An Analysis of Customer Loyalty Based on Brand Value

An Analysis of Customer Loyalty Based on Brand Value: A Case of Brand Operations of Apple

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nIntroduction

nCustomer loyalty is very important in the market because it helps the company to improve its competitive plans and safeguard its market share. The loyalty based of the brand value is a main concern of many companies since it establishes competitive advantages in the market among rivals. Most importantly, brand value enables the company to distinguish their products and services (Chen and Ann 2016). In this regard, the loyalty of a brand is considered one of the critical ideals that develop and strengthen brand name. It also helps the company to improve its profits.

nApple Company Brand Value

nSince Gerald Wayne, Wozniak Steve and Paul Jobs formed Apple Inc. in 1976, it has strived to promoted customer loyalty for its brands. Research by Forsido (2012) indicated that the company market, manufacture and designs for personal computers and other products such as mobile and computing devices, paying close attention on customers needs in order to strengthen their brand loyalty (Forsido 2012). Some of the services and products of the company include Xserve, Apple TV, iPod, iPad, iPhone and Macintosh computers as well as iOS operating system, and software applications. Additionally, via the iTunes Store, the company also offer digital content in the third party system. In the international market, it offers its products via direct stores, online sales and retail stores (Apple Inc. 2016).

nJinjin (2013) argue that branding refers to a design, symbol, sign, term and name or an arrangement of all these that provide identification for services and goods of a single company and distinguish them from others. A brand helps the customers to differentiate and choose products and services of one company over their rivals in business (Jinjin 2013). On the other hand, it enables the company to provide products that solve the problems among the consumers (Bojei and Hoo 2012). According to Kaur (2015), brand loyalty also offer trustworthy and recognizable symbol of originality in the company, which represent intangible assurance. In this respect, the customers are guaranteed proper performance of the products and services, which are able to satisfy their expectation and needs (Kaur 2015).

nA research by Gallo (2012) indicated that Apple Inc. applies its brand to contest in various market files such as industry of personal computers and other software. Moreover, in this industry, the company uses brands such as Macintosh to promote its products such as laptops and computers (Gallo 2012). Similarly, in the electronic industry, it enhances customers loyalty through brands such as iPods and the smartphone market via Apple iPhone. Furthermore, the company also uses AppsStore to provide various applications, games, computing devices, books and magazines in the iPad and iPhone tablet content. Similarly, Apple TV is used to distribute TV content, and movies (Apple Inc. 2016).

nA study by Chen and Ann (2016) noted that brand loyalty command the attention of consumers since they are characterized by trust, intensity, differentiability and saliency. Apple conveys a strong brand, which promote reliable message and formulate an emotional connection between the product and customers (Chen and Ann 2016). The findings of this study was consistent with Huimin and Hernandez (2011), who argued that a brand loyalty is the overall emotional outcome that is possessed by a consumer towards the products or services of a certain company (Huimin and Hernandez 2011). Therefore, the brand serves as an experience that is fixed in consumers mind. The experience is normally developed via interaction with the products or services (Constantin and Stoenescu 2014). When a consumers experience is not consistent with the organizations illustrations in its brand, the firm is likely to lose its customer. Therefore, it is very essential for an organization to prioritize the relationship between the customer and the brand (Kapferer 2012).

nAdditionally, it should utilize critical items such as colours, mission statement, advertising campaigns and logos to strengthen this experience and relationship (Saviolo and Marazza 2012). Apple Inc. benefits from a robust brand in terms of high volume of sales and formulation of abundant awareness (Lazonick, Mazzucato and Tulum 2013). More importantly, a robust brand loyalty establishes a long-term loyalty and relationship between the customer and products, which promotes the services and products. In addition, in some instances, Apple Inc. is able to provide its products using premium pricing (Kaur 2015). Since Apple Company has robust brands, it benefits from dedicated employees who are loyal to the brand and believe in it. Similarly, a robust brand is the most valuable asset of the company that can strengthen its balance sheet. A study by Forsido (2012) pointed that since Apple is a powerful brand it is worth more than $90 million hence it is vital to protect Apple brand (Forsido 2012).

nApple Inc. Brand Equity

nAs noted by Lazonick, Mazzucato and Tulum (2013), brand equity is one of the organizational strategic assets that offer long-term competitive edge. Brand equity features both liabilities and assets that connect a certain brand such as logo or name. It constitutes the perceived quality, brand assets, brand association, brand awareness and brand loyalty. Most companies face the biggest challenge of formulating unique, favourable and robust brand association (Lazonick, Mazzucato and Tulum 2013). Robust brand is characterized by unique, favourable and strong relationship between the customer and the brand. Segal (2012) argued that powerful brand equity is composed of four assets, which are categorized into brand association, Perceived Quality, Brand Loyalty and Brand Awareness. The scholar also suggest that brand equity establishes the customers and firms value. Nonetheless, brand equity should demonstrate and connected by the symbol and name of the brand (Hess, Jackson, Reimer, Weller and Pike 2016).

