Characteristics of Brand Loyalty in Apparel Industry

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Characteristics of Brand Loyalty: A Study on Apparel Industry
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Mediterranean Journal of Basic and Applied Sciences (MJBAS)
Volume 2, Issue 2, Pages 64-91, April-June 2018
Characteristics of Brand Loyalty: A Study on Apparel Industry

T.Saif1, M.Ahmed 2, S.Shareef 3 and R.Khalid4
1,2,3,4
Students at University of Central Punjab Lahore.
Article Received: 30 January 2018 Article Accepted: 27 March 2018 Article Published: 05 June 2018
ABSTRACT
Competition, increased consumer spending and more information exposure has made brand loyalty a key of success in today’s business world .In this
research, the impact of variables including perceived service/product quality, brand association and sales promotions on brand loyalty is
investigated. Sales promotions are the independent variable, perceived service/ product quality and brand association are mediating variables and
brand loyalty is the dependent variable. A survey of 200 respondents was conducted to study the relationship between variables and SPSS, Amos,
confirmatory factor analysis and path analysis was used to get the results.
The results show that monetary promotions have positive significant impact on brand loyalty .Brand association and perceived service/product
quality mediates the relationship between monetary sales promotion and Brand Loyalty. This is due to the fact that monetary promotions impact
brand loyalty positively only when customers are satisfied with the product and have strong brand associations. However, non-monetary promotions
have significant impact only at the later stage of loyalty. Moreover, the result show that high perceived service/product quality results in strong brand
associations that further lead to brand loyalty.
The study has great managerial implications as managers can use these results to develop the pricing and promotional strategies in order to attract and
retain loyal customer base.
Keywords: Brand Loyalty, Perceived value, Sales Promotion.
1. INTRODUCTION
The introduction of the product in the new or existing markets requires extensive research and development as well
as lots of advertising spending. Once a new product is inducted into the market, another set of determinants are
required to operate profitably in the markets. This is where the concept of customer-brand loyalty becomes evident.
Once a product is purchased by the customer, it is evaluated on certain dimensions, which are perceived
product/service quality, brand Image and associations, customer satisfaction and perceived value. The consumer’s
post purchase intentions and purchase behavior are determined after the evaluation of these attributes and the
concept of brand loyalty develops.
Brand loyalty means that customers are willing to pay high prices for a certain brand in the same product group and
also recommend that brand to others. (Gıddens, N. 2002).Brand Loyalty can also be defined as “the likelihood of
repeat purchase increases, that lead to formation of brand loyalty. Moreover, customers may prefer and buy a brand
due to additional value created by brand signal.” (Erdem T. & Swait J., 1998).
The chain of competition has been triggered between the brands due to the growth of embedded media and
increased customer spending. The growth of embedded media has made consumers more exposed to the
information and hence have contributed to the awareness of consumers. This has resulted in increase in the
competition between brands and they have to differentiate themselves in order to capture the market share. Brands
can protect their market share by creating brand loyalty. The firms with loyal customer base can protect their
market share by repeat purchases of customers and can lead to long-term profitability of firm. Therefore, several
studies have been conducted in order to determine the variables that impact brand loyalty.
64 | P a g e Website: www.mjbas.com
The study attempts to determine the characteristics of brand loyalty and study the relationships between different
variables that lead to brand loyalty i.e. perceived product/ service quality, brand association and sales promotions in
Apparel industry. The research has contributed to the literature by explaining the link between variables that create
Brand Loyalty. Moreover, impact of sales promotion is studied in detail that had conflicting results in existing
literature.
1.1 Statement of Problem

This study has investigated the impact of sales promotion on brand Loyalty. There was a conflict in existing
literature regarding the impact of sales promotion on Brand Loyalty. In order to investigate it in detail, the study has
divided the sales promotion in monetary and non-monetary sales promotion. Moreover, other variables are also
studied that play a mediating role in this relationship i.e. perceived product/service quality and Brand Associations.
1.2 Contribution
Brand loyalty is an important concept and a lot of research has been conducted in order to determine the factors that
lead to brand loyalty and relationship between the variables is studied in order to understand the customer’s buying
behavior. (Kuo et al., 2009; Ercis et al., 2012; Raju et al., 2009)
This research has contributed to literature by studying the impact of monetary and non-monetary sales promotion
on brand loyalty that was not studied in detail before. Moreover, there was confusion about the results as results of
different studies had conflicting conclusions.
The impact of promotional activities on brand loyalty is not properly studied in existing literature as limited
literature is available on this topic. Moreover, there is a conflict in existing literature about the impact of sales
promotions on the brand loyalty. Some studies support the results that promotional activities have negative effect
on brand loyalty because reduction in reference prices is considered as a bad signal for the product quality (Agarwal
and Teas, 2002; DelVecchio et al., 2006; Yoo et al., 2000).
On the other hand, some are of the view that promotional activities create positive brand associations and can lead
to brand loyalty (Chu and keh, 2006; Palazon-vidal and Delgado-Ballester, 2005) .As, there is a conflict in existing
literature as they show contradictory results, there was a need to further investigate the topic and find a reasonable
solution.
Moreover, the existing research is conducted in foreign countries and no analysis is available on Pakistan. Pakistani
consumers are considered as more price sensitive as well as brand conscious so this research will study the impact
of promotional activities on brand loyalty to clear the confusion and to study the behavior of Pakistani customers.
This research would be beneficial for managers and leading companies who are trying to acquire and retain loyal
customer base.
information and hence have contributed to the awareness of consumers. This has resulted in increase in competition
between brands and they have to differentiate their brands on the basis of service/product quality and strong brand
image in order to capture the market share. Moreover, their objective is to create customer satisfaction that can
result in brand loyalty i.e. more repeat purchases and more sales of product and services. Moreover, as it is said that
it is five times more expensive to find a new customer than to retain a customer. So the companies and managers are
trying to create a pool of brand loyal customers and retain them for long-term profitability.
Due to competition, products availability in the market has been improved and it has become very important for
companies in Pakistan to focus on building strong brand image and developing brand loyalty that can retain loyal
customers and lead to sustainable and long-term profitable relationship. Moreover, as the results of this research
have shown that brand image, customer satisfaction and product/ service quality has a positive and significant on
brand loyalty and repeat purchase behavior, so these dimensions should be dealt carefully in order to retain loyal
customers. Moreover, this research will contribute to the literature by explaining the link between variables that
create customer satisfaction that further lead to brand loyalty and repetitive purchase behavior.
This research will provide great insight to the managers because it has deeply investigated the impact of sales
promotions in Pakistan. Little literature was available on this topic and this research has contributed to the literature
by investigating the impact in-depth. The results showed that monetary sales promotions can have negative impact
on the perceived quality and can result in brand switching. This is due to the fact that reference price is considered
as a quality signal by the customers. On the other hand, non-monetary sales promotions can lead to strong brand
associations and help in building strong brand image. These results give insight to the manager that what kind of
sales promotions should be used to increase sales while maintaining the brand credibility.
1.3 Research Objectives

