Perceived quality levels and their relation to
involvement, satisfaction and purchase intentions”, Marketing Bulletin,
16(4), pp.1 to 10.

32. Zhilin Yang and Robin T. Peterson, (2004), “Customer perceived value
satisfaction, and loyalty: The role of switching costs”, Psychology and
Marketing, 21(10), pp.799-822.

33. Arvind Sabay and Nivedita Sharma (2010), “Brand Relationship and
Switching behaviour for highly used products in young customers”, Vikalpa,
35(1), January-March, 15-30.
 41

with the brands profitable to various factors like maternity, financial constraints,

independence and increased responsibility.

Simon and Walker (2001)34 classified the customers into loyals, habituals,

variety seekers and switchers based on brand commitment and brand support in

grocery brands. The risks associated with moving out of a brand and into an

alternative are key to developing brands, the customers of which are loyals in any

ending sense.

Hsin, et al., (2009)35 identified that the relations among the brand

awareness, perceived quality and brand loyalty for purchase intention are having a

significant and positive effect. The perceived quality has a positive effect on brand

loyalty whereas perceived quality will mediate the effects between brand

awareness and purchase intention. The trend loyalty will mediate the effects

between brand awareness and purchase intention.

34. Simm Knox and David Walker (2001), “Measuring and Managing brand
loyalty”, Journal of Strategic Marketing, 9(1), pp.111-128.J

35. Hsin Kuang Chi, H.R.Y., Shih and Y.T.Yang (2009), “The impact of brand
awareness on consumer purchase intention: the mediating effect of perceived
quality and brand loyalty”, The Journal of International Management
Studies, (1), February, pp.135-144.
 42

Wang and Sidek (2008)36 measured the brand loyalty with the help of its

factors namely product quality, style, brand name, store environment, service

quality, promotion and price. There is a significant positive relationship between

these factors with sports wear brand loyalty. They noted that the Malaysians prefer

brand name, product quality, price promotion, store environment and service

quality as relevant factors attributable to brand loyalty.

To and Leung (2001)37mentioned that the impact of sales people consumer

relationship will generally result in long term orientation of consumers towards the

store or brand. Trust in sales people appears to relate to overall perception of the

stores service quality, and result in the consumer being totally satisfied with the

stores in the end. Additionally, personalization significantly influence consumers.

Experience and evaluation of service, and inturn, affects the brand loyalty of

consumers.

36. Wong Food Yee and Yahyah Sidex (2008), “Influence of brand loyalty on
consumer sports wear”, The Journal of Economics and Management , 2(2),
pp.221-236.

37. C.K.M. and Leung, C.S., (2001), “Service-enhanced manufacturing; study of

perceived service quality of apparel manufacturers”, Journal of Fashion
Marketing and Management, 5(1), PP.313-323.
 43

Allen et al., (2011)38 identified that customers‟ loyalty to retail brand(s) has

greater influence on their purchase behaviour than manufacturers brand(s). They

also revealed that attitude towards store brands directly influences one‟s

propensity to switch to retail brands, and moderates relationships between loyalty

to manufacturer/retail brands and ones propensity to switch to retail brand(s).

Keller (2003)39 discussed that retailers are often quite successful in

promoting their own store brands for the purpose of increasing the loyalty of their

customers and to generate higher margins and profits.

Mininni (2007)40 indicated that retail brands are being offered as part of the

total retail shopping experience environments. He further noted that the added

bonus of establishing unique positioning and increased profitability has whetted

retailers appetite for more private Label brand development.

38. Allen Broyles, Robert, H. Ross, “Donnap Davis and T.Leingfitul (2011),
“Customer‟s Comparative loyalty to retail and manufacture brand”, Journal
of Product and Brand Management, 20 (3), pp.205-215.

39. Keller, K.L., (2003), Strategic brand management: Building, Measuring

and Managing Brand Equity, Prentice-Hall, Upper-Saddle River, RJ.

40. Mininni, T., (2007), “Packaging that works for the Planet”, Brand Week,
48(1), pp.1-20.
 44

Davis (2000)41 mentioned that through development and implementation of

brand management strategies some forms have the potential to steadily increase

their sales by 30-50 per cent.

