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Literature review
This chapter introduces the relevant literature review on the theme. Firstly, the paper presents the importance and meaning of brand values and its’ alignment with customer’s loyalty. Secondly, the theme about brand community is developed. Then it reveals how brand owner and brand communities interact mutually and, finally, underlines the connections between customer’s loyalty and perception of a brand.
The reason to select this particular literature enables to dig deeper on the research area concepts and get a broader view on the brand and brand loyalty, brand values, the brand community, non-community members3, representatives’ perspective and communication channels in order to form the relevant conceptual framework. The general concepts to be used in the study are brand community, brand values, communicational channels and loyalty. Brand community is the place where members exchange the important information about a brand and have a “relatively strong degree of commitment” to a brand (Muniz & O’Guinn, 2001). Brand and brand values, being a core stone of the community, play the essential role in daily life. Advocating these values brand community members interact with non-community members and brand owners while in different ways influencing the clients’ loyalty and knowledge about a brand. Information is transmitted through variety of internal and external communication channels.
Brand and brand values
Brand associations arise through perceptions and experiences in the clients’ mind. It has become a lifestyle (Basaran et al., 2011) and does not reflect only the logo what shows “functional value of the product” (Schembri, 2009). The definition of brand associates with the collection of meanings in heads and hearts about product or service. The following illustrations of well-known brands as Apple, BMW, Prada, Nike and etc. reveals the brand as a symbol of status and “iconic symbolism” (Schembri, 2009). Brand stands as the origin through which buyers discuss and interact. The core messages brand communicates are “why” and “what”. Brand answers the questions as: why companies try to achieve what drives the clients with complete desire; why brand is reliable, affordable and flexible to meet consumers’ needs (Belk, 1988; Ramaswamy, 2008). Moreover, what the audience perceives about company’s product or service and what organizations try to report in this way (Firat & Venkatesh, 1995; Fournier, 1998; Holt, 2002)?
Branding, essentially, is the way how the ownership of brand is managed, experiences and perceptions are controlled. Most commonly, it is about morals, values, vision, goals, strengths and weaknesses, direction, plans and strategy thus attracts customers (Kay, 2006; Klink, 2003). They have believes in the things what organization is doing thus builds trust, love and connection with a brand. People care about a brand and they tell others about it: how they enjoyed the service and meals in London Ritz or the Hilton Moscow hotels, if they are satisfied with an Audi car and etc. This way a consistent loyal customers’ base could be built. Nowadays, companies offer a wide range of analogous products as cellphones, cameras and etc. with similar features. At the end of the day a client chooses what he/she can trust, what is true of perception. What does branding do? It stands for three fundamental things: differentiates the product or service from the others in the same category; it adds value to clients and helps to connect them as well in much deeper and most sustainable way. In the process of branding firms seek to make potential clients curious of their brand thus builds emotional and physical experience in buyers’ perception.
Brand values are essential in any organization both from the internal and external perspective. From internal perspective values are defined as the basis where an organization does business. From external aspect, values become meaningful and provide added value for a company. For example, quality as a value, it is a perceived benefit to a customer. Brand values, therefore, become the basis of an organization in terms of differentiation. From the customer’s point of view, he/she is looking for the brand values compatible with the own, personal ones. Values differ from each individual and are formed from childhood, parents, on the own lives, colleagues and etc. Virgin could exemplify this. Richard Branson (Virgin, 2012), the owner of the company, associates the brand with quality, innovation, value for money, fun and sensitive challenge. These are customer values and core values that Virgin is going to do in the future. Recently, more and more organizations are making brand values more as focus point of all business: both for external and internal customers. Internally, a brand can be strengthened through a company’s employees (Ind, 2007). There are cases when managers assume that their work ends by putting efforts on advertisements and/or public relationships and managing departments. However, buyers form the impression about a product or service from responses of company’s employees. As an example, customers are interested to purchase a particular computer brand and looking for the information in commercials. They check press reviews and interact with company’s employees what is their overall perception of computer manufacturers (Levy, 1999). As a result, such internal or external communication gives the marketplace a swift sense of failure or success. The knowledge sharing causes snowball effect that stimulates consumerism and generates ideas omnivorously (Wu & Fang, 2010). The knowledge about a brand unites consumers and encourages “consumer to consumer” interaction by belonging to the group of brand admirers, called brand community.