The objectives of the research are:
• To determine the ability of sales promotion to alter the purchase behavior
• To study the impact of monetary and non-monetary promotion on brand loyalty
• To study the role of brand association and perceived value in creation of brand loyalty
2. LITERATURE REVIEW
between brands and they have to differentiate themselves in order to capture the market share. Brands can protect
their market share by creating brand loyalty. The firms with loyal customer base can protect their market share by
repeat purchases of customers and can lead to long-term profitability of firm. Therefore, several studies have been
conducted in order to determine the variables that impact brand loyalty.
2.1 Brand Loyalty

“Brand Loyalty is the likelihood of repeat purchase increases, leading to the formation of brand loyalty; consumers
may buy a brand due to the additional expected utility (value) created by a brand signal”. (Erdem T. & Swait J.,
1998).
Many studies have been done to determine the characteristics of brand loyalty and in most of the studies conducted,
Brand loyalty is measured through repeat purchase behavior, word of mouth and recommendation. Kuo et al.
(2009) concluded that although service quality have no direct effect on brand loyalty, it can lead to brand loyalty
and repeat purchase through moderating variables i.e. perceived value and customer satisfaction. Similarly, a study
conducted by Alireza et al. (2011) in the telecom sector of Iran depicted that service quality is the key determinant
of brand loyalty and the perceived value has been identified as a mediating factor between service quality,
corporate image and satisfaction. Moreover, Zehir et al. (2011) conducted a research in Turkey on automobile
sector and concluded that that service quality has a positive impact on brand loyalty through brand trust and
positive brand image. Similarly, in a study by Hameed F. (2013) perceived quality was identified as mediator in the
relationship between brand loyalty and advertising spending.
Some studies have identified customer brand commitment as a key determinant of brand loyalty. Ercis et al., (2012)
has concluded that in addition to customer satisfaction, brand commitment is important determinants of brand
loyalty and they have more impact on brand loyalty as compared to brand satisfaction. Moreover, study by Raju et
al., (2009) has focused on the customer commitment and has concluded that high commitment users evaluate
brands by focusing on the differences while the low commitment users evaluate brands by focusing on the
similarities between the brands. Moreover, the results showed that if a consumer has developed a perception or
commitment towards a brand it cannot be changed. This also shed light on the fact that once a brand loyalty is
formed it can’t be altered and this can lead to long term profitability of a company.
Yousaf et al. (2012) has concluded that a positive relationship exists between brand image, brand credibility and
brand loyalty. Moreover, the research showed that the brand awareness has the most significant impact on brand
loyalty.
The existing literature has used three types of models to determine the characteristics of brand loyalty. Cronin et al.,
1997; Chang and Wildt, 1994 have used the value model which says that brand’s perceived value is the key
determinant for customer satisfaction and repeat consumption. Ennew & Binks, 1999; Hallowell, 1996; Fornell et
al., 1996 have used the satisfaction model where the satisfaction of customer with the prior consumption of brand is
the key determinant of future purchase of a brand. On the other hand, few studies have used indirect models which
say that service quality is the key variable that influence customer-brand loyalty through satisfaction and value.
(Gotlieb et al., 1994; Patterson & Spreng, 1997).
2.2 Service Quality

Service quality has always been considered an important determinant of brand loyalty and repeat purchase
behavior. It can be defined as: “Service Quality is the difference between customers’ expectation and their
perceived performance of a service”. (Parasuraman et al. 1985; 1988).
Many studies have been conducted to explain the relationship with service quality and brand loyalty. Kuo et al.
(2009) has assessed the relationship among variables that lead to brand loyalty in mobile networks’ value-added.
The results showed that the service quality is the key variable that lead to customer satisfaction and enhanced
perceived value. Results indicated that although service quality have no direct effect on brand loyalty, it can lead
to brand loyalty and repeat purchase through moderating variables i.e. perceived value and customer satisfaction.
Similar study was conducted by Alireza et al. (2011) in the telecom sector of Iran and it examined the impact of
satisfaction, quality, image and value on brand loyalty. The results depicted that service quality is the key
determinant of brand loyalty and the perceived value has been identified as a mediating factor between service
quality, corporate image and satisfaction. Moreover, Mohammad & Alhamadani (2011) has used two different
approaches to describe the positive relationship between customer satisfaction and service quality. The Gap
approach focuses on the customer’s perception of the service before and after experiencing the service. On the other
hand, directional approach focuses on the fact that whether the objective of the service was met while experiencing
it. The results depicted that there is a significant positive relationship between customer satisfaction and service
quality and the service quality is the most important determinant of customer satisfaction. Similar relationship was
studied by a study conducted by Rahman M. (2012) and. the results showed that a positive relationship exist
between customer satisfaction, service quality and brand image. Positive brand image and service quality lead to
positive customer’s perception and enhanced customer satisfaction. So, companies should focus on service quality
and brand image in order to retain their customers.
Zehir et al. (2011) conducted a research in Turkey on automobile sector and the objective of this research was to
assess the relationship of service quality and brand communication which leads to brand trust and brand loyalty.
The result depicted that service quality has a positive impact on brand loyalty through brand trust and positive
brand image. Moreover, Krystallis & Chrysochou (2013) has studied different attributes of services and their
impact on brand loyalty by using a model that investigates the effects of service dimensions on consumer’s brand
loyalty. The dimensions studied in these articles are Brand Hearsay, Brand Evidence, Brand attitude and brand
loyalty. The results showed that consumers process the information both before and during the purchase event.
2.3 Product Quality

Batra et al., (2012) conducted a research that was focused on finding the characteristics of the brand that are loved
the most by the customers. According to the research, quality beliefs are the important determinant of brand
Loyalty and brand love. The objective of this research was to test the model based upon three qualitative studies in
order to find out the attributes of brand that are loved by customers and that lead to the brand loyalty. First two
qualitative studies showed that hundred percent of consumers loved a specific brand. Third study was conducted to
determine the characteristics of brand that are loved by customers and the results showed that high quality is the
most loved characteristic that lead to positive word of mouth, brand loyalty and brand love. In another study by
Cater & Cater, (2010), the relationship between product quality and customer commitment was studied along with
the combined effect of these two on brand loyalty. The result showed that product quality has both direct and
indirect effect on brand loyalty i.e. attitudinal and behavioral loyalty.
2.4 Brand Image