Hanf and Belaya (2008)42 mentioned that retailers began to recognize that

people are loyal to brands, because brands add value to their purchase. Such a

unique personality added to the image of the branded product. This personality

could also be reflected in the retailer itself, and in the retailers‟ branded product(s).

Hu and Chuang (2009)43 commented that many retailers and wholesalers

have their own brands, as well as carrying manufacturer brands because, at least in

part, the manufacturing firm typically provides the advertising. This makes it

unnecessary for the retailer to spend funds to market their own branded products,

in that the manufacturers‟ advertising will draw customers into the retailers‟

store(s).

41. Davis, S.M., (2000), “Does brand asset management strategy matter?”, Brand
asset management:Driving profitable growth through your brands, Jossey-
Bass, San Francisco, CA, p.3.

42. Hanf, J.H. and Belaya, V. (2008), “Retail internationalization and its impact
on the Russian Agri-food business”, Journal for East European
Management Studies, 13 (3), pp.239-252.

43. Hu, F. and Chuang, C., (2009), “How can different trend strategies lead to
retailers success? Comparing manufacturers brand for coca-cola and private
brand for Costco”, Journal of Global Business Issues, 3 (1), pp.129-135.
 45

Choi and Coughlan (2006)44 noted that store brand products in 77 of 250

super market product categories have greater market share than the strongest

manufacturer brand.

Anisimora (2007)45 cited that the positive ramifications of customer loyalty

toward a brand by stating that such loyalty reduces a firm‟s cost of serving

customers, reduce consumers‟ price sensitivity, and increases their favourable

word of mouth, all of which increase a firms financial performance.

Paswan et al., (2007)46 revealed that consumers who do manage to get their

preferred service brand tend to be satisfied with the features of the obtained brand

and exhibit higher levels of brand loyalty towards that brand. In comparison,

consumers who end up with a service brand that is not their first choice seen to

have lower levels of satisfaction with and loyalty towards the obtained brand.

44. Choi, S.C. and Coughlan, A.T., (2006), “Retail trend positioning: quality
versus feature differentiation from the major brand”, Journal of Retailing, 82
(2), pp.79-93.
45. Anisimora, T.A., (2007), “The effects of corporate brand attributes on
attitudinal and behavioural consumer loyalty”, The Journal of Consumer
Marketing, 24 (7), pp.395-405.

46. Audhesh K. Paswan, Nancy Spears and Goapala Ganesh (2007), “The effects
of obtaining one‟s preferred service brand on consumer satisfaction and brand
loyalty”, Journal of services marketing, 21(2), pp.75-87.
 46

Hong et al., (2009)47 revealed that the perceived quality was found to

positively influence satisfaction and brand loyalty in both Korean-chinese context.

The power of satisfaction significantly lies in its ability to reinforce brand loyalty

formation atleast in a Korean-Chinese context.

Yong (2008)48 identified that Chinese single woman with fashion self

concept have consistently adrouse attitude to conservative calculator, calculating

consumer and emotionally loyal consumer. Single women with consumption

behaviour of feeling expression disdain calculating consumer, but support

emotionally loyal consumer. Married womens with consumption behaviour of

achievement expression are both calculating consumers and emotionally loyal

consumer.

Feffrey (2008)49 showed no significant difference in brand loyalty and

word-of-mouth between African Americans and non-African-Americans and no

significant preference for black owned goods and services. Additionally, it was

47. HongYoul Ha, Sunder Janda and Sang-Kyu Park (2009), “Role of satisfaction
in an integrative model of brand loyalty”, International Marketing Review,
26 (2), pp.198-220.
48. Yong Tae Bang (2008), “How female consumers think of themselves, make
consumption and show loyalty to a brand”, International Review of Business
Research Papers, 4 (3), June, pp.56-63.

49. Feffrey Stevan Podoben (2008), “The African American consumer revisited:
brand loyalty, word-of-mouth and the effects of the black experience”,
Journal of Consumer Marketing, 25 (4), pp.211-222.
 47

found that while a majority of African American consumers believe the most

American firms have ties to slavery, this does not act as a factor in the purchase

decision.

Eventhough, there are so many studies related to the brand loyalty, its

linkage with its antecedents, and consequences of brand loyalty related to

consumer durable and non-durable goods, there is no exclusive study related to

FMCGs especially in Indian context. Hence the present study has made an

attempt to fill up the research gap with the help of proposed research model.

