Behavioral Brand Loyalty Research Articles

Building loyalty in the fast fashion market: The key role of customer brand identification

ABSTRACT This research proposes a novel conceptual model based on the Social Identity Theory (SIT) to identify the customer’s path to brand loyalty in the fast fashion industry. For this purpose, the following constructs are considered: customer brand identification (CBI), customer brand satisfaction (CBS), active brand word of mouth (ABWOM), passive brand word of mouth (PBWOM) and behavioural brand loyalty (BBL). To accomplish this research goal, a sample of 368 customer surveys was collected in Spain, and the data were analysed using descriptive statistics and Structural Equation Modelling (SEM). The results show that the main influences are, in this order: CBI on PBWOM, CBS on ABWOM and CBI on CBS. This study represents a pioneering effort in delving into the unexplored path leading from CBI to BBL in the dynamic fast fashion landscape. What is more, this research also introduces a highly novel perspective by differentiating between the active and passive components of customer word of mouth, a perspective that has thus far been under-researched. Several management guidelines are offered to improve the brand management strategies of operators in the industry through a deeper understanding of consumer behaviour.

How brand loyalty and its marketing activities affect Japanese fashion companies' financial performance

PurposeTo investigate (1) the relationship between young adults' behavioural brand loyalty (BBL) and Japanese fashion companies' financial performance (FP) and (2) FP improvement from the perspectives of social media brand engagement (BE) and loyalty programmes (LPs) by applying the complexity theory.Design/methodology/approachA mixed methodology was employed by combining qualitative and quantitative approaches to examine the prediction of outcomes by various variables in a realistic context. The integrated model associated BE and LPs with BBL and FP, which are essential for fashion companies. We selected 14 fashion brands belonging to 14 publicly traded Japanese fashion companies and surveyed 183 Japanese consumers (aged 18–25 years) who chose these brands as their favourites, engaged with the brands and participated in LPs.FindingsThe findings reveal the positive and negative effects of the variables (BE and LP) on the outcomes (short- and long-term FP). They offer marketing implications regarding brand strategy and financial improvement by considering various combinations of causal factors and complex situations, such as the fashion brands' and consumers' characteristics.Originality/valueExisting empirical studies consider consumers' symmetric reactions to the benefits and losses from variables (BE, LP and BBL) but do not realistically reveal the negative and positive effects on outcomes (FP). This study addresses this gap by applying the complexity theory and offers multiple solutions to target different consumer types to predict high FP.

Navigating Brand Loyalty: The Dynamic Interplay of Engagement, Attachment, and Usage Patterns

Mobile electronic devices’ demand is greater than any other electronic device currently. This study aims to find the mechanism that creates Brand Loyalty through Brand Engagement in the context of the mobile industry, where market saturation makes it very difficult for organizations to gain it. This study determines the effectiveness of psychological drivers including Brand Awareness; Brand Image; Brand Psychological Ownership; and Value Congruity in developing Customer Brand Engagement, as well as to investigate the effect of Customer Brand Engagement on Behavioral Brand Loyalty through the mediating influence of Brand Awareness. The study also investigated the moderating role of Brand Usage Duration and the role of Usage Frequency between Brand Awareness and Behavioral Brand Loyalty. Customers' data was collected using an existing established questionnaire through convenience sampling, the public intercept sampling approach was used. The data was acquired from 384 respondents. The structure equation model method was used to analyze the data. This study demonstrated the effectiveness of consumer psychological motives in establishing Customer Brand Engagement that further leads to Customer Loyalty and reflects which element is more powerful. Further research indicates the impact of Brand Usage Duration on Customer Brand Engagement and Behavioral Brand Loyalty. All variables were proved to have a positive and significant effect except Usage Frequency. This research will assist Brand managers in determining which aspects are more influential in the growth of Customer Brand Engagement that further leads to Brand Loyalty. Study limitations and future directions have been provided at the end of the study.