Brand community
Authors Kanuk & Schiffman (2004) mark out five types of groups, which have echo to buyers’ performance and approach. They are as following: 1) friendship groups; 2) shopping groups; 3) work groups; 4) virtual or brand communities; and 5) consumer action groups. In this research paper the brand community group is in focus. Brand community is the group of passionate influencers who communicate about the specific brand potential customers and influence to drop in customers together into a trusted relationship with a particular brand. Brand media allows a company to extend brand messages and interact in a conversational manner creating access, making influence and reaching rewards.
There is a considerable discussion in scientific society concerning brand community definition. Muniz & O’Guinn (2001) describe brand community as “a specialized, non-geographically bound community based on a structured set of social relations among admirers of brand”. Authors as Andersen (2005), Dholakia et al. (2004), McAlexander et al. (2002) point out that brand community is specialized because it arises around a branded product or service. Moreover, brand community members share responsibility and brand consumption consciousness, rituals and traditions within the brand, being engaged in variety of activities, which maintains continuity of brand community (McAlexander et al., 2002). Loewenfeld (2005) writes also about “we” sense, which brand community members feel, and thanks to it a community keeps distance from others. Summarizing the different authors’ opinions it can be asserted that brand community definition covers not only the community members interest in a particular brand, but also the feeling of belonging, thus indicates similar behavior, perception and recognition of common values.
Brand loyalists’ groups can be based on ethnicity (Baker et al., 2003), gender (Kates & Shaw-Garlock, 1999) or nationality (O’Donohoe, 2001). Consumers belong to such groups mainly due to four reasons to gain: cognitive learning benefits, personal integrative benefits, social integrative benefits and hedonic benefits (Nambisan & Baron, 2007). Cognitive or educational reasons give more accurate and clear feedback from novice to expert about brand values, products and services. Community members discuss and share interpretative opinions receiving the latest news about car models, company business strategies or management decisions (Brown et al., 2007). Thus knowledge acquired in brand community about a brand could be treated “as learning mechanism” (Nonaka & Takeuchi, 1995; Wu & Fang, 2010). Social integrative benefits are received by belonging to a community and by communication with people having the same interests. The Harley-Davidson community members feel like in brotherhood being in the community without excluding gender or age (Schembri, 2009). Furthermore, belonging to such a classless group incorporates attending parties, hanging out with different occupation people with similar mindsets and building a network (Muniz & O’Guinn, 2001). Personal integrative benefits enable to seek status and reputation for customers. Hedonic benefits are related with pleasure to buy and consume.
What keeps customers united in such communities? Firstly, it is the vibrancy and dialogue. Members feel to be a part of cultural team since they share passion to a brand and are engaged in relationships. Secondly, brand members share their views about a brand with other members, they bring to a community updates and news, this way becoming committed to a group (Brownlie & Hewer, 2007; McAlexander et al., 2002; Muniz & O’Guinn, 2001; Schembri, 2009). Brand community members can be called “brand evangelists” and they talk about a brand to other people so much not because they are paid but because they love what they do. Conforming to Fredberg (2009), brand community is involved in “a symbiotic relationship between firms and their customers”. This cooperation means mutually beneficial relationships to survive and encourage each other. Furthermore, analyzing the most effective ways of such communications the organization can acquire value from community discussions.
As technologies and innovations are becoming more powerful nowadays, brand communities have the tendency to be created online. A registered online community member has different rights and authorizations such as space for a personal profile, the eligibility to invite and accept new members to a community, albums for pictures and etc. In this way loyal consumers interact with each other, contact other owners of the same product, who can spread the word of mouth, contact with manufacturers and sellers in order to get complete information (Levy, 1999; Evans, 1994).