The proposed research model is given below.

Antecedents of
Brand Loyalty Brand specific
Behaviour loyalty
Profile of the
Customers

Propensity to be
Loyal
Personality of
the Customers Level of Brand
Loyalty on
FMCGs Retail Brand
Loyalty

Brand
Personality of
the Customers Manufacturers
Brand Loyalty
 48

Based on the proposed research model, the objectives of the study are

drawn.

OBJECTIVES OF THE STUDY

The objectives of the present study is confined to

i) to exhibit the profile of the customers;

ii) to measure the brand personality among the customers;

iii) to analyse the various antecedents of brand loyalty behaviour among the

customers;

iv) to examine the level of brand loyalty factor on the level of various brand

loyalty among the customers; and

v) to summarise the findings of the study, conclusions and policy

implications.

PRODUCT CATEGORY CHOICE

 49

The FMCGs are varying from customer non durables to consumer durables.

Since the present study has made an attempt to explore the brand loyalty

behaviour in the FMCGs, a special care was taken to limit the number of products

for the study. The choice of the product was made by keeping the following in

minds.

1. The category of product should be an established one where customers

tastes and preferences are established and not evolving;

2. The categories should have enough players so that the customer has

options;

3. Switching costs should not be two high so that loyalty is not forced upon

the customers;

4. The consumable category should be a small purchase cycle and high

purchase frequency.

Hence, the product undivided into the present study are toiletries,

cosmetics, teeth cleaning products, shaving products, soft drinks, health drinks

chocolates, and fabric wash. The consumer durables are excluded from the

analysis and the cigarettes are also excluded because the usage may be seen

among the male customers.

 50

RESEARCH DESIGN

Research design is the blue print of the various methods for conducting the

research projects. It includes the procedures for obtaining the information needed,

the way in which they are processed and the method of presentation of the result to

solve the research problems. Eventhough, the research designs are too many, the

present study followed the „descriptive‟ research design.

Since the present study has made an attempt to explain the level of brand

loyalty behaviour among the customers in FMCGs market and also its causes

antecedents and types of loyalty, it is descriptive in nature. Since, the study also

focuses on the cause and effect relationship between the various determinants of

brand loyalty behaviour and the level of brand loyalty in FMCG market, it is also

diagnostic in nature. Hence, the applied research design of the study is descriptive

and diagnostic research.

Population of the Madurai District

The Madurai district is purposively selected for the present study. It is

divided into seven important taluks namely Madurai North, Madurai South, Melur,

Vadipatti, Usilampatti, Paraiyur and Thirumangalam. The number of male and

female population in the seven Taluks are given in Table 1.1.

 51

TABLE 1.1

Population in Madurai District

Number of population
Sl.No. Name of the taluk Total
Male Female

1. Madurai North 175653 170899 346552

2. Madurai South 605986 590820 1196806

3. Melur 125292 125811 251103

4. Vadipatti 105603 104420 210023

5. Usilampatti 92054 86157 178211

6. Paraiyur 97923 97308 195231

7. Thirumangalam 97923 97308 195231

Total 1295124 1267155 2562279

Source: Madurai 2004, Department of Economics and Statistics, Statistical

Handbook, p.27.

The total population in this district is 25.62 lakhs out of which 12.95 lakhs

are male whereas 12.67 are female population. The higher population of 11.96

lakh is seen in the Madurai South Taluk followed by 3.47 lakhs in Madurai North

and 2.5 lakhs in Melur Taluk. The higher number male and female population is

also identified in the Madurai South Taluk.

Sample Size of the Study

 52

In order to have an equal representation from each taluk of the district, the

sample size derived from each taluk is arbitrarily determined as 200 which

consists of 100 male and 100 female population. The sample are were purposively

selected by the researcher. The distribution of sample in each taluk and the fully

responded sample size in the respective taluk is given in Table 1.2.

TABLE 1.2

Sample Size of the Study

Number of population
Sl.No. Name of the taluk Total
Male Female

1. Madurai North 53 36 89

2. Madurai South 64 42 106

3. Melur 42 32 74

4. Vadipatti 39 33 72

5. Usilampatti 32 29 61

6. Paraiyur 34 32 66

7. Thirumangalam 42 37 79

Total 306 241 547

Figures in parentheses are the responded samples.