Relationship Between Brand Awareness Levels, Brand Loyalty Behaviors, Brand Function Perceptions, Factors Influencing Brand Loyalty, and Preferred Criteria in Product Purchasing Among Secondary School Students Engaged in Sports

This research was conducted to determine whether there is a significant relationship between brand awareness levels, brand loyalty behaviors, brand function perceptions, factors affecting brand loyalty and preference criteria in product purchase in a sample of secondary school students engaged in sports. In the research, a relational survey method was employed. The study group consisted of a total of 250 students [n(male=185), n(female=65)] who were enrolled in high schools affiliated with the Konya Provincial Directorate of National Education during the first half of the 2019-2020 academic year and represented different sports branches (such as football, volleyball, basketball, handball, folk dancing, taekwondo, kickboxing, badminton, fitness, wrestling, fencing) at their schools or participated in competitions. The average age of the students participating in the research is 16.48±1.16. Brand Awareness Scale consisting of 5 statements and a single dimension, Brand Loyalty Scale consisting of 6 statements and a single dimension, Brand Functions Scale consisting of 14 statements and 3 sub-dimensions, Factors Affecting Brand Loyalty Scale consisting of 13 statements and 4 sub-dimensions and Preference Criteria in Product Purchase Scale consisting of 23 statements and 4 sub-dimensions were used as data collection tools. Relational survey model and convenience sampling method were used in the study. As a result of the research, it was determined that there are positive, medium and low-level significant relationships between the brand awareness levels, brand loyalty behaviors, brand function perceptions, factors affecting brand loyalty and preference criteria in product purchase of secondary school students engaged in sports.Keywords: Brand Awareness, Brand Function, Brand Loyalty, Secondary School Students, Sports Marketing

Increasing Customer Brand Loyalty for Hospitality Organizations Practicing Sustainable Marketing: A Case Study of Café Javas, Uganda

The purpose of this research is to discover the effect of sustainable marketing of hospitality services on consumers’ attitudinal and behavioral brand loyalty. Additionally, this research also aims to discover the mediating effect of brand trust and brand affect on this relationship. A combination of descriptive and causal research was used, for which data was collected from 582 respondents and processed using structural equation modeling to establish multivariate relationships. The process method was used to approximate mediation effects. A reasonably valuable insight that arose is the significant role that brand trust and brand affect play in engendering attitudinal and behavioral brand loyalty among consumers, for hospitality organizations adopting sustainable marketing practices. Findings revealed that sustainable marketing practices result in enhanced brand trust, which further translates into higher levels of brand affect, thereby leading to attitudinal brand loyalty and further resulting in behavioral brand loyalty. This study also highlights the importance of brand affect in developing enduring behavioral brand loyalty. Research limitations/implications – Consumers today are changing their consumption habits, preferring to satisfy ideological and symbolic needs rather than just rational needs. So, hospitality marketers practicing sustainable marketing should aim to leverage brand trust and brand affect to ensure lasting behavioral brand loyalty. The examination of the effect of sustainable marketing practices on brand-related variables in hospitality organizations has contributed to a better understanding of the mechanism that underlines the operation of emotion-based enduring loyalty. The vast majority of studies that provided insights about sustainable marketing practices and consumer behavior thereof were dominated by European and American perspectives and very few studies exist with a focus on developing economies such as Uganda.

