Investigating the Effects of Brand Identity on Customer Loyalty from Social Identity Perspective

By Shirazi, Ali; Lorestani, Hanzaleh Zeynvand et al. | Iranian Journal of Management Studies, July 2013 | Go to article overview

Investigating the Effects of Brand Identity on Customer Loyalty from Social Identity Perspective


Shirazi, Ali, Lorestani, Hanzaleh Zeynvand, Mazidi, Ahmadreza Karimi, Iranian Journal of Management Studies


(ProQuest: ... denotes formula omitted.)

Introduction

In traditional economic literature, labor, capital, and land are three fundamental production elements and are regarded as the main sources of wealth and value creation; however, it cannot explain how a product with the same efficiency, quality, and features is sold at the price three times the competitors' products. New marketing approaches explain this phenomenon by the identity that different brands provide for their customers. One of the desirability criteria for customers to select a product is a valid brand. In numerous markets, brand creates a unique identity for a product and connects it to a specific group of target population. In psychological perspective, this type of products, in addition to their apparent applications, positively affects customer self-esteem and dignity. For this reason, a customer would prefer to pay higher prices. Further, superior brand unconsciously means better quality and more satisfied customers. The customer believes that by purchasing a brand product, more money is paid in exchange for higher added value. In other words, like capital, technology, and raw materials, brand plays a role in creating added value and both customer and organization utilize the benefits of the brand. When a customer uses a brand product for the first time and feels happy and satisfied, his/her tendency will be increased to purchase products of the same brand again in the future. In addition, firms do not need to spend valuable resources on extensive promotional efforts, since loyal customers are motivated and eager to pay higher prices to gain benefits of their desired brand. Thus, brand loyalty plays a critical role in creating long-term benefits for the organization.

Researchers have identified several factors affecting brand loyalty, including trust (Harris & Goode, 2004; Morgan & Hunt, 1994), customer satisfaction (Garbarino & Johnson, 1999; Oliver, 1999; Reibstein, 2002), and perceived value (Peterson et al., 1997; Sirdeshmukh et al., 2002; Sweeney & Soutar, 2001; Van Riel et al., 2001). It should be noted that most of these studies have been conducted with respect to economical aspect of brand and are based on B2B framework (Arnett et al., 2003). Given that customers have a choice to select from numerous brand alternatives, considerable attention is given to brand identity and how it affects customer satisfaction and loyalty. Bhattacharya and Sen (2003) argue that customers reflect and reinforce their identities through brand identification and the relationships that are built along with it. Therefore, when customers highly value the quality of a brand and competitors can easily imitate and copy the firm products, the necessity of creating a strong brand identity to gain brand equity seems highly important and desirable (Geuens et al., 2009).

However, despite efforts to study the effect of social identity (brand identity and brand identification) on loyalty, such as He & Li, (2011) and Marin et al. (2009), it seems that the existing literature is not extensive or rich enough to reveal the different aspects of this relationship. The purpose of the current study is to enrich the literature on brand management by investigating the effects of social identity on brand loyalty and its association with traditional factors affecting loyalty in a B2C context.

Theoretical Background and Conceptual Model

The concept of social identity has long been studied by psychologists and sociologists. The subject in recent years has gained impetus in the field of organizational behavior and human resource management (Gioia et al., 2000). Social identity is basically the sense of unity constructed between individuals (Ashforth & Mael, 1989) and it occurs when an individual is identified with a particular group. Individuals attending in a group define themselves in relation to this group and distinguish themselves from the others (Tajfel & Turner, 1986). …

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