The total number of sample drawn from each taluk of Madurai district is

200 which consists of 100 male and 100 female population. In total, the

responded samples are 547 which shows the response rate of 39.07 per cent. The
 53

response rate among the male and female population is 43.71 and 34.42 per cent to

its total 700 respectively. The higher response rate is identified among the male

and female population at Madurai South which indicates 64.00 and 42.00 per cent

to the total of male and female respondents. The lesser response rate is identified

in Usilampatti Taluk which consists of 32 and 29 per cent to the total male and

female respectively.

COLLECTION OF DATA

The required data for the research work have been collected with the help

of structured interview schedule. The schedule consists of four important parts.

The first part covers the background of the customers whereas the second part

includes the personality traits and brand personality among the customers. The

third part of the schedule includes the various antecedents of brand loyalty

behaviour among the customers whereas the fourth part covers the various

components of brand loyalty behaviour and various types of brand loyalty

behaviour among the customers. The relevant variables were drawn from the

review of previous studies and also the view of experts in the marketing of

FMCGs.

A pre-test was conducted among 50 male 50 female customers at Madurai

city. Based on the pre-test, certain modifications, additions and deletions were
 54

carried out. The final draft of the schedule was prepared to collect the primary

data from the customers.

 55

FRAMEWORK OF ANALYSIS

The statistical analysis has been selected and used to process the collected

data according to the requirements of the study. The analysis is selected according

to the scale of data and the objectives of the study. The included statistical analysis

and its application are presented below:

1. T-test

The „t‟ test is one of parametric tests to analyse the significant difference

among the two group of samples. It is applied when the criterion variable is in

interval scale. The „t‟ statistics are calculated by

X1 -X 2
t 
(n 1 - 1)   (n - 1) 
2 2
1 1

s1 2 s2
x
n1  n 2
-2 n1 n 2

which is compared with the degree of freedom of (n1 + n2 – 2).

Whereas t = „t‟ statistics

X1 = mean of the first group of sample

X 2 = mean of the second group of sample

n1 = number of samples in the first group

n2 = number of samples in the second group


2
s1
= variance in the first sample
 56


2
s2
= variance in the second sample

The „t‟ test has been applied to test the significant difference among the

rural, semi-urban and urban customers regarding the various aspects related to

customers‟ personality, trend personality, brand loyalty, antecedents of brand

loyalty and types of brand loyalty by paired comparison.

2. One way Analysis of Variance (ANOVA)

The one way analysis of variance is applied when the criterion variable is in

interval scale and the number of group of samples included for the study is more

that two. The „F‟ statistics is calculated by

Trss/dF Greater va riance

F  
Ess/dF Small variance

Compared with the F(K-1;N-k) degree of freedom

Whereas F = „F‟ statistics

N = Number of sample size

K = Number of groups included

Trss/df = Variance between groups and

Ess/df = Variance within groups.

The one way ANOVA has been applied to examine the significant

difference among the three of customers regarding various aspects related to the

brand loyalty behaviour in FMCG market.

 57

3. Exploratory Factors Analysis (EFA)

The exploratory factor analysis is used when the researcher wants to narrate

the variable into handsome factors and also find the relationship between the

variables and narrated factors. It is also called as narration analysis. Whenever the

variables related to a particular event are unmanageable or plenty and also in

interval scale, the factor analysis has to be executed to narrate these variables into

factors. Before applying the factor analysis, the validity of data for factor analysis

have to executed with the help of Kaiser-mayer-ohlin (KMO) measure of sampling

adequacy and Bartletts test of shpericity. The acceptable KMO measure of

sampling adequacy is 0.5, whereas the acceptable level of significance of chi-

square value is upto 0.05 per cent level. In the present study, the factor analysis

has been executed to identify the important factors in brand loyalty and

antecedents brand loyalty.

4. Confirmatory Factor Analysis (CFA)

The Confirmatory Factor Analysis have been executed with the help of

LISREL 8 software package. It is applied to test the reliability and validity of the

variables included in each construct. In the present study, the CFA has been
 58

applied to test the reliability and validity of variables in all concepts generated in

the present study related to the trend loyalty behaviour.

5. Discriminate Analysis (Two group model)

The discriminate analysis is used when the dependent variable is in nominal

scale and the independent variable are in interval scale. It is used to identify the

important discriminate variables among the two group formulated in the study.