“Brand image is the reasoned or emotional perceptions about a brand as reflected by brand associations held in the
consumer’s memory”. (Dobni & Zinkhan, 1990; Keller, 1993).
Studies have examined the impact of brand image on brand loyalty. Yousaf et al. (2012) has conducted a study to
evaluate the impact of brand image, brand credibility and perceived quality on brand loyalty in cosmetic industry of
Pakistan. The results depicted that a positive relationship exists between brand image and brand loyalty. Moreover,
the research showed that the brand awareness has the most significant impact on brand loyalty. Companies must
focus on creating brand awareness followed by positive brand image in order to retain large customer base.
According to a research conducted by Zehir et al. (2011), service quality has a positive impact on brand loyalty
through brand trust and positive brand image. Moreover, brand communication has a great influence on brand
loyalty through brand trust. This study shows that building brand trust is very important for retaining loyal
customer base.
Rahman M. (2012) has studied the relationship between service quality, customer satisfaction and brand image and
the results showed that a positive relationship exist between customer satisfaction, service quality and brand image.
Positive brand image and service quality lead to positive customer’s perception and enhanced customer
satisfaction. So, companies should focus on brand image in order to retain their customers. Similarly, Alireza et al.
(2011) has studied the impact of brand/ corporate image on brand loyalty in the telecom sector of Iran and the
results depicted that corporate image has direct impact on perceived value that leads to enhanced customer
satisfaction and brand loyalty. So in order to achieve customer satisfaction and brand loyalty corporate / brand
image are important for managers.
2.5 Customer Satisfaction and Perceived Value

“Customer satisfaction refers to the overall satisfaction is characterized by a cumulative construct that has been
evaluated by expectations and perceived performance as well as past satisfaction”. (Johnson at al., 1995).
“Perceived Value is the consumer surplus in economics; perceived value is the difference between the highest price
that consumers are willing to pay for a product or a service and the amount practically paid (Bishop, 1984).
According to the quality perspective, value is the difference between the money paid for a certain product and the
quality of the product”. (Bishop, 1984).
Ennew & Binks, 1999; Hallowell, 1996; Fornell et al., 1996 have used the satisfaction model to determine the
characteristics of brand loyalty. In this model, the satisfaction of customer with the prior consumption of brand is
the key determinant of future purchase of a brand.
Many studies are conducted to determine the impact of customer satisfaction and perceived value on brand loyalty.
Kuo et al. (2009) has assessed the relationship among variables that lead to brand loyalty in mobile networks’
value-added. Results indicated that although service quality have no direct effect on brand loyalty, it can lead to
brand loyalty and repeat purchase through moderating variables i.e. perceived value and customer satisfaction.
Moreover, Mohammad & Alhamadani (2011) has identified that there is a significant positive relationship between
customer satisfaction and service quality and the service quality is the most important determinant of customer
satisfaction. Similar relationship was studied by a study conducted by Rahman M. (2012). The results showed that
a positive relationship exist between customer satisfaction, service quality and brand image. Positive brand image
and service quality lead to positive customer’s perception and enhanced customer satisfaction.
Moreover, Lin et al. (2009) has linked two theories to develop an integrative model of customer loyalty. According
to the Expectation Confirmation theory, Customer satisfaction is determined by three factors i.e. expectations about
the service before encounter, the service encounter and service experience evaluation after encounter. While
according to the Self-determination theory, four factors can influence the customer satisfaction and these factors
impact the customer’s brand loyalty. These factors are External integration, intrinsic motivation, interjected
regulation and identified regulation. The result showed that the most important variables effecting brand loyalty are
intrinsic regulation and identified regulation, which assess the degree of customer’s involvement in the service. So
in order to boost Brand loyalty, these two variables should be given importance while designing service experience.
A study by Hameed F. (2013) has inspected the mediating effect of customer satisfaction and perceived value while
studying the impact of advertising spending on the brand loyalty. The results showed that the advertising spending
has significant impact on store image and customer satisfaction. Moreover, perceived quality was identified as
mediator in the relationship between brand loyalty and advertising spending.
Moreover, Aksoy et al. (2013) has found that that cultural variable have a moderating effect on customer
satisfaction. According to this research, cultural variables moderate the relationship between customer satisfaction
and loyalty.
2.6 Brand Commitment

Other studies have identified customer brand commitment as a key determinant of brand loyalty. Ercis et al., (2012)
has conducted a research to examine the effect of brand value, brand satisfaction, brand quality, brand trust, brand
equity and brand commitment on brand loyalty. The result of this study depicted that in addition to customer
satisfaction, brand trust and brand commitment are important determinants of brand loyalty and they have more
impact on brand loyalty as compared to brand satisfaction. Similarly, Dwivedi et al., (2015) has determined the
impact of customer brand engagement on brand loyalty. In this study three dimensional frameworks was used and
brand engagement is characterized by vigor, dedication and absorption. The results showed that dedication, the
emotional component has emerged as a strong dimension of brand engagement. Overall, Brand engagement has a
significant impact on loyalty intentions even stronger than the traditional customer judgment of quality, value and
satisfaction.
Moreover, study by Raju et al. (2009) has focused on the customer commitment and the strategies they used to
evaluate and purchase different brands. Information processing strategies used by the customers are highly
influenced by the level of commitment with the brands. In order to conduct this research the consumers were
classified into two classes’ i.e. high commitment users and low commitment user. Two studies were conducted and
the objective was to identify that whether consumer focus on similarities or they focus on differences while
comparing two brands. First study asked respondents to share their thoughts about brand advertisements of two
different brands while during second study instructions were given to the respondents. The results showed that high
commitment users evaluate brands by focusing on the differences while the low commitment users evaluate brands
by focusing on the similarities between the brands. Moreover, the results were the same in both studies which
showed that if a consumer has developed a perception or commitment towards a brand it cannot be changed. This
also shed light on the fact that once a brand loyalty is formed it can’t be altered and this can lead to long term
profitability of a company.
2.7 Sales Promotions

Tsao et al. (2009) has conducted a research on five leading companies to examine the impact of promotions on
brand loyalty. The results showed that promotions have an impact on brand loyalty as promotional activates attract
potential switcher and induce repeat purchase behavior. It also concluded that retention rate is highly dependent on
level of loyalty. However, Promotional activities are a weak determinant of brand loyalty as brand loyalty remains
constant in the long-term. Contrary to this research, Buil et al. (2013) has studied the impact of sales promotion on
brand loyalty and perceived quality.
The results showed that different promotional tool have different impacts on perceived quality and brand loyalty.
Some promotional tools are considered to have positive impact on brand image and create positive brand
associations that lead to brand loyalty. On the other hand, promotions have a negative impact on perceived quality
and brand equity (Yoo et al., 2000).So there is a conflict on the impact of promotional tools on brand loyalty.
Moreover, the results showed that perceived quality have negative impact on brand loyalty and this is similar to the
study by Bravo et al., (2007) which stated that quality is not a signal of successful brand.
A study by Agarwal and Teas, (2002) stated that promotions have negative effects on brand associations and brand
image as customers consider price as a representative of quality. So reduction is the price is considered as a bad
signal by the customers. Moreover, DelVecchio et al., (2006) has supported the result that promotions such as price
discounts can result in unfavorable quality evaluations. Yoo et al., (2000) stated that due to promotional tools
customers only think about the pries and not about the brand itself.
Contrary to the studies mentioned above, some studies stated that promotional activities can create positive brand
associations and lead to brand loyalty. Chu and keh, (2006) said that promotional activities can contribute in
improving brand equity by creating positive brand associations. Similarly, study by Palazon-vidal and
Delgado-Ballester, (2005) said that promotional activities associates more favorable brand associations to brands
and create brand equity.
3. CRITICAL ANALYSIS OF EXISTING LITERATURE

