Academic research into brand loyalty and/or consumer loyalty dates back more than 40 years (Shugan, 2005). According to Jacoby and Chestnut (1978), the study of brand loyalty extends back even further to Copeland’s (1923) study of a phenomenon which he termed
“brand insistence.” Jacoby and Chestnut (1978) noted that two important aspects about brand loyalty measurement are generally considered. The first concerns the level at which brand loyalty is measured (micro or individual level vs. macro or aggregate level). The second assumption concerns the data used to measure brand loyalty. Jacoby and Chestnut (1978) additionally distinguished three approaches to data: behavioural data, attitudinal data, and composite, or a combination of both behavioural and attitudinal. Their review also suggested that a large number of approaches have been used in defining brand loyalty, as they determined different operational definitions of brand loyalty existed. This suggests some divergence in opinion of what constitutes brand loyalty, and how it should be measured.
2.6.1.1 Behavioural Elements
The earliest approaches to loyalty measurement were based on consumer behaviour, either actual purchasing behaviour or reported purchasing behaviour. Behavioural brand loyalty can be defined as a customer’s covert behaviour toward a specific brand in terms of repeat purchasing patterns. A repeat purchasing pattern can be defined as actual purchase
frequency, the proportion of occasions on which a specific brand is purchased as compared to the total number of purchased brands and/or the actual amount of purchase. Numerous brand loyalty researchers have used this approach by simply measuring these behavioural variables to predict the customer’s purchasing behaviour in the future (Ehrenberg, 1991;
Lipstein, 1959; and Kuehn, 1962). Jacoby and Chestnut (1978) suggested that the behavioural approaches can be further subdivided into five types:
Brand purchase sequence
Brand purchase proportion
Brand purchase probability
Synthesis measures
Miscellaneous measures
These aspects are examined below.
Brand purchase sequence
Brown (1952) classified loyalty into four categories based on purchase sequence:
Undivided loyalty
Divided loyalty
Unstable loyalty
No loyalty
Based on the purchase patterns of consumers, he proposed four purchase sequences for these categories, namely, undivided loyalty = purchase sequence: AAAAAA, divided loyalty = ABABAB, unstable loyalty = AAABBB, and irregular sequences =ABBACDB.
Other authors (Tucker, 1964) suggested the three-in-a-row criterion, in which customers are classified as loyal when they have bought the same brand three times in a row. Southwest airlines uses this as a measure of customer loyalty, adding that “after flying with us three times a customer is unlikely to “defect” (Heskett et al., 1997) Another measure put forward has been the number of “brand runs” (Massy et al., 1968), brand run being defined as the consecutive sequence of purchase of the same brand. The average length of brand run has also been proposed by Massy as a way of measuring brand loyalty.
Brand purchase proportion
The proportion of purchases of a specific brand as compared to all purchases has been used by a number of authors (e.g. Brown, 1952; Copeland, 1923; and Lipstein, 1959) as a measure of brand loyalty. A number of different cut off points have been proposed to determine real loyalty, ranging from the exclusive purchase which means the consumer purchases the brand 100% of the time to about a 50% purchase share showing disparity in measurement using this method. Thus, as an extension to this measure, authors such as Cunningham (1956) extended the concept of one-brand loyalty to dual-brand or triple-brand loyalty, with loyalty defined as the percentage of total purchases devoted to the top two or three brands.
Brand purchase probability
A similar argument is reflected in work by those who used probability models to predict future purchase behaviour based on a series of previous purchases. Frank (1962), for example, showed correlations between both the number of previous purchases within a purchase sequence as well as the location of these purchases within the sequence and the probability of a future repeat purchase. Effectively, his study indicated that the more often a consumer had purchased the same brand within a purchase sequence as well as the more recent the purchase of that particular brand, the higher the probability he would repurchase that brand.
Finally, the loyalty indices involved a composite measure of several behavioural
components, such as brand expenditure share, switching behaviour, and number of brands available.
Pritchard, Howard and Havitz (1992) hold that studies solely using behavioural brand loyalty do not exhibit an understanding of the factors underlying and leading up to brand loyal purchasing. Other arguments of behavioural studies include
(1) “providing arbitrary cut off criteria;
(2) failing to assess the complexity and richness of brand loyalty;
(3) focusing on the outcome of behaviour and not developing definitions that reach at the underlying causative factors” (Jacoby and Chestnut, 1978).
