Understanding the Relationship Between Self-Congruity and Brand Loyalty, and Stating the Moderating Effect of Consumers’ Price Consciousness: the Literature Review

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Understanding the relationship between self-congruity and brand loyalty, and stating the moderating effect of consumers’ price consciousness: The literature review

Yulia Yushchik, 10292004 Assignment: Literature review Number of words: 2498 Brand Communication Dr. Peeter Verlegh The University of Amsterdam March 30, 2012

Introduction When the popularity of the relationship marketing is growing widely, consumer-based determinants of brand loyalty are interesting and useful field to study. Brand loyalty is realized by having strategic importance for a business. The figures provided by Bain&Co indicate that a 5% increase in customer retention varies for a company’s profit by 40 to 95%. An increase in customer loyalty of 1% is the equivalent of a 10% cost reduction (Reichheld & Teal, 2001). Gounaris and Stathakopoulos (2004) also mention that loyal customers are less expensive because they reduce marketing costs. For example, several researches found that brand loyalty is positively related to word-of-mouth (De Matos & Rossi, 2008). The relevance of consumer-oriented policy has increased at the time of economic recession. Retaining brand loyalty in a difficult economic climate is a challenging task. Practitioners propose to work harder on getting to know the customers in order to better serve their needs (Slim, 2010, February 3). This allows companies to personalized loyalty programs, which is considered to be the right solution for preserving people’s loyalty to a brand. In the academic world loyalty has been largely studied with regard to its antecedents as brand identity, trust, value, brand commitment, and satisfaction (Brodie, Whittome, & Brus, 2008; Da Silva & Syed Alwi, 2006; He, Li, & Harris, 2011; Kim, Morris, & Swait 2008; Nam, Ekinci, & Whyatt, 2011; Sidershmukh, Singh, & Sabol, 2002). Equally with that, the research on consumer’s self-concept…...

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