3.1 Impact of Service Quality on Brand Loyalty
As already mentioned, many studies have been conducted to study the impact of service quality on brand loyalty.
Moreover, the relationships among variables that lead to brand loyalty are also studies. All studies have shown the
same result that service quality has an indirect positive effect on brand loyalty. Service quality has direct impact on
perceived value and customer satisfaction that further lead to brand loyalty. So existing literature and I am of the
same view that service quality have impact on brand loyalty through moderating variables such as customer
satisfaction and perceived value. The reason is that only if a customer is satisfied with the service quality he would
go for repeat purchase. Moreover, a customer usually process information both before and after purchase of the
brand so if the experience is remarkable he would always go for that brand and this fact results in creation of brand
loyalty.
3.2 Impact of product quality on Brand loyalty

Product quality has both direct and indirect positive impact on brand loyalty. Higher product quality leads to
enhanced customer satisfaction that further leads to brand loyalty. Moreover, quality is the most loved and
preferred characteristics of the brand to the customer and customers are usually willing to pay more for a higher
quality product. So it has direct positive effect on attitudinal loyalty.
3.3 Impact of customer satisfaction on Brand loyalty

Many studies have been conducted to assess the relationship of customer satisfaction with other variables that lead
to brand loyalty. Customer satisfaction has a positive impact on brand Loyalty. Moreover, customer satisfaction
plays a role of moderating variables while studying the impact of service/ product quality on brand loyalty. It is
very important for managers to focus on customer satisfaction as it is a key variable that not only influence the
brand loyalty but also regulates the effects of other variables on brand loyalty.
3.4 Impact of Sales promotions on Brand loyalty

The existing literature show conflicting arguments on the impact of sales promotions on the brand loyalty. Some
studies support the results that promotional activities have negative effect on brand loyalty because reduction in
reference prices is considered as a bad signal for the product quality. On the other hand, some are of the view that
promotional activities create positive brand associations. As, there is a conflict in existing literature there is a need
to further investigate the topic and find a reasonable solution.
3.5 Research Gap

The impact of promotional activities on brand loyalty is not properly studied in existing literature as limited
literature is available on this topic. Moreover, there is a conflict in existing literature about the impact of sales
promotions on the brand loyalty. Some studies support the results that promotional activities have negative effect
on brand loyalty because reduction in reference prices is considered as a bad signal for the product quality (Agarwal
and Teas, 2002; DelVecchio et al., 2006; Yoo et al., 2000).
On the other hand, some are of the view that promotional activities create positive brand associations and can lead
to brand loyalty (Chu and keh, 2006; Palazon-vidal and Delgado-Ballester, 2005) .As, there is a conflict in existing
literature as they show contradictory results, there is a need to further investigate the topic and find a reasonable
solution.
Moreover, the existing research is conducted in foreign countries and no analysis is available on Pakistan. Pakistani
consumers are considered as more price sensitive so my research will study the impact of promotional activities on
brand loyalty to clear the confusion and to study the behavior of Pakistani customers. This research would be
beneficial for managers and leading companies who are trying to acquire and retain loyal customer base.
3.6 Research Questions

 What is the impact of sales promotion on repeat purchase behavior in Apparel industry
 Do monetary and non-monetary sales promotion have different impact on brand Loyalty
 What is the role of perceived product/service quality and brand association in relationship between
sales promotion and brand loyalty.
4. CONCEPTUAL FRAMEWORK AND RESEARCH HYPOTHESIS

This research paper studies the impact of sales promotion, product/service quality and brand associations on brand
loyalty. Sales promotions are my independent variable and to further investigate their impact on brand loyalty, sales
promotions are divided into two categories i.e. monetary and non-monetary sales promotions. Price discounts and
points are taken as monetary promotion .For non-monetary, free gift are considered.
Product/service Quality is the mediating variable and I believe that sales promotions can lead to brand loyalty i.e.
repeat purchase behavior and recommendation only when customers are satisfied with the quality and have strong
associations. Absence of mediating variable i.e. product/service quality will not lead to repetitive consumer
purchase behavior. Brand Association is the mediating variable.
The brand loyalty is the dependent variable and it is measured through repeat purchase behavior and intention of
customers to recommend that brand to others. In this research, it is hypothesized that product/service quality and
brand associations mediates the relationship between sales promotion and brand loyalty. Thus, following
hypotheses were suggested:
H1 = There is a relationship between monetary sales promotion and perceived product/service quality.
H2 = There is a relationship between non-monetary sales promotion and perceived product/service quality.
H3 = There is a relationship between perceived product/service quality and brand association.

H4 = There is a relationship between brand association and brand loyalty.
Figure 1: Conceptual Framework
Sales Brand Loyalty

Promotions
Perceived
Brand
Monetary product/
Associations
Price discounts service quality
Loyalty
Repeat Purchase
Non-monetary
 Free gifts
Independent Mediating Dependent

Variable Variable Variable
5. METHODOLOGY
Descriptive study method was used to test the hypothesis as it helps to gather quantifiable information.
Research Design consisted of the following two steps:
5.1 Pre-test/ Pilot test

After the thorough study of the literature, constructs related to the research were determined and then a
questionnaire was constructed based on these variables and constructs to understand the impact of different
variables on Brand loyalty. The questionnaire has been derived from previous studies; Yoo et al. (2000), Pappu et
al. (2005, 2006) and Buil et al. (2013). It is divided into three sections. First and second section include questions
regarding dependent and independent variables .Moreover, Likert scale has been used to get better results.
Respondent’s demographics are also studied in the third section of questionnaire.
Once a questionnaire was constructed, Pilot test was carried out in order to identify the weaknesses and improve the
questionnaire before conducting a large scale research study. The importance of conducting pilot test is also
stressed in research conducted by Juggessur J. (2011), as it helps in refinement of the research instrument and result
in accurate and unbiased results.
For pilot testing, the sample size was 20 and the pilot test helped in identification and amendments of the problems
with the items, sequence of items, instructions and formatting of the research instrument.
5.2 Administration of Final Survey