Communication
Through different kinds of communication channels, using which companies, brand communities and customers spread and receive information about brands, products and services. There are different ways to deliver a message to consumers and brand communities: magazines, newspapers, radio, TV, websites, blogs, face-to-face, social media, word of mouth and etc. (Basaran et al., 2011; Wu & Fang, 2010; Olson, 2008). Each channel has different effectiveness to reach users. Moreover, the channels mentioned above perform different functions including generating awareness, bringing knowledge, delivering trial and etc. (Young, 2010).
Communication is an essential element in brand building, however, branding covers much more than simply providing brand values to consumers (Schroeder & Salzer-Mörling, 2006). Knowledge exchange about goods and services between brand community members and a brand enables to strengthen long-term relationship with a brand. The research papers (Muniz & Schau, 2007) shows that “consumer-driven communications were more effective in attracting new users for this brand than were the official corporate campaigns”. Furthermore, consumers promote a brand and spread free advertising about a brand image and brand values to keep brand culture alive (Basaran et al., 2011). Communication in brand community can be defined in the directions: customer – customer; customer – brand; customer – company; customer – product (Fournier & Lee, 2009). For example, Audi brand community members communicate inside the community by meeting each other and through the Internet (social media). These communication channels enable to keep in touch and find solutions to the problems.
There are cases where brand values perceived by brand community do not necessary match the ones which a company is actually committed to. It happens when customers or brand community members dislike the brand causing the “anti-brand content”, for instance, mentioned above Burberry case (Economist, 2011). The result is the damaged brand name and the image which is not easy to restore. Such information can be easily spread via the Internet and shared with community members as well as current and potential customers. Furthermore, active participation in the community enables to reject the product change (Muniz & O’Guinn, 2001). A strong brand community of Saab was against the producer’s decision to modify the model “9000”. It can be as a threat to a marketer. Finally, strong and active community may strengthen brand marginality and affect brand loyalty, awareness, associations and perceived quality.
Consumer’s loyalty
“Brand loyalty is one of the many advantages of creating positive brand image and of having brand equity” – Keller et al. writes, (2008). Companies try to award loyal customers giving them a discounts, accumulating values (miles, points) and specific privileges (elite statuses in Hilton Honors, AIRFRANCE FlyingBlue and etc.). According to product and service rate of usage, customers can be divided into 3 categories: heavy users, medium users and light users (Kanuk & Schiffman, 2004). Following the recent studies, companies usually target at the group of heavy users who are more socially active and creative in comparison to the other segmented groups. For example, frequent travelers who are enthusiastic about spending holidays abroad are deeply involved and could tell a lot about travelling (Ind, 2008). The illustration discloses the awareness about a product or service and tendency to purchase and consume it.
The customer’s perception of a brand is closely related with customer’s loyalty. The interaction between consumers and marketers is a key object which influences loyalty. Brand loyalty offers a useful way to examine the interplay between the consumer’s relationships with a brand and brand community (Muniz & O’Guinn 2001). It reveals triadic consumer-brand-consumer relationships. A trust can be a powerful antecedent of customer’s loyalty (Jones et al., 2000; Ganesan, 1994; Ganesh et al., 2000) specifically when loyalty is treated as a relational notion (Garbarino & Johnson, 1999; Sirdeshmukh et al., 2002). The relevant literature unveils that the loyalty can be studied as two-way concept (Rundle-Thiele, 2006; East et al., 2006). Siemieniako et al. (2012) points out. “This concept implies that companies should demonstrate loyalty towards customers if they expect customer loyalty in return”. From the customers’ viewpoint they want to receive exactly what is promised (Gronroos, 2008). This reveals that loyalty is the dynamic phenomenon which can be sustained through company and customer interactions (Dick & Basu, 1994; Oliver, 1999; Rosenboum et al., 2005; Raju et al., 2009; Ahluwalia, 2000).
Keller (2008) reveals that “the strongest affirmation of brand loyalty is when customers are willing to invest their time, energy, money or other resources in a brand beyond those expended during purchase or consumption”. These types of customers are united into brand communities who make opinions about a brand for wider auditory of customers. (Gustafsson, 2008). Thus, brands that have strong brand communities are more superior to the ones which do not have them (Muniz & O’Guinn, 2001). Moreover, “there is a definite feeling among marketers that if you want to build up loyalty to your brand, your product has to have an active social life” (Nordin, 2001). However, a brand can always experiment the risk of how to manage such a community.