The antecedent cognitions of brand love and its impact on brand loyalty: the moderating role of sustainability marketing

PurposeThis study aims to examine the moderating effect of sustainability marketing on brand loyalty of brands that advertise their sustainable development agenda goals. The study highlights the mediating effect of brand love having cognitive antecedents of brand authenticity, popularity and congruence with private and social self of the consumer.Design/methodology/approachA mall intercept survey was used to collect data from consumers who use brands that embrace sustainable marketing strategies. Only those brands were selected which are popular as well as advertise sustainable practices in their brand communication (mainstream and social media). The data was self-administered by trained research assistants, who gathered data from a sample of 350 respondents.FindingsThe findings revealed that the popularity and authenticity of a brand play an essential role in developing brand love and later influences brand loyalty behavior. A larger effect is seen on brand love when there is congruence of private and social self with the brand. The brand has even a stronger relationship with brand loyalty when moderated by sustainability marketing.Research limitations/implicationsBrand love has the potential for long-term influences, only if sustainability marketing is used as a backbone. Brand managers should target an authenticity-seeking segment of consumers, who once convinced can lead to repeat business and brand loyalty and reduce dissonance. As sustainability marketing provides multiple benefits, genuine branding strategies should be devised that amalgamate into a single message spun around sustainability concerns and connecting the ethos of authenticity, popularity and self-expression. Future research may take into consideration more categories than this study on clothing, and consumer goods, adopting a mixed-methods approach. Moreover, a range of potential antecedents of brand love can be determined along with potential outcomes when aligned with external efforts such as sustainability, corporate social responsibility and international investment.Originality/valueTo the best of the authors’ knowledge, this is the first study investigating the moderating role of sustainability marketing on the relationship between brand love and brand loyalty and the mediating role of brand love between brand authenticity, popularity, social/private-self-expression and brand loyalty. It is also the first study documenting how sustainability marketing reinforces the brand loyalty for popular brands in developing countries like Pakistan. This study fills a research gap as it expands the existing literature on sustainability marketing and brand love that is generally focused on brand dimensions and not the brand communications and thus has not reached similar results.

Patterns of buyer behavior and brand metrics in a “high loyalty” category: Liquor

AbstractThis study examines behavioral brand loyalty in a category that, based on industry evidence, is expected to exhibit high loyalty: liquor (distilled spirits). The study aims to extend knowledge of the factors that underlie behavioral loyalty, including brand characteristics of price level and promotion incidence, and buyer characteristics of age and income. Drawing on theory and evidence relating to prospect theory, the “smart shopper” concept, as well as literature pertaining to age and loyalty, we develop a series of hypotheses and test them using extensive consumer panel purchasing data for US households. The analysis confirms that liquor is indeed a high loyalty category in the context of consumer goods, evidenced via high share of category requirements (SCR). The study also identifies that liquor brands follow the double jeopardy pattern, whereby larger‐share brands enjoy somewhat higher loyalty, and that exceptions—brands with unusually high or low volume loyalty for their size—are related to high volume purchased per occasion. In turn, there is a strong negative association between brand price and high average volume purchased per occasion (i.e., cheaper brands are bought in larger quantity or volume than expensive ones). The study also finds that brands with a low price tend to be particularly attractive to low‐income households, and that, in turn, low‐income households exhibit higher brand loyalty. These new findings contribute to the literature on brand loyalty and the links between loyalty, brand characteristics, and demographics.

Customer Journey Value: A Conceptual Framework

Though firms are making substantial investments in the customer journey (CJ), the return on these investments remains tenuous, yielding a critical need for enhanced CJ-related accountability. Addressing this gap, we develop the concept of ‘customer journey value’ (CJV), defined as the perceived value of a customer’s journey to the customer and the firm, which facilitates the development of accountability in this regard. We also develop a social exchange theory-informed framework of CJV, which proposes customer- and firm-based customer engagement value (CEV) as core CJV antecedents. In turn, CJV is predicted to yield the customer-based consequences of attitudinal and behavioural brand loyalty and the firm-based consequences of enhanced customer lifetime value, as formalized in a set of propositions based on the framework. We conclude by outlining pertinent implications that arise from our analyses.