After refinement of questionnaire through pilot test findings, the second stage involved the administration of the
final questionnaire on the sample representative of the population.
5.3 SAMPLE DESIGN

Sample design included the following steps:
5.3.1 Population
The target population included both men and women, between the age of 18 to 45, who have availed sales
promotions or are part of any promotional activities. Moreover, sec A and B was targeted as people belonging to
this class are heavy shopper and are more into buying branded products.
5.3.1 Sampling Procedure

The population for this research consists of all the people who are part of the promotional activities that are offered
by any company in any industry. The element is the Individual Consumers – that are involved in purchase of any
kind of product and are part of promotional activities. Moreover, Sampling unit consists of all retail and
departmental stores offering sales promotions.
A multi stage sampling technique was adopted. Firstly, two geographic areas were randomly selected from map of
Lahore. Then all the departmental t and retail stores that were offering any kind of sales promotions were listed and
outlets were randomly selected from the list. After the selection of outlets, respondents were selected by systematic
sampling i.e. every third consumer entering in the retail or departmental store was interviewed. Moreover, Data was
collected through personal interviews.
5.3.2 Sample Size

The sample size comprised of 200 respondents. According to a research conducted by Sirfraz, M., Sabir, H., & Naz,
H. (2014), 200 was considered as an appropriate sample size for conducting research on purchase intentions.
5.3.4 Data Collection Method

The data collection technique used for conducting the research was personal interviews based on structured
questionnaire. A questionnaire was developed and retail and departmental stores were visited to conduct personal
interviews based on the questionnaire. Personal interview technique was used to eliminate any chance of
misinterpretation of questions by respondents.
5.4 Questionnaire Formulation

The questionnaire was derived from previous studies; Yoo et al. (2000), Pappu et al. (2005, 2006) and Buil et al.
(2013). It was divided into three sections. First and second section includes questions regarding dependent and
independent variables. Moreover, Likert scale has been used to get better results. Respondent’s demographics are
also studied in the third section of questionnaire. Details of the questionnaire are given in Table 1 below.
Table 1: Questionnaire Details

Sr. # Variable Researcher Year No. of Items
1 Product Quality Buil, I., de Chernatony, L., & Martínez, E. (2013) 2013 3
2 Service Quality Zehir, C., Şahin, A., Kitapçı, H., & Özşahin, M. (2011) 2011 6
3 Brand Associations Buil, I., de Chernatony, L., & Martínez, E. (2013) 2013 8
4 Repeat Purchase Zehir, C., Şahin, A., Kitapçı, H., & Özşahin, M. (2011) 2011 3
5 Loyalty Zehir, C., Şahin, A., Kitapçı, H., & Özşahin, M. (2011) 2011 3
Buil, I., de Chernatony, L., & Martínez, E. (2013)

6 Non-monetary promotion 2013 3
7 Monetary promotion Buil, I., de Chernatony, L., & Martínez, E. (2013) 2013 3
6. RESULT AND ANALYSIS

The data was collected from 200 respondents that were selected through internet survey and by visiting
departmental and retail stores located in Lahore. The sample characteristics are shown in Table 2.
Table 2: Sample Characteristics

Variable Total Cases Categories %
Male 40%
Gender 200
Female 60%
18-24 years 52%
25-31 years 31%

Age 200
32-38 years 14%
39-45 years 3%
Salaries Employee 41%

Occupation/
Self-Employed 5%
Source of 200
Student 48%
Income
Housewife 6%
Below PKR 30,000 39%
PKR 30,000 - 39,999 9%
Monthly Income 200 PKR 40,000 – 49,999 9%
PKR 50,000-59,999 7%
PKR 60,000 and above 36%
In the study, for the initial refinement of scale, reliability analysis was used and 25 items were selected; while 3
were discarded. Moreover, refinement was done on the basis of factor loading values.
6.1 Confirmatory Factor Analysis

Confirmatory factor Analysis can be defined as:
“A type of structural equation modeling that deals specifically with measurement models; that is, the relationships
between observed measures or indicators and latent variables or factors.” (Schreiber, J. B., Nora, A., Stage, F. K.,
Barlow, E. A., & King, J. 2006).
The confirmatory factor analysis was used in this research to get results of this study. In this research, monetary and
non-monetary promotions are taken as independent variables. Product/service quality and brand associations are
mediating variables while brand loyalty is the dependent variable. Figure 2 depicts the confirmatory factor analysis
for this research.
Figure 2: Confirmatory Factor Analysis
6.2 Factor Loading

Factor loadings are defined as:
“The regression slopes for predicting the indicators from the factor” (Schreiber, J. B., Nora, A., Stage, F. K.,
Barlow, E. A., & King, J., 2006). The factor loading values those were greater than 0.5 are shown in below table.
Table 2: Factor Loading

Factor
Construct Items
Loading
PQ1. Brand X offers very good quality products 0.75
Product Quality PQ2. Brand X offers very reliable products 0.78
PQ3. Brand X offers products of consistent quality 0.79
SQ1. This brand provides superior service 0.81
SQ2. I always have an excellent experience when I use this brand 0.81
Service Quality
SQ3. Brand X provides excellent customer service 0.76
SQ4. I would say this brand's physical environment is one of the best in its industry 0.62
BA1. Brand X is good value for the money 0.64
BA2. Within Product Category I consider brand X a good buy 0.79
BA3. Brand X has a personality 0.83
BA4. Brand X is interesting 0.80

Brand Association
BA5. I trust the company which makes brand X 0.79
BA6. I like the company which makes brand X 0.73
BA7. I have a clear image of the type of person who would use the brand X 0.66
BA8. The company which makes brand X has credibility 0.71
RP1. I intend to buy other products of this brand 0.66
RP2. The next time I need that product, I will buy the same brand 0.77
Repeat Purchase
RP3. I would only consider purchasing this brand again, if it would be substantially
0.50
cheaper
L1. I consider this brand as my first choice in this category 0.76

Loyalty
L2. I will continue to be loyal customer of this brand 0.70
MP1. Brand X frequently offers price discounts

0.84
Monetary
MP2. Brand X often uses price discounts
Promotion 0.78
MP3. Brand X uses price discounts more frequently than competing brands 0.77
Non-monetary G1. Brand X frequently offers gifts 0.89
promotions G2. Brand X uses gifts more frequently than competing brands 0.91
Some items were discarded during analysis as they were not the good representative of construct measured as they
tend to measure some other constructs also. These discarded items are shown in below table.
Table 3: Discarded Items