nResearcher such as Kaur (2015) suggests that a powerful brand has the capacity to facilitate price premiums. On the contrary, cannot facilitate an excessive premium on pricing. These arguments points out that brand equity is a valuable benefit in an organization. In addition, it can be either negative or positive. Positive brand equity occurs when a firm meets the needs and expectations of it consumer (Kaur 2015). In this regard, it can be achieved via effective and efficient advertising. On the other hand, negative brand equity is normally established from poor management. Positive brand is an important factor, which prevent possible competitors from entering the market. Furthermore, Jinjin (2013) argued that brand equity offers an opportunity for the organizational growth in the future. Customers are able to remember and notice a brand that is constantly advertised. Therefore, advertisement safeguards and nurtures the brand (Jinjin 2013).

nAccording to Chen and Ann (2016), many customers are willing to pay a higher price for goods and services if the brand is strong. Additionally, brand equity features such as reputation, trust, and image and brand awareness are carefully developed over a long period (Chen and Ann 2016). Gallo (2012) also proposed that branding needs long-lasting engagement from the company as well as skills and resources. Brand equity in Apple Inc. integrates a variety of advantage such as premium pricing, leverage of business, brand loyalty, lower marketing sales ratio, and capacity to entice more customers (Gallo 2012).

nThe brand of Apple Inc. enables its customer to minimize the costs of search for services and products. Additionally, it assists the consumer to make quick decisions on the quality of the product and its features (Vazifehdoost, Rahnama and Mousavian 2014). Therefore, Apple customers are able to develop a rational expectation regarding the quality of the brand. Apples brand delivers particular standards of quality that enable satisfied customer to buy the product in future. The organizational brand equity provides assurance on the earning of the company in the future (Segal 2012). It is a precious asset in the company, which can also be represented in the balance sheet.

nApple Inc. Brand Loyalty

nJohnson, Li, Phan, Singer and Trinh (2012) argued that brand loyalty refers to behavioural outcome, which determine the level of repeat buying. It encompasses the ability of the customer to stick with the product hence declining other products in the market (Johnson, Li, Phan, Singer and Trinh 2012). Robust brand equity promotes customers loyalty since they appreciate the brand based on what it stands for or represent (Forsido 2012). Brand loyalty is credited to brand equity and image. Most significantly, the commitment of the brand is the considerable demonstration of the preference and trustworthiness of the brand (Kane and Sherr 2011).

nA study conducted by Coget (2011) noted that brand loyalty determines the level of attachment of the customer to a certain product. It also assesses how easily a customer can changer his/her commitment to other brands when either features or prices changes. Most of the Apple Inc. products are effective in establishing a powerful brand loyalty (Coget 2011). Many customers across the globe are loyal to Apple based on the brand value.

nA survey conducted in the United States in 2012 indicated that Apple Inc. products had a strong brand loyalty among its customers. The survey compared the brand loyalty of Apple Smartphones as relative to its competitors such as Samsung. Based on the findings of this study, more than 84 per cent of customers using iPhone indicated that they would stay with the product as compared to 65 per cent of users of Samsung (Johnson, Li, Phan, Singer and Trinh 2012). Additionally, only 4 per cent of iPhone users suggested that they would purchase Samsung Galaxy next. Conversely, 10 per cent of Samsung users suggested that they would change to Apple iPhones in the future (Keller, Parameswaran and Jacob 2011). In addition, the study noted that the demand of iPhones from the consumers was high especially for smartphones with huge flash memory (Kaur 2015). However, these products were very costly and they provided huge margins for profits for the company (Chen and Ann 2016). Most notably, the Apple customers are willing to pay more for these products.

nFurthermore, in this study, the findings indicated that more customer choose to purchase iPhone models because they had longer battery life as compared to their competitors. Other features of the models that attracted customers included high-resolution camera and powerful processor (Huimin and Hernandez 2011). The study indicated that Apple Inc. has flourished in establishing a powerful brand loyalty because many customers are loyal to their brands. Consequently, many are willing to buying their new products such as iPhone 6 (Aaker and Joachimsthaler 2012).