The unstandardized common discriminate function was estimated by

Z = a + b1x1 + b2x2 + b3x3 + b4x4 +……+ baxa + bnxn

Whereas

Z = Discriminant criterion

X1, X2,…Xn = Discriminant variables

b1,b2…bn = Discriminant coefficients

The Wilks Lambda was calculated as a multi-variant measure of group

difference over discriminating variables. The relative discriminating power of the

variables was calculated by

I j  K j (X j1 -X j2 )

Whereas

Ij = the important value of jth variable

Kj = unstandardized discriminant co-efficient for the jth variable

 59

Xjk = mean of the jth variable for jth group

The relative importance of a variable Rj is given by

Ij
R j
 n

 Ij
j1

In the present study, the two group discriminant analysis has been

administered to identify the important discriminant brand loyalty factors among

the rural vs urban customers regarding various aspects related to brand loyalty

behaviour.

6. Multiple Regression Analysis

The multiple regression analysis is applied to analyse the impact, of

independent variables on dependent variable when both the variables are in

interval scale. The linear regression model is fitted by

Y = a + b1x1 + b2x2 +……….. + bnxn + e

Whereas Y = Dependent variables

X1,X2….Xn = Independent variables

b1,b2….bn = Regression coefficient of independent variables

a = intercept and

e = error term
 60

In the present study, the multiple regression analysis has been administered

to find out the impact of personality, trend personality, antecedents of brand

loyalty and components of brand loyalty on the level of brand loyalty among the

customers.

LIMITATION OF THE STUDY

The present study is subjected to the following limitations.

1) No scientific sampling procedure has been applied to fix the sample size;

2) For equal representation from each taluk of Madurai District, 100 each

male and female customers were purposively selected for the study.

3) Eventhough, the products related to FMCGs are too many, the present

study confines its scope to toiletries, cosmetics, teeth cleaning products,

shaving products, soft drinks, health drinks, chocolates and fabric wash.

4) The variables related to personality, trend personality, antecedents of brand

loyalty, level of brand loyalty and type of brand loyalty were drawn from

the review of previous studies.

5) The data collected from the customers are subjected with the limitation of

memory bias, and

 61

6) The linear relationship between dependent and independent variables was

assumed.
 62

CHAPTERISATION

The present study is classified into six chapters for neat and clear

presentation.

The first chapter explains the introduction of the study, need for the study,

statement of the problem, review of literature, research gap, proposed research

model, objectives methodology, limitations and chapterisation.

The second chapter covers the definitions, meanings, measurement and

variables used to measure various concepts used in the research work.

The third chapter exhibits the background of the customer, consumption

behaviour in FMCGs market, personality of the customers and their brand

personality.

The fourth chapter discusses the various antecedents of brand loyalty

behaviour among the customers, association between the profile of customers and

their view on various antecedents and the discriminant antecedents among the

rural, semi-urban and urban customers.

The fifth chapter explain the measurement of the level of brand loyalty,

various types of brand loyalty, linkage between the personality traits, brand

personality, antecedents of brand loyalty behaviour and the level of brand loyalty

among the various group of customers.

 63

The six chapter covers the summary of findings, conclusion, managerial

implications and scope for future study.

CHAPTER-II

CONCEPTUAL FRAMEWORK OF THE STUDY

In order to fulfill the objectives of the study, various concepts have been

included in the study. These are personality, brand personality, antecedents of

loyalty behaviour, components of loyalty and various types of brand loyalty. It is

imperative to explain the meaning, definitions, measurements and variables

included to measure the concept before discussing the concepts. In the present

chapter, the conceptual framework of the study have been presented in a detailed

manner.

Personality Trait of the Consumers

Chen and Chang (1989)50 described the personality as „a real person‟.

Personality traits are generated by nature and are stable (Sternberg, 2000)51.

Catrell (1957)52 divided personality traits into surface trait and source trait. Mc

1. Chen, Zhong Geng and Yuxin Chang (1989), Psychology of Personality,

IE, Wu-Nan Book Inc., Taipei.
2. Stenberg, R.J., (2000), Pathways to Psychology, 2E, Harcourt, A Division
of Thomson Learning, Inc.
3. Cattell, R.B., (1957), Personality and Motivation: Structure and
Measurement, World Book, New York.