Asian Academy of Management Journal, Vol. 12, No. 1, 83–107, January 2007
THE EFFECT OF BRAND IMAGE ON OVERALL SATISFACTION AND LOYALTY INTENTION IN THE CONTEXT OF COLOR COSMETIC Stephen L. Sondoh Jr. 1 , Maznah Wan Omar2, Nabsiah Abdul Wahid3 Ishak Ismail3 and Amran Harun 4 Labuan School of International Business and Finance, Universiti Malaysia Sabah, 87015 F.T. Labuan, Sabah, Malaysia 2 Universiti Teknologi MARA, Kedah Campus, Peti Surat 187, 08400 Merbok, Kedah, Malaysia 3 School of Management, Universiti Sains Malaysia, 11800 USM Pulau Pinang, Malaysia 4 School of Business and Economics, Universiti Malaysia Sabah, 88999 Kota Kinabalu, Sabah, Malaysia e-mail:1 firstname.lastname@example.org, 2 email@example.com, 3 firstname.lastname@example.org, 4 email@example.com , 4 firstname.lastname@example.org 1
The purpose of this study is to examine the effect of brand image benefits on satisfaