Brand loyalty is defined as positive feelings towards a brand and dedication to purchase the same product or service repeatedly now and in the future from the same brand, regardless of a competitor’s actions or changes in the environment.
Brand loyalty has shown to profit firms by saving them a lot of money. Benefits associated with loyal consumers include:
· Acceptance of product extensions.
· Defense from competitors cutting of prices.
· Creating barriers to entry for firms looking to enter the market.
· Customers willing to pay high prices.
· Existing customers cost much less to serve.
· Potential new customers.
Generally speaking, brand loyalty will increase profit over time as firms do not have to spend as much time and money on maintaining relationships or marketing to existing consumers. Loyal long-term customers spend more money with a firm.
Philip Kotler, again, defines four patterns of behavior regarding brand loyalty
1. Hard-core Loyals - who buy the brand all the time.
2. Split Loyals - loyal to two or three brands.
3. Shifting Loyals - moving from one brand to another.
4. Switchers - with no loyalty