Effects of brand community social responsibility: roles of collective self-esteem and altruism

The social responsibility of brands and consumers within brand communities is a new phenomenon that can have important implications for brands, communities, and consumers. However, previous research on the relationship between brand community social responsibility (BCSR) and brands/communities is still in its infancy and the effects of BCSR are unclear. Based on the theories of social responsibility, collective self-esteem, altruism, and brand relationship, this study explores the effect of BCSR on brand loyalty behavior (i.e., purchase and recommendation intentions) to a brand community. The empirical results of partial least squares modeling reveal that BCSR is a new way of forming brand community commitment that enhances brand loyalty behavior (purchase and recommendation intentions). Moreover, collective self-esteem partially mediates the relationship between BCSR and brand community commitment, and altruism moderates the relationship between BCSR and collective self-esteem. The findings enrich the literature on social responsibility and brand community and point out the managerial implications.

How Attitudes Translate to Brand Loyalty: Examining the Antecedents and Consequences of Attitudinal and Behavioral Brand Loyalty

Brand loyalty has always been a complex phenomenon and the presence of digital technology is making it more challenging as consumers are well informed and demanding than ever. In such dynamic and challenging environment business firms should include the factors that help creating the brand loyalty. Little consideration has been made to “a detailed model” of brand loyalty, most of the earlier researches while examining the antecedents of brand loyalty have pin pointed few variables to explain the whole phenomenon. This research is an effort to investigate and overcome this vacuity. The reason of conducting this study is to inspect brand loyalty in depth and suggesting a detailed model of brand loyalty along with all of its possible antecedents and mediator. Both distinct elements of Brand loyalty are investigated together that is “attitudinal brand loyalty and behavioral brand loyalty”. All the antecedents of brand loyalty are adopted from existing marketing research literature, which included “Brand Commitment, Customer Satisfaction and Brand Perceived Risk”. Most important findings of this study are a) attitudinal brand loyalty impact positively on behavioral brand loyalty b) the effect of Brand Perceived Risk on behavioral brand loyalty is not direct, that is it effect through attitudinal brand loyalty. c) Attitudinal Brand loyalty mediates the impact among brand commitment and customer satisfaction on behavioral brand loyalty. All the findings are consistent with the proposed model. 450 questionnaires were circulated amongst the Karachi residents, out of which 389 responded. Data is examined with the help of SPSS. The study concluded the potential antecedents Customer Satisfaction and Brand Commitment as significant construct in brand loyalty as they have strong relation with attitudinal and behavioral brand loyalty. Results show a strong relationship among attitudinal brand loyalty and behavioral brand loyalty. This proposed brand loyalty model will be helpful for the Business firms.

A qualitative comparative study of Japanese fashion brands via profiling young shoppers

PurposeThis study adopts complexity theory to explore behavioural brand loyalty (BBL) development by investigating brand perceptional components and loyalty programs (LPs) in the Japanese fashion market through a qualitative comparative study. The authors address two research questions: (1) Under the potential influence of the COVID-19 pandemic, do brand perceptions and LPs contribute to young generation's BBL toward three types of brands with different scales of store numbers and prices? (2) If so, under what conditions do these factors positively influence BBL?Design/methodology/approachThis study considers the effects of complex factors and conditions on BBL formation by testing the asymmetric relationships that exist among brand perceptions, LPs, and BBL via fuzzy-set qualitative comparative analysis (fsQCA). The authors surveyed 751 Japanese consumers (aged 18–25 years) who had chosen 26 Japanese fashion brands as their favourites and participated in the LPs of those brands. The use of fsQCA supplements the existing research by explaining how causal variables affect BBL both positively and negatively.FindingsThe results (1) present multiple causal solutions in predicting high BBL by profiling young shoppers based on their psychological and behavioural characteristics; (2) show how causal factors and consumer characteristics work differently when developing BBL for different types of brands. The findings established that brand perceptions and LPs could affect BBL positively and negatively, depending on the characteristics of fashion brands and shoppers.Originality/valueThis study offers theoretical and practical implications in two main aspects: (1) the authors adopted a mixed methodology with quantitative and qualitative analysis to propose an integrated model that connects perceptional brand loyalty and LPs with BBL, based on three types of Japanese fashion brands; (2) the results offer multiple solutions for predicting the high level of BBL by profiling shoppers' characteristics, considering the impacts of the COVID-19 pandemic.