Several researchers (Bowen and Chen, 2001; Jacoby and Chestnut, 1978; Stern, 1997) discussed the need to combine behavioural and attitudinal aspects of brand loyalty and develop measures of brand loyalty accordingly to introduce the psychological aspect of purchase behaviour. Such studies have described brand loyalty as not only an outcome of repeat purchase behaviour but also as a consequence of multidimensional cognitive attitudes toward a specific brand.
2.6.1.2 Attitudinal Elements of Loyalty
As previously noted, the inclusion of an attitudinal construct is necessary as some
researchers (e.g., Day, 1969; Jacoby and Chestnut, 1978) have suggested that a behavioural definition alone does not distinguish between true loyalty and spurious loyalty. Spurious loyalty may result, for example, from a lack of available alternatives for the consumer. The latter type of buyers may lack any commitment to the brand but simply buy because of time convenience, monetary rewards, lack of substitutes or lack of information on substitutes, and psychological or monetary costs of discontinuation or switching to another brand. A recent white paper from Nokia on mobile loyalty defines the most loyal customer through purchase frequency alone, failing to consider a customer’s attitudinal aspect. The white paper shows that people who use services more frequently are more prone to changing providers, whereas 10% of customers who use services least often are classified as the most loyal. Thus, Nokia may be mistaken in their definitions in not distinguishing between true and spurious loyalty, in that the customers who use mobile services the least may be more likely to be loyal as they are not aware if the alternatives available. Taking into account such behavioural aspects alone still does not give a clear picture of what aspects affect customer loyalty. Attitudinal, as opposed to just behavioural components need examining as well.
Dick and Basu (1994) argued that a solely behavioural approach neglects the importance of the customer’s decision-making process, and does not differentiate brand loyalty from simple repeat purchasing behaviour. In response to these criticisms, researchers have proposed measuring loyalty by means of an attitudinal dimension in addition to a
behavioural dimension. One of the earliest uses of attitudinal measurement approaches was Guest’s (1942) “brand preference,” whereby consumers were judged to be loyal to the brand that they named. Later, Guest (1955) suggested that such a positive (preferential) attitude needs to persist over time. Further research supporting attitudinal aspects have described brand loyalty not only as the outcome of repeat purchase behaviour but also the consequence of multidimensional attitudes toward a specific brand (Peter and Olsen, 2001;
Jacoby, 1971).
Attitudinal brand loyalty focuses not only on transactional strategies, such as frequent-user programs and gifts for repeat customers but also on attitudinal variables, such as
commitment and trust. Muncy (1983) argued that most attitudinal measurement has been developed based on operational definitions rather than a theoretical conceptualization of brand loyalty; therefore, the attitudinal measurement lacks construct validity. Muncy (1983) continues that many attitudinal factors are derived from brand loyal consumers’ attitudes or dispositions, such as commitment, involvement, motivation, and other cognitive and
affective variables. However, the process of selecting those variables was operationally, not theoretically, based. Hence, the risk of low construct validity may be to a researcher’s inability to assess all these person-specific features.
A number of different attitudinal loyalty measures have been proposed, but Pritchard, Howard, and Havitz (1992) suggested that psychometrically sound instruments to measure attitudinal loyalty were still missing. As Jacoby and Kyner (1973) stated, loyalty is a biased behaviour expressed over time by an individual with respect to one or more alternatives and is a function of psychological processes. Therefore, neither behavioural measures nor attitudinal/ cognitive measures alone are sufficient to assess brand loyalty. Like other types
of measurements, several risks exist within the measurement of these behavioural and attitudinal elements which may comprise loyalty, such as improper multiplication of attitudinal and behavioural attributes, selecting inadequate items, neglecting the impacts of significant intervening variables, and lack of underlying theoretical supports (Pritchard et al., 1992). Therefore, one of the major tasks of researchers has been to better understand the relationship between attitudinal and behavioural brand loyalty. Pritchard et al. (1992) hold that such improved understanding enables the development of an effective commitment brand loyalty measurement through the establishment of a strong conceptual and theoretical foundation and the construction of an effective research methodology to refine
measurement.