nAccording to Vazifehdoost, Rahnama and Mousavian (2014), Apple has numerous customers across the world hence it has the largest market share in many countries. For instance, in 2012, research indicates that in Smartphone industry, Apple had 89 per cent in market share. Moreover, the study sought to determine the customer retention rate in the smartphone industry (Vazifehdoost, Rahnama and Mousavian 2014). The results highlighted that most of the Apple customer (89 per cent) were willing to stick with smartphone models from this organization. As compared to other companies such as Samsung and Blackberry, products from Apple Inc. were the first in terms of customer retention rate (Forsido 2012). In this regard, this means that Apple had best customer satisfaction and loyalty.

nScholars such as Vivek, Beatty and Morgan (2012) noted that there are five stages of brand loyalty. Additionally, every level has diverse asset and challenge to organizations. The lowest stage is the non-local consumers who lack any favourite brand. This group of consumers lack any value to the brand symbol or name. Therefore, the brand value does not influence their decisions when buying products (Vivek, Beatty and Morgan 2012). The second stage encompasses consumers who are pleased or satisfied with a certain brand. The groups of consumers is susceptible to other products from rival company who produce better products hence they are likely to switch (Jinjin 2013). Therefore, this group of purchasers is regarded as habitual consumer.

nThe third group of consumers is satisfied with a certain brand. However, this group of purchasers are more likely to buy other brands when rival company offer better prices that attract more customers (McDonald 2012). Moreover, the fourth group of customers encompasses buyers who have high standards of loyalty to a certain brand (Gallo 2012). They are more satisfied with company logo, prior experiences and the brand name and symbol. The highest group of consumers include persons who are dedicated to the brand. They are more interested because of the functionality of the brand. They also identify themselves with the brand (Johnson, Li, Phan, Singer and Trinh 2012).

nBrand Awareness

nAccording to Aaker and Joachimsthaler (2012), brand awareness refers to the level of understanding of the customer towards a certain brand. It is the level of association of the customers with the brand (Aaker and Joachimsthaler 2012). More importantly, it refers to the power of presence of the brand in the mind of the customer. It can be determined by the ability of the customer to acknowledge it, recall it and maintain it in his/her mind. Baroto, Abdullah and Wan (2012) argued that brand recognition depends on the type of knowledge acquired from previous experiences, which play a crucial role in brand remembrance. Due to this factor, more customers are able to recover from their memory when they come across a product of that category (Baroto, Abdullah and Wan 2012). Therefore, it should be easy to differentiate the brand name from other product. Lazonick, Mazzucato and Tulum (2013) study noted that it is a major challenge to establish brand awareness since more purchasers come across many message and brands. The study also concluded that companies should strive to ensure that customers recall their brands for positive reasons rather than for negative ones (Lazonick, Mazzucato and Tulum 2013).

nApple Company is one of the leading organizations in terms of powerful brand awareness. A research conducted by Gallo (2012) highlighted that more than 90 per cent of purchasers in the United States are aware of Apple brands. In this regard, the organization has a big opportunity to provide a wide range of products to its customers (Gallo 2012). Subsequently, more customers are likely to select Apple brands as compared to competitors products since the brand awareness is high (Khan, Alam and Alam 2015). It will also promote the company to increase its market share. Huimin and Hernandez (2011) argued that one of the successful tool of awareness in Apple Inc. Is brand logo. In this respect, its design is simple and smart, which play an important role in brand recognition in the market. The researcher also noted that the Apple brands are easy and effective to recall among the customers (Huimin and Hernandez 2011).

nThe development of current Apple logo has been done through phases. At the initial stage, the logo was developed to include the colours of the rainbow, which reflected the new colour formation in the Information Technology sector (Coget 2011). However, the current logo of Apple reflects the best product quality and is easy to identify and understand. According to Kaur (2015), Apples campaigns on brand, identification has helped them to acquire massive awareness of its brands among its customers. It also helped to establish effective brand reputation and image. More significantly, it facilitates more sales of its products in the market (Kaur 2015).

nBrand Identity

nAccording to Gallo (2012), brand identity is formed by six features, which create a hexagonal prism. Brand identity encompasses factors such as self-image, reflection, relationship, personality, culture and physique. However, these factors are inter-dependent creating a structured unit. Brand identity is important for any organization because it demonstrates the power of that brand. The physique aspect represents the physical dimension of a certain brand. It also represents a tangible aspect of the brand, which can be remembered by customers when the name is mentioned (Gallo 2012). On the other hand, culture is also important aspect of brand identity. A brand delivers a certain culture (Segal 2012). In this case, it expresses the culture of the organization and its products. Furthermore, it is a means of communication, which connects the organization to its brands (Vivek, Beatty and Morgan 2012).

