Citation
(2015), "Executive summary of “Product involvement, price perceptions, and brand loyalty”", Journal of Product & Brand Management, Vol. 24 No. 4. https://doi.org/10.1108/JPBM-07-2015-902
Publisher
:Emerald Group Publishing Limited
Executive summary of “Product involvement, price perceptions, and brand loyalty”
Article Type: Executive summary and implications for managers and executives From: Journal of Product & Brand Management, Volume 24, Issue 4
This summary has been provided to allow managers and executives a rapid appreciation of the content of this article. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefits of the material present.
The importance to firms of customer loyalty is widely acknowledged. Research has consistently shown that having a loyal customer base positively impacts on profits and market share. Furthermore, companies are better positioned to charge a price premium and respond more effectively to competitor initiatives. Loyalty’s value has risen further, as quality improvements have made retailer brands an increasingly viable alternative to established manufacturer brands.
Loyalty is generally believed to incorporate separate yet interrelated dimensions pertaining to attitude and behavior. Attitudinal loyalty reflects such as feelings and commitment, whereas repeatedly purchasing the brand indicates loyalty of the behavioral type. Scholars recognizing the importance of customer loyalty have strived to identify its key antecedents. Among those frequently cited are customer satisfaction, corporate reputation and experience and trust of the brand.
It is also posited that product involvement can positively influence brand loyalty. Defined as “an internal state of arousal”, involvement consists of intensity, direction and persistence. These aspects, respectively, indicate intensity levels, the object of attention and whether the involvement is of an enduring or more temporary nature. Involvement can trigger cognitive, affective and behavioral responses and indicates that an individual finds a specific product interesting, important and relevant in terms of meeting certain needs and goals. Evidence shows that higher involvement prompts greater thoroughness during decision-making. Seeking more information and taking longer to evaluate potential choices and compare product attributes are typical when involvement is high. It is thought that expending such effort is likely to inspire a sense of commitment toward the selected brand.
On the contrary, individuals whose involvement is low are inclined to examine less information prior to purchase and to choose more quickly. Different academics argue that efforts are minimal because there are fewer negative consequences to selecting the wrong option.
Overall, however, investigations into relations between product involvement and brand loyalty have generated inconclusive findings. But much work has noted the significance of price as a market cue capable of impacting on consumer decision-making. How price perceptions relate to involvement and, thus, loyalty has received only scant research attention to date. Relevant work has largely addressed how other aspects of pricing relate to loyalty.
Earlier research classified price perceptions into seven different types labeled as:
Value consciousness: Reflecting consumer concern about finding the balance between price paid and quality received.
Price consciousness: Where the emphasis is on paying low prices.
Sale proneness: Which is an inclination to purchase an item because it is presented at a sale price is the focus here.
Coupon proneness: Reflecting consumer attraction to discount vouchers.
Price mavenism: This defines individuals who are knowledgeable about pricing information for various products and the stores where lowest prices can be obtained. Such people pass on this knowledge to other consumers.
These perceptions reflect the negative impact of price in that people rating high in these tendencies will typically be oriented toward paying lower prices and exhibit lower levels of brand loyalty as a result. For instance, such as sales promotions or coupons prompt consumers to believe they are obtaining greater value compared to the regular price of the product. Assumptions of this nature then shape their purchase decisions.
It is conversely suggested that loyalty is likely to be favorably influenced by the two remaining price perceptions:
1. Price-quality schema: The rationale here is that positive correlation exists between price and quality.
2. Prestige sensitivity: It relates to positive responses to higher prices in the belief that such prices serve to indicate status and prestige to others.
When consumers believe they are receiving superior quality and/or prestige from a particular product, the probability of them remaining loyal to the brand increases. Another significant research finding is that individuals oriented toward status are reluctant to switch from expensive brands because they feel that risks are involved.
Investigation of these issues takes place in a study involving consumers in Portugal who are mainly responsible for household shopping. Questionnaires were completed by 535 subjects with females accounting for 72.7 per cent of the sample. Average age of respondents was 36 years. Questions addressed different aspects of product involvement, price perceptions and attitudinal and behavioral brand loyalty. Subjects were asked to consider one product from a group of either above-average involvement categories or below-average involvement categories. Yoghurts, wine, cracker biscuits and shampoo were placed in the former category, with tomato puree, paper napkins, bleach and washing powder in the latter.
Analysis indicated a positive and significant impact of involvement on brand loyalty. It is also positively associated with all the consumer price perceptions, except for value consciousness. The study additionally confirmed relations between the different price perceptions and brand loyalty in that:
Value consciousness and sale proneness have a strong negative impact on brand loyalty. This suggests consumers become less loyal the more they are interested in costs/benefits trade-offs or promotions.
Price consciousness, coupon proneness and price mavenism all have a significant positive influence on brand loyalty. With these perceptions, the relationship was in the opposite direction to that anticipated.
A strong positive association was found between price-quality schema and brand loyalty.
Brand loyalty was not significantly influenced by prestige sensitivity.
Ferreira & Coelho note that the link between involvement and loyalty was only evident for the lower involvement products. This is attributed to the involvement range being relatively small. In addition, the impact on brand loyalty of price perceptions was less for low-involvement products. Similar results were generated in earlier work.
On this evidence, the authors conclude that highly involved consumers are likelier to remain loyal to the same brand. The impact of the different price perceptions on the involvement – loyalty relationship is regarded as a significant finding. That price consciousness and coupon proneness were positively linked with loyalty was unexpected and suggests that such consumers have the propensity to become loyal to lower priced brands. Earlier work indicated that increased price-sensitivity triggered by exposure to promotions can also be a key factor. Apparent loyalty among coupon users might be attributed to such individuals increasing their purchases to exploit lower prices and, thus, stockpiling the brand. Price mavens can be similarly loyal to lower priced brands, in their case possibly because of their greater awareness of the economic benefits provided. The insignificant effect of prestige sensitivity on brand loyalty was another unanticipated finding. A likely explanation for this is the “low social visibility” of products examined in this study.
In the quest to increase brand loyalty, managers should develop strategies which strengthen consumer involvement with their products. One suggestion is to emphasize the importance that consumers attach to specific functional or symbolic attributes of the product or brand. Ferreira & Coelho recommend caution where pricing and sales promotions are concerned. They contend that focusing solely on higher or lower prices is likely to generate more positive effects on loyalty that adopting a “value-for-money orientation”. Less price elasticity is also recommended.
Future work might consider actual behavior over an extended time period. Studies could also use different products and explore how involvement relates to additional brand-related constructs. Using qualitative research to further examine the association between price-perceptions and brand loyalty is another option.
To read the full article enter 10.1108/JPBM-06-2014-0623 into your search engine.
(A précis of the article “Product involvement, price perceptions, and brand loyalty”. Supplied by Marketing Consultants for Emerald.)