Event Engagement: Using Event Experiences to Build Brands

Companies invest considerably in event experiences; however, many are criticised for hosting events without understanding the full extent of their impact, or how to optimise their design. To benefit from event experiences, it is critical to consider not only how customers engage with the event, but also how event engagement transfers to engagement with the host brand to ultimately drive brand loyalty. This paper empirically explores the role of customer event engagement in facilitating brand engagement, within the context of branded marketing event experiences. Surveying attendees of such branded event experiences, six Australian wine brands, running 10 diverse events, agreed to collaborate in the research, yielding a total response of 274 participants. Results indicate that, for emotional, sensorial, pragmatic and relational experiences, event engagement fully mediates the relationship with customer brand engagement. Furthermore, it is the engagement with the host brand, rather than engagement with the event, that facilitates the effect on behavioural intentions of loyalty. These findings suggest that viewing engagement with a single focus (i.e., only event or only brand engagement) provides limited insight and does not uncover the true impact of event experiences; it is only through exploring the interrelationships between the engagement foci that we can truly understand how event experiences impact behavioural brand loyalty. This offers important managerial implications to facilitate engagement transfer (i.e., between event and brand), while drawing on associative network theory to explain how customer engagement spills over from the event to the brand and better account for the interdependence across engagement objects.

Investigating the antecedents of luxury brand loyalty for Gen Z consumers in India: a PLS-SEM approach

PurposeThis study aims to explore the antecedents related to luxury brand loyalty in the Indian Gen Z consumer segment. It obtains the connection between luxury brand attachment, luxury brand trust and luxury brand loyalty. The study also envisages how luxury brand trust plays a mediation role in strengthening the relationship between luxury brand attachment and luxury brand loyalty in the Indian Gen Z consumer segment.Design/methodology/approachThe empirical investigation is based on the Indian Gen Z consumer segment. Data was acquired with the help of a structured questionnaire, following convenience and snowball sampling techniques. A total of 230 primary responses was used for the statistical analysis of the present research. The analysis was carried out with the help of SmartPLS software to validate a proposed model and corresponding hypotheses.FindingsThe research findings demonstrate that two major branding outcomes support luxury brand loyalty behavior in the Indian Gen Z consumer segment: luxury brand attachment and luxury brand trust. Corporate social responsibility (CSR) attributes and sustainability attributes, luxury product attributes, luxury brand attributes and social media attributes positively influence luxury brand attachment in the Indian Gen Z consumer segment. CSR attributes and sustainability attributes have negligible contribution toward positively influencing luxury brand trust towards the same. However, when luxury brand trust is combined with luxury brand attachment, then luxury brand trust plays a significant role in enhancing luxury brand loyalty among the Indian Gen Z consumer segment. Then, luxury brand attributes, product attributes and social media attribute positively impact luxury brand trust in the Indian Gen Z consumer segment. The study also identifies that luxury brand trust plays a significant mediation role in consolidating the relationship between attachment and loyalty.Originality/valueThe proposed model in the research is an integrated framework comprising maximum potential variables that can positively influence luxury brand loyalty in the Indian Gen Z consumer segment. The analysis in the research shows the mediation role of luxury brand trust between luxury brand attachment and luxury brand loyalty in the Indian Gen Z consumer segment. This study has also identified the vital role of luxury brands’ CSR attributes and sustainability attributes to support luxury brand loyalty.

Ensuring brand loyalty for firms practising sustainable marketing: a roadmap

PurposeThe purpose of this paper is to explore the impact of sustainable marketing practices of firms on consumers’ attitudinal and behavioral brand loyalty. In addition, this study also aims to explore the mediating effect of brand trust and brand affect on this relationship.Design/methodology/approachA combination of descriptive and causal research has been used, for which data was collected from 582 respondents and processed using structural equation modeling to establish multivariate relationships. The PROCESS method was used to estimate mediation effects.FindingsA rather valuable insight that emerged is the significant role that brand trust and brand affect play in engendering attitudinal and behavioral brand loyalty among consumers, for firms adopting sustainable marketing practices. Findings revealed that sustainable marketing practices result in enhanced brand trust, which further translates into higher levels of brand affect, thereby leading to attitudinal brand loyalty and further resulting in behavioral brand loyalty. This study also highlights the importance of brand affect in developing enduring behavioral brand loyalty.Research limitations/implicationsConsumers today are changing their consumption habits, preferring to satisfy ideological and symbolic needs rather than just rational needs. So, marketers practising sustainable marketing should aim to leverage brand trust and brand affect to ensure lasting behavioral brand loyalty.Originality/valueThe examination of the effect of sustainable marketing practices on brand-related variables has contributed to a better understanding of the mechanism that underlines the operation of emotion-based enduring loyalty. The vast majority of studies that provided insights about sustainable marketing practices and consumer behavior thereof were dominated by European and American perspectives and very few studies exist with a focus on developing economies. This study attempts to fill this void by exploring the personal care market in India.

THE ROLE OF AFFECTIVE AND COGNITIVE RESPONSE IN MEDIATING THE EFFECT OF NEW PRODUCT DESIGN ON THE BEHAVIORAL BRAND LOYALTY OF LE MINERALE DRINKING WATER

This study aims to determine the effect of Le Minerale's new drinking water product design on consumer response and consumer loyalty. This study includes causal research, namely research that finds and describes a causal relationship between the Le Minerale retailer population. The data collection technique used the observational method by distributing questionnaires. Types and sources of data using primary data, validity and reliability are used to test the questionnaire. After the data is collected, the model test and hypothesis test are carried out. SPSS was used for data analysis. The results of this study, the new product design variable has a significant positive effect on cognitive response. New product design has a significant positive effect on affective response. Cognitive response and affective response have a positive and significant effect on behavioral brand loyalty. New product design has an effect on behavioral brand loyalty through cognitive response. New product design affects behavioral brand loyalty through affective response.

Intelligent Customer Experience and Behavioral Brand Loyalty: Empirical Evidence from the Commerce Environment

This research examines the association between intelligent customer experience (ICE) and behavioral brand loyalty through three connected constructs (i.e., customers’ satisfaction, brand trust, and brand attachment). A quantitative method was applied by conducting a questionnaire administered face-to-face to 302 French consumers who have used intelligent technologies during their shopping experiences. Employing PLS-SEM, the findings revealed that intelligent customer experience positively affects customer satisfaction and brand trust, which in turn positively impacts brand attachment. Additionally, the three dimensions of brand loyalty are all positively influenced by attachment to the brand. Theoretical and managerial implications, limitations and directions for further work are provided.

Factors that influence manufacturer and store brand behavioral loyalty

This study examines the factors that are linked to consumer goods brands having unusually high or low behavioral loyalty, after controlling for the association between brand size and loyalty that occurs due to the ‘double jeopardy’ effect. Behavioral, or repeat-purchase loyalty is measured as the brand's average share of category requirements (in volume) among its buyers over a 12-month period. We examine a range of factors that theory or past evidence suggests are associated with higher or lower behavioral loyalty, including brand type (store brand/manufacturer brand), price level, promotion intensity, as well as average brand volume per occasion and pack size. Using extensive US panel purchasing data, we find that store brands exhibit relatively higher behavioral loyalty than manufacturer brands. We explain the theory behind this result. We also find that the brand's average pack size and volume bought per occasion has a markedly positive association with behavioral loyalty. Finally, we find that the effect of low price on excess loyalty is moderated via a positive association with average volume purchase per occasion. These findings add to the body of knowledge relating to patterns in behavioral brand loyalty for both manufacturer and store brands, as well as the marketing-mix factors that influence it.

