Academic journal article Management & Marketing

Exploring Linkages between Socio-Demographic Factors and Customer Loyalty in India

Academic journal article Management & Marketing

Exploring Linkages between Socio-Demographic Factors and Customer Loyalty in India

Article excerpt

Introduction

India is an emerging economic powerhouse, and its middle class rising to prosperity. With more money power and multiple product offerings, today India is becoming a truly customer ]driven market. Marketers are hastily discarding old habits and adopting new notions of customer behaviour. The current marketplace is flooded with products and services, competing for mindshare and market share. Consumers face multiple options, and get to choose from a wide array of branded and unbranded products and services. What drives consumers to purchase a particular brand or product has always remained a point of debate with marketers. At the same time marketers are also realizing that it is becoming increasingly difficult to differentiate products and services from one another (Clark, 2006) in order to distinctly appeal to consumers.

It is in this scenario that Relationship Marketing entered the stage promising the newest passageway to the "holy grail" of marketing - customer loyalty (Shugan, 2005). Customer loyalty has become a vital strategy especially in the times of myriads of offers, where buyers have a tendency to move from one brand to the other. Loyalty is a measured capacity of how much a purchaser can be emotionally involved in a brand (Aaker, 1991). Whether repeat purchase is a result of a customer's loyalty to a brand (termed as brand loyalty) has always remained an unanswered question (Jacoby and Kyner, 1973). Researchers have been unable to conclude definitely whether repeat purchase is an unassuming habit or is simply a result of circumstantial convenience. Nevertheless in order to use an available customer retention strategy that is somewhat scientific and based on customer data, brands and their managers' focus on CRM.

Brand managers, product specialists and marketers concede that outcomes of CRM efforts are usually not commensurate with the quantum of resources they invest in the efforts. Of the four Ps in marketing consumers in general are more conscious of price (Anselmsson et al., 2007). Given the value-driven nature of Indian consumers, who are extremely price-sensitive and tend to shiftbrand loyalties easily if competitive pricing strategies are followed by products, the relationship between brand loyalty and competitive factors becomes important. Though the brand-price association is a vital ingredient in retaining the loyalty of customers (Kumar, 2008), over the years it is not just the price but a whole range of demographic factors that have influenced loyalty. This is despite the fact that currently purchase decisions are taken rather based on pricing than on loyalties, as is evident in today's plethora of retail promotions seen in the media every day.

The question in the intensely competitive market is: "Is the brand-price paradigm sufficient to understand loyalty?" The answer is no. The more obvious answer is to understand changing-like-never-before socio-demographic factors of customers across all Socio Economic Classifications (SECs). Rubera and Eisingerich (2010) acknowledge that more affluent and better educated customers are less likely to be committed to a specific brand. Commitment of less affluent consumers to the brands they use is often unusually strong, possibly because they cannot afford to take the risk of trying a brand that might not suit them as well. However younger consumers are less committed to brands than older consumers (Clark, 2006). This implies that consumer demographics play a large role in determining loyalty. In addition, nowadays consumers have more disposable income than they had earlier, prompting them to explore multiple avenues to spend, or buy newer products. The axiom seems to be: buy more rather than buy better. This has spawned offan entirely new generation of consumers for whom loyalty is merely a word, not an attitude. The way to understand this conundrum is to perhaps take the socio psychological route which offers glimpses of customers' evolving behaviour patterns, based on the multimedia stimuli they are exposed to everyday. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.