Loyal customers naturally spread word of mouth, WOM (Kucuk & Krishnamurthy, 2007; Keller et al., 2008). Word of Mouth & internet (2011) research reveals that WOM communications still most commonly occur face-to-face (93%) and are 50 times more effective than advertising (Gitomer, 1998), thus influence buyers’ decisions. In this case consumers are not just passive recipients (Fuller & Matzlek, 2007; Kucuk & Krishnamurthy, 2007), moreover, they are powerful gospellers actively announcing feedbacks about goods and services for others, thus creating economic value. Corporate stories, created by brand communities, can have influence in strengthening or destroying the brand image. Organizations should keep an eye on the consumers who dislike the brand and disclaim the authentic brand values. That is why companies need to create brand identity and correct meaning of brand performance and associations related to the brand.
Authors Algesheimer et al., (2005), McAlexander et al., (2002), Fournier, (1998) declare that brand community and non-community members have different perception of a brand. The customer’s interest in a brand leads and contributes to the connections with brand community members (Fournier, 1998; McAlexander et al., 2002). Firstly, customers are attracted by the brand’s functional and symbolic gain. Furthermore, “a harmonious relationship with the brand can lead consumers to seek out and interact with like-minded purchasers who share their enthusiasm (Algesheimer et al., 2005). Moreover, speed of getting useful information about the brand is more effective and efficient in brand community in comparison with single consumer. Brand community members receive valuable information much quicker than single customers and community activists do not need to relay on traditional forms of media, as they know updates directly from each other (Hollenbeck & Zinkhan, 2006). Thus such interactions unify community and bring more market power. For brand owners’ representatives it serves as a free marketing tool, as communities stimulate to recognize innovative branding opportunities and put this into practice (Holt, 2002). Communication with brand community members and people outside community asserts with repeated interactions with a brand owner thus strengthen the ties between a brand and consumers. Furthermore, the use of interactive media (the Internet, emails and social media) made these two-way relationships even more pervasive and high-powered. Fournier’s (1998) research presents that consumers tend to have relationships with brands that are similar to human relationships which are based on social background.
The key point of interactions of brand community and non-community members with a brand is relationships established between them. Relationships according to Goffman, E. (1959) can be divided into economic and social ones. Authors, as Clark & Mills (1993) and Clark et al. (1986) characterized them as exchange and communal ones. Exchange relationships can be interpreted as those in which one part expects to gain a comparable benefit from the other one (Kotler, 1986). On the contrary, the core point for communal relationships is mutual support and understanding. Exchange relationships occur between non-community members and a brand holding company while communal relationships spring up among brand community members. Summing up, people in a brand community receive social and communal benefits while non-community members are more interested on the monetary value (Batson et al., 1978; O’Malley & Lester, 1983). As a result people are more willing to help when they are in social relationships (as this helps to strengthen bonds at a group level (Swaminathan et al., 2007; Bagozzi & Dholakia, 2002). This is not the case in exchange relationships (Williamson, 1975). Dimitriadis & Papista (2012) accent that socialization benefits are the core stone for long-term consumer-brand relationships. This leads to brand loyalty and customer satisfaction (Wang et al., 2002; Sweeney & Soutar, 2001; Fournier, 1994). Purchasers who have obligation to brand communities tend to be fiercely loyal (Rose, 2012). Langerak et al. (2003) points out that the more participation in brand community leads to higher degree of engagement “turning visitors into members, members into contributors and contributors into evangelists”.
Table of contents :
1. Introduction
1.1. Background
1.2. Problem statement
1.3. Outline
2. Literature review
2.1. Brand and brand values
2.2. Brand community
2.3. Communication
2.4. Consumer’s loyalty
2.5. The prerequisites for the further theoretical development
3. Method
3.1. Method of gathering information
3.2. Sample
3.3. Operationalization of values
3.4. Critical review of the research method and reliability of the study
4. Analysis
4.1. Audi brand values
4.2. Communication
4.3. Comparison analysis
Conclusion
Limitations
Literature list
Appendix A
Appendix B
Appendix C
Appendix D