Item Variables Researcher
L3. Commercials regarding to competing brands Loyalty Zehir, C., Şahin, A., Kitapçı, H., & Özşahin,
are not able to reduce my interest in buying this M. (2011)
brand
SQ5. This brand has fair system for the handling Service quality Zehir, C., Şahin, A., Kitapçı, H., & Özşahin,
of complaints M. (2011)
SQ6. This brand's staff efficiently deal with Service quality Zehir, C., Şahin, A., Kitapçı, H., & Özşahin,
customer complaints M. (2011)
6.3 Reliability and Validity

6.3.1 Composite Reliability
The composite reliability also known as internal reliability is defined as:
“A measure of the internal consistency of the construct indicators, depicting the degree to which they indicate the
common latent construct.” (Narayan, B., Rajendran, C., & Sai, L. P., 2008).
According to Hair, J.F. Jr, Anderson, R.E., Tatham, R.L. and Black, W.C.( 2003), the acceptable value of
composite reliability is above 0.70 and it indicates that if the same items are used to measure a construct , the result
will be consistent. In this research the value for all variables is above 0.70 (Table 5) which shows the reliability of
items loaded on latent construct.
6.3.2 AVE or Convergent Validity

Convergent validity is defined as:
“The degree to which the different approaches to construct measurement are similar to (or converges on) other
approaches that it is theoretically similar to” (Narayan, B., Rajendran, C., & Sai, L. P., 2008).
The acceptable value of AVE or convergent validity is greater than 0.5(Hair, J., Black, W., Babin, B., and
Anderson, R., 2010). As shown in table 5, the value of convergent validity for all the constructs included in this
study is greater than 0.5 (Table 5). This shows that items of every construct share a high proportion of variance in
common and it also represents the fact that an item measuring a construct measures it accurately.
6.3.3 Discriminant Validity

According to Narayan, B., Rajendran, C., & Sai, L. P. (2008), Discriminant validity is “the degree to which the
measure is not similar to (or diverges from) other measures that it is theoretically dissimilar to” (Narayan, B.,
Rajendran, C., & Sai, L. P., 2008).
As shown in table 5, all five variables have lesser values of discriminant validity than the convergent validity,
which indicate the fact that all constructs are truly exclusive or distinct from other constructs.
Table 4: Reliability and Validity Summary

CR ASV-Average Shared
Construct AVE (Convergent Validity)
(Composite Reliability) Variance)
Brand Association 0.909 0.558 0.337
Monetary promotion 0.837 0.632 0.146
Non-monetary promotion 0.899 0.816 0.095
Service/product quality 0.904 0.576 0.300
Brand loyalty 0.90 1.128 0.276
6.4 Model Fit Indices

6.4.1 CMIN
According to Narayan, B., Rajendran, C., & Sai, L. P. (2008), CMIN shows “whether model fit has been achieved
by “over fitting” the data with too many coefficients”. (Narayan, B., Rajendran, C., & Sai, L. P., 2008).
The AMOS output for the Model Fit is shown in Table 6, where number of parameters is represented by NPAR and
DF stands for the degrees of freedom. Moreover, according to a study by Narayan, B., Rajendran, C., & Sai, L. P.,
(2008), a small value of CMIN in comparison with the CMIN value of the independent model shows the fitness of
model. The CMIN value of this model is 468.252, which is smaller in comparison with the CMIN value of the
independent model i.e. 468.252 < 2876. Thus this result shows that the value of CMIN for the model is good.
Moreover, CMIN/DF is considered as an appropriate measure to indicate model fit as compared to CMIN as CMIN
value is sensitive to the sample size and for good model fit the value of CMIN/DF should not exceed 5. The value
of CMIN/DF is 1.794 for the model, which is even less than 2.So it is indicative of good model fit.
Table 5: AMOS Output for Model Fit

Model NPAR CMIN DF P CMIN/DF
Default model 64 468.252 261 .000 1.794
Saturated model 325 .000 0
Independence model 25 2876.907 300 .000 9.590
6.4.2 Goodness-of-Fit Index (GFI)

According to Narayan, B., Rajendran, C., & Sai, L. P. (2008), perfect model fit is shown by value 1 whereas good
fit is indicated by values greater than 0.70 .
The GFI for the model is 0.821 which is greater than 0.7.So it represents an acceptable goodness of fit. (Table 7)
6.4.3 Adjusted Goodness-of-Fit Index (AGFI)

AGFI represents “the overall degree of fit (the squared residuals from prediction compared with the actual data),
adjusted for the degrees of freedom.” (Narayan, B., Rajendran, C., & Sai, L. P.,2008)
The value of AGF in this research model is 0.777, which shows that there is not a big difference between the value
of GFI and AGFI. (Table 7)
Table 6: AMOS Output Goodness of Fit
Model RMR GFI AGFI PGFI
Default model .049 .821 .777 .660
Saturated model .000 1.000
Independence model .284 .206 .140 .191
6.4.4 Comparative Fit Index (CFI)

Comparative fit index (CFI) is “a measure of the incremental fit comparing the estimated and the base model, with
the accepted value being 0.90 or greater” (Narayan, B., Rajendran, C., & Sai, L. P., 2008).
The value of CFI for this research was 0.920, which represents goodness of fit as it is greater than 0.90.(Table 8)
6.4.5 Non-Normed Fit Index (NFI)

Non-Normed Fit Index is an incremental fit index and its value ranges from 0 to 1. Moreover, according to
Narayan, B., Rajendran, C., & Sai, L. P. (2008), A perfect fit is shown by value of 1, whereas a value of 0.90 or
greater shows good fit.
The value of NFI for this model is 0.837, which shows reasonably good fit. (Table 8)
6.4.6 Tucker Lewis Index (TLI)

The higher values of TLI shows a better fit than lower values. The value of TLI for this model is 0.908 which is
greater than 0.90 and shows good fit. (Table 8)
Table 7: AMOS Output Comparative Fit Index
NFI RFI IFI TLI

Model CFI
Delta1 rho1 Delta2 rho2
Default model .837 .813 .921 .908 .920
Saturated model 1.000 1.000 1.000
Independence model .000 .000 .000 .000 .000
6.4.7 Root Mean Square Error of Approximation (RMSEA)

RMSEA is “indicative of the goodness-of-fit that could be expected if the model were estimated in the population,
and not just the sample was used for estimation.” (Narayan, B., Rajendran, C., & Sai, L. P., 2008).
According Narayan, B., Rajendran, C., & Sai, L. P., 2008, the value of RMSEA should be between 0.05 and 0.08
and lesser is better.
The RMSEA value for the model of this research study is .068 which is less than 0.08 and it indicatives that the
model not only fits the sample extracted from the population but also fits the population .(Table 9)
Table 8: AMOS Output RMSEA
Model RMSEA LO 90 HI 90 PCLOSE
Default model .068 .058 .078 .002
Independence model .225 .217 .232 .000
Table 9: Model Fit Summary