Can you represent me? The influence of consumers' self-congruity on their brand loyalty behavior

PurposeThis study aimed to verify the impact of consumers' self-congruity on brand loyalty behavior when stock-out happens; the role of the psychological reactance theory as a mediator was assessed.Design/methodology/approachData collection was carried out in the form of a questionnaire survey. Data from 417 respondents were analyzed, and structural equation modeling was applied to test the hypotheses.FindingsThe findings revealed the positive significant impact of consumers' self-congruity on their brand loyalty behavior, and the mediating effect of psychological reactance between self-congruity and consumers' brand loyalty behavior.Practical implicationsThis study offers retailers/brand owners a deeper understanding of the remedy strategy needed to reduce the sales loss in their firms when stock-out happens.Originality/valueThis study provides a theoretical and empirical test on the influence of consumers' self-congruity on their brand loyalty behavior, bringing consumers' psychological reactance into the research as a mediating factor, thereby enriching the existing research on consumers' out-of-stock reactions.

Customer lifetime value: investigating the factors affecting attitudinal and behavioural brand loyalty

PurposeThis paper investigates the factors affecting customer lifetime value from an attitudinal and behavioural brand loyalty perspective in the Internet service industry. Specifically, willingness to pay more and word of mouth are categorised under attitudinal loyalty, while repurchase intention is classified under behavioural loyalty.Design/methodology/approachA self-administered questionnaire online survey via Google Forms was employed comprising a sample of 481 participants from the Internet service providers. The partial least squares structural equation modeling (PLS-SEM) approach was applied for hypotheses testing.FindingsThe current study found that “brand credibility, special treatment benefits and confidence benefits had a positive and significant influence on willingness to pay more, word of mouth and repurchase intention, with confidence benefits and brand credibility showing as the greatest elements resulting in word of mouth and repurchase intentions, whereas special treatment benefits showing as the greatest element resulting in the willingness to pay more. The results of this study did not show any positive significant between service quality dimensions and true brand loyalty (word of mouth, willingness to pay more and repurchase intention). Results also found that confidence benefits, brand credibility and special treatment benefits had an indirect impact on true brand loyalty through customer satisfaction”.Practical implicationsInternet service providers should develop and maintain good relationships with their customers as the excellence of the customer–service provider relationship can enhance customer lifetime value.Originality/valueThe current work measured customer lifetime value in terms of both the behavioural and attitudinal aspects to represent loyalty, while most previous studies consider only one dimension for this representation. Particularly, customers' true brand loyalty is measured using separate components of repurchase intentions (RIs), willingness to pay more (WPM) and word of mouth (WOM) to deepen the understanding of both managerial interest and academic.

The effect of brand loyalty and loss aversion on competitive trade-in strategies

Trade-in promotions allow consumers to turn in old products and receive a discount for purchasing a new item. Firms usually price discriminate consumers based on their purchase history (i.e. new or existing customers). However, behavioural research has shown that consumers exhibit loss aversion and brand loyalty after consuming a product that may influence economic outcomes. This paper examines the impact of consumers’ loss aversion and brand loyalty behaviour on firms’ trade-in promotion pricing strategy, profits, consumer surplus, and social welfare. Contrary to prior game theory research that generally shows that price discrimination based on purchase histories eventually results in lower profits for all firms, we find that firms’ profits from conducting price discrimination can increase with consumers’ loss aversion behaviour. We consider two scenarios where firms recognise and do not recognise consumers’ loss aversion and brand loyalty behaviour. We find that the profit with behaviour recognition is higher than that without behaviour recognition under the condition that consumers’ loss aversion concerns are sufficiently strong. However, both loss aversion and brand loyalty decrease consumer surplus. Besides, consumers’ loss aversion and brand loyalty behaviour can increase social welfare because they can reduce inefficient switching.