nThe brand identity of the company has also been enhanced through unique Apple products in the market. For instance, the iCloud offer a unified experience for sharing and utilizing content across all its products such as Mac, iPad, iPod, and iPhones (Phillips-Melancon and Dalakas 2014). Through this innovation, the company aims to compete effectively with other companies such as Google, Microsoft and Samsung. The designing of an apple logo played a key role in promoting brand identity, which facilitated competitive advertising and marketing efforts. More significantly, the brand identity has enabled Apple to establish strong ties with its customers (Bleijerveld, Gremler and Lemmink 2015). The success of the brand has been based on the ability of the company to establish closer connections with customers. Consequently, it instilled trust and honesty among its customers. Similarly, employees are willing to help customers in case of a problem (Polat, Pfoertsch, Nergis and Akgun 2016). Subsequently, they are able to establish brand loyalty.

nRelationship aspect of the brand demonstrates the manner in which the brand associates, and provides service to customers. Therefore, it signifies the exchange between the product and consumers. In the personality dimension, individuals normally, assign brand with some characters (Coget 2011). Therefore, it communicates some traits that are unique to the products. Reflection dimension of the brand replicates a person who utilizes it. Moreover, it imitates the consumer who intends to be viewed because of utilizing the brand. Therefore, individuals utilize the brand to establish self-identity. In terms of self-image, the brand provides an association in the inner self of human being, which is developed via attitude towards a particular brand (Vazifehdoost, Rahnama and Mousavian 2014).

nApple Brand Personalities

nBaroto, Abdullah and Wan (2012) conducted a study among 2500 people who included student and professionals across the group. The researcher inquired from the participants, who brand in the smartphone industry provides highest inspiration to them. The study findings noted that Apple brands had the higher rate at 25 per cent in terms of customer inspiration. Apple also was ranked one of the best brands because the customers wanted to be associated with the brand due to its importance (Baroto, Abdullah and Wan 2012). Aaker (2012) argued that the branding approach utilized by Apple concentrates on feelings and emotions. In addition, the brand personality focuses on aspirations, innovation, imagination, dreams and lifestyle (Aaker 2012).

nThe strategy used in branding is intends to stimulate the customers emotions and experiences. In this regard, the brand pay close attention on lifestyle, aspirations, dreams, hopes, passion, innovation, acquired liberty and imaginations via technology (Pinson and Brosdahl 2014). Furthermore, the brand aims to enhance simplicity in the lives of its customers. Its product designs are determined by the needs of their people. Based on these merits, the brand has positioned itself in the market to be a beneficial product to its customers as they try to meet their goals (Pappu and Quester 2016). Apple brands utilize ergonomics qualities, innovativeness, and attractive design that assure quality.

nThe firm has also ventured into music business through iTunes and iPhones. The strategy here was to utilize music to assist in enhancing attractiveness of the products in computing businesses. Moreover, it utilizes iPhones, iTunes and iPads to strengthen and re-energise the personality of its brands (Cant, Machado and Seaborne 2014). Initiatives introduced by the company have played a crucial role in meeting the demands of customers as well as safeguarding their safety. For instance, it has introduced Apple halo effect, which was intended to increase the interests of customers towards its computer products. Reports noted that halo effect has generated significant increase in terms of market shares and sales of computers. Moreover, this innovative strategy has led to rise in demand for products such as iPad tablet computers (Kumar, Townsend and Vorhies 2015).

nSimilarly, via technology, the brand promotes liberty and power to their customers. The personality of apple brand is also focussed on complexity elimination and simplicity of the lives of the people (Kane and Sherr 2011). In addition, Aaker and Joachimsthaler (2012) noted that the product design of the Apple brands is promoted by the needs of the people aiming to strengthen the connections between them. Furthermore, Apple has established a powerful brand that signifies stylish expertise in its products. Its main value symbolizes stylishness, and innovation in brands, which enhances the simplicity of use (Aaker and Joachimsthaler 2012).

nSubsequently, it plays a vital role in the brand image. Most notably, the robust brand that is created by Apple provides massive customer loyalty (Tavassoli, Sorescu and Chandy 2014). According to Huimin and Hernandez (2011) Apple is identified as a lifestyle firm although it products are in technology sector. Therefore, brand identity is very important in the future success of the firm. The research also suggested that brand personalities include a number of human features related to a specific brand. Some of these features include sentimentality, social class, age and gender (Huimin and Hernandez 2011). Therefore, individuals are likely to relate with the product in the similar way they do with other people.

nIn other words, the review of literatures on the customers loyalty based on the brand value on Apple brands indicated that the organization produces strong brands in the market as compared to its competitors (Gallo 2012). Consequently, the organization benefits because of higher sales of its brands and high retention rate of customers (Warraich, Awais, Amin and Parkash 2014). Apple brands are ranked as one of the leading brands in the world in terms of customer satisfaction and loyalty.

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