[2] Benchmarks/
[1] Parameters [4] Actual Figures
[3] Recommended Values
[5] CMIN/DF [6] 2-5 [7] 1.794
[8] CFI [9] >0.9 [10] 0.920
[11] GFI [12] >0.7 [13] 0.821
[14] AGFI [15] >0.7 [16] 0.777
[17] RMSEA [18] 0.05-0.08 [19] 0.068
[20] NFI [21] >0.9 [22] 0.837
[23] TLI [24] >0.9 [25] 0.908
6.4.8 Path Analysis

In this research study, Path analysis was done using Structural Equation Modeling and it also demonstrates the
hypothesis. The results of the hypothesis testing are shown in below table.
Table 10: Hypothesis Testing

Estimate S.E C.R P
SQM .295 .099 2.963 .003 Accepted
SQ NM -0.079 0.074 -1.063 .288 Rejected
BASQ .654 .085 7.654 *** Accepted
BL BA 0.648 0.137 4.726 *** Accepted
*** Shows that result is significant at significance level of less than 0.001.
6.4.9 Hypothesis 1 (H1)

Hypothesis 1 predicts that there is a positive relationship between monetary promotions and perceived product/
service quality in Apparel industry. The results of this research reveal that there is a positive significant relationship
between the monetary promotions and perceived product/service quality.
P =0.003 <0.05
Thus we accept Hypothesis 1 at 5 % significance level (Table 11).
The researches that are carried out before had conflicting results. The result of this research is consistent with the
studies by Chu and keh, (2006), Palazon-vidal and Delgado-Ballester, (2005) and Tsao et al. (2009).

Hypothesis 2 predicts that there is a relationship between non-monetary promotion and perceived product/service
quality. The results show that there is no significant relationship between non-monetary promotion and perceived
product/service quality.
P =.288 > 0.05
As no research study has studied the relationship between non-monetary promotion and perceived quality before,
so this result contributes to the literature. Thus, we reject H2.

Hypothesis 3 predicts that there is a relationship between perceived product and service quality and brand
association. The result shows that there is positive and highly significant relationship between these two variables
at 1% significance level.
P < 0.001
Thus, we accept the hypothesis (Table 11).
The result of this study is consistent with the studies by Rahman M. (2012), Hameed F. (2013), Alireza et al. (2011)
Zehir et al. (2011).

Hypothesis 4 predicts that there is a relationship between brand associations and brand loyalty. The result of this
study shows that there is positive and highly significant relationship between brand association and brand loyalty at
1% significance level (Table 11).
P < 0.001
Thus, we accept the hypothesis.
The results of this study are consistent with the results of studies by Yousaf et al. (2012), Rahman M. (2012), Zehir
et al. (2011), Alireza et al. (2011) and Buil et al. (2013).
6.4.13 Path Analysis (Relationship between NM and BL)

To further investigate the relationship between non-monetary sales promotions and Brand loyalty a new path was
developed. The results of the hypothesis testing are shown in below table.
Table 12: Hypothesis Testing

Estimate S.E C.R P
SQM .228 .077 2.964 .003 Accepted
BA SQ .653 .086 7.632 *** Accepted
BLBA .640 .134 4.768 *** Accepted
BL NM 0.072 0.033 2.193 .028 Accepted
*** Shows that result is significant at significance level of less than 0.001.

Hypothesis 2 predicts that there is a relationship between non-monetary promotions and perceived product/ service
quality in Apparel industry. The results of this modified path analysis reveal that there is a positive significant
relationship between the non- monetary promotions and perceived product/service quality.
P = 0.028 < 0.001
Thus we accept Hypothesis 1 at 5 % significance level (Table 11). But this positive relation is present only when
Brand loyalty is already created. Once a person is brand loyal, offering non-monetary promotions i.e. free gifts will
result in increased loyalty.
The result of this research is consistent with the studies by Chu and keh, (2006), Palazon-vidal and
Delgado-Ballester, (2005) and Tsao et al. (2009).
7. DISCUSSION OF RESULTS
The study was conducted to understand the relationship of different variables that impact Brand Loyalty. Moreover,
the study further intended to investigate the impact of sales promotion on brand loyalty as a gap was identified in
the existing literature through confusion spotting. So to investigate the relationship, sales promotion was divided
into monetary and non-monetary sales promotion in order to study both types in detail and add value in existing
literature.
The results showed that monetary promotion has direct and significant relationship with the perceived
service/product quality in apparel industry. This is because of the fact that people consider brand as a guarantee of
high quality. For example, in the apparel industry we have brands like Khaadi , Nishat etc. When these brands offer
price discounts, people consider it a great opportunity because they can get good product at low price. Moreover,
people consider that strong and profitable brands are capable of offering price discounts. When brand offer price
discounts to the customers, they consider it as a great gesture that brand is valuing them. Hence there is a positive
relationship between monetary sales promotion and perceived product/ service quality.
As discussed in path analysis, non-monetary promotions only have significant effect on brand loyalty when they are
offered to already loyal customer. This is due to the fact that Pakistani customers are price sensitive. They consider
saving money more valuable than getting a free gift because value of money is more than a gift as we can never be
sure that gifts are of good quality. So, non-monetary promotions should be offered only when the customer is
already loyal as they will be effective in that case and offering free gifts will result in increased brand loyalty as
seen in above results.
The positive and significant relationship between perceived product/ service quality and brand association is
justified as when a customer consider a brand to be of high product and service quality, he develops strong brand
associations. For example, he consider brand to be trustworthy and good value of money. So strong brand
associations are developed and customer can relate themselves with the brand and start personalizing the brand.
Moreover, when the customer is satisfied with the brand and have strong brand associations then he start preferring
the brand over all other brands and this result in repeat purchases and increase in purchase frequency. The customer
can also recommend the brand to others. In this way, strong brand associations can lead to brand loyalty and they
have positive relationship.
Perceived product/service quality and brand associations mediate the relationship between sales promotion and
brand loyalty. This is due to the fact that customer will become loyal to a brand only when the product and service
is of high quality and they have strong brand associations. This fact is of high importance for the managers because
price discounts will be beneficial only when the quality will be good and brand image is strong. So the managers
should focus on all these variables in order to create a loyal customer base that can result in long term profitability
for the Brand.
8. MANAGERIAL IMPLICATIONS
between brands and they have to differentiate their brands on the basis of service/product quality and strong brand
image in order to capture the market share. Moreover, their objective is to create customer satisfaction that can
result in brand loyalty i.e. more repeat purchases and more sales of product and services. Moreover, as it is said that
it is five times more expensive to find a new customer than to retain a customer. So the companies and managers are
trying to create a pool of brand loyal customers and retain them for long-term profitability.
Due to competition, products availability in the market has been improved and it has become very important for
companies in Pakistan to focus on building strong brand image and developing brand loyalty that can retain loyal
customers and lead to sustainable and long-term profitable relationship. Moreover, as the results of this research
have shown that brand associations, customer satisfaction and perceived product/ service quality has a positive
and significant on brand loyalty and repeat purchase behavior, so these dimensions should be dealt carefully in
order to retain loyal customers. Moreover, this research will contribute to the literature by explaining the link
between variables that create customer satisfaction that further lead to brand loyalty and repetitive purchase
behavior.
This research will provide great insight to the managers because it has deeply investigated the impact of sales
promotions in Pakistan. Little literature was available on this topic and this research has contributed to the literature
by investigating the impact in-depth. The results show that monetary sales promotion have positive and significant
effect on brand loyalty and perceived product/ service quality and brand associations are the mediators in this
relationship. So, this research provides great insight to managers in developing of promotional strategy. Managers
can take more advantage from sales promotion by offering price discounts to customers and providing them with
consistent quality product. Once the customers are loyal, the degree of loyalty can be increased by offering them
free gifts.
Moreover, Managers can learn from this research that consumers of Pakistan are price sensitive and they don’t
consider price cuts as signal of poor quality. If your brand is strong, price discounts are considered as an incentive
and value for money. Customer feel that they are valued and this result in brand Loyalty.
9. LIMITATIONS
This research has several limitations as it is conducted at a small level. Firstly, there are many variables that have
impact on brand loyalty but only a few are included in the research model and only their impact and relationship is
studied in Apparel industry. Learning about other variables and other industries may contribute more towards the
literature so they should be added for better understanding. Secondly, Sample size is small and is taken only from
Lahore. Results may change in other cities as variables can be influenced from cultural factors. Moreover, only
sales promotions are analyzed and other promotions i.e. trade promotions and advertising expenses are not included
in the model due to data collection constraints .In sales promotions, online promotions are not taken into account
and these can be added for better understanding of the relationship between sales promotions and brand loyalty.
The research is restricted due to the time and financial constraints. It was difficult to reach out to more people in
population. Moreover, it is a cross sectional study and is limited to one time period. Financial constraints also made
it difficult to reach out to more people in the population. Despite limitations, it has contributed to literature by
studying the impact of sales promotion in detail.
10. FUTURE RESEARCH

The research was conducted only in the apparel industry. Similar research should be conducted in other industries
in order to clear the confusion regarding the conflicting impact of sales promotion on brand loyalty in existing
Literature. Moreover, as this topic is of great managerial value, other sales promotions should also be studied in
addition with the advertising expenses and trade promotions.
Moreover, this study should also be carried out in other regions of Pakistan in order to investigate the impact of
sales promotion on brand loyalty in different cultures. It is very important for managers to understand the customers
before developing any promotional and pricing strategies. Different people react differently to price reductions so it
is better to study the impact in different cultures.
This study has shown that non-monetary promotions are beneficial when customer is already loyal. There is a need
to investigate the factors due to which Pakistani customers are more inclined towards the monetary promotions and
price cuts. So, the relationship between non-monetary promotions and brand loyalty should be studied in detail in
order to identify the factors that can result in significant relationship between non-monetary promotions and brand
loyalty. This will help managers in developing more beneficial strategies and creating a pool of profitable and loyal
customers.
11. CONCLUSION
Increased competition and exposure to information has made it difficult for the managers to maintain the market
share. Brand Loyalty has become the key of success as it creates and retains a loyal customer base that leads to the
long term profitability of a firm. It is very important for managers to study the variables that impact brand loyalty
and the relationship between these variable should also be studied. Managers can use this knowledge is developing
pricing and promotional strategies.
In this study the relationship of sales promotions, perceived product/service quality, brand associations and brand
loyalty is studied in detail. The results show that monetary sales promotions have positive and significant
relationship with brand loyalty in Apparel industry. Brand association and perceived product/service quality
mediates the relationship between these two variables because price discounts can result in brand loyalty only when
customers are satisfied with the product/ service quality and they have strong brand associations. Moreover, this
study also shows that non-monetary promotions have significant relationship with brand loyalty only when the
customer is already loyal to brand. This result has great managerial implications as managers can develop
promotional and pricing strategies while keeping these results in mind. They should offer price discounts in early
stage of loyalty and then non-monetary promotions should be offered at later loyalty stage In order to get more
advantage from policies.
This research has contributed to the literature as there was conflict about the relationship of sales promotion and
brand loyalty in existing literature and no such research was conducted before in Pakistan.
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Characteristics of Brand Loyalty: A Study on Apparel Industry

Article · August 2018

Tehreem Saif M. Jamaluddin Ahmed

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Characteristics of Brand Loyalty: A Study on Apparel Industry

1.1 Statement of Problem

1.3 Research Objectives

2.1 Brand Loyalty

2.2 Service Quality

2.3 Product Quality

2.4 Brand Image

2.5 Customer Satisfaction and Perceived Value

2.6 Brand Commitment

2.7 Sales Promotions

3. CRITICAL ANALYSIS OF EXISTING LITERATURE

3.2 Impact of product quality on Brand loyalty

3.3 Impact of customer satisfaction on Brand loyalty

3.4 Impact of Sales promotions on Brand loyalty

3.5 Research Gap

3.6 Research Questions

4. CONCEPTUAL FRAMEWORK AND RESEARCH HYPOTHESIS

H3 = There is a relationship between perceived product/service quality and brand association.

Figure 1: Conceptual Framework

Sales Brand Loyalty

Independent Mediating Dependent

5.1 Pre-test/ Pilot test

5.2 Administration of Final Survey

5.3 SAMPLE DESIGN

5.3.1 Sampling Procedure

5.3.2 Sample Size

5.3.4 Data Collection Method

5.4 Questionnaire Formulation

Table 1: Questionnaire Details

Buil, I., de Chernatony, L., & Martínez, E. (2013)

6. RESULT AND ANALYSIS

Table 2: Sample Characteristics

18-24 years 52%

25-31 years 31%

Salaries Employee 41%

Below PKR 30,000 39%

PKR 30,000 - 39,999 9%

Monthly Income 200 PKR 40,000 – 49,999 9%

PKR 60,000 and above 36%

6.1 Confirmatory Factor Analysis

Figure 2: Confirmatory Factor Analysis

6.2 Factor Loading

Table 2: Factor Loading

PQ1. Brand X offers very good quality products 0.75

Product Quality PQ2. Brand X offers very reliable products 0.78

PQ3. Brand X offers products of consistent quality 0.79

SQ1. This brand provides superior service 0.81

BA1. Brand X is good value for the money 0.64

BA2. Within Product Category I consider brand X a good buy 0.79

BA3. Brand X has a personality 0.83

BA4. Brand X is interesting 0.80

BA6. I like the company which makes brand X 0.73

BA8. The company which makes brand X has credibility 0.71

RP1. I intend to buy other products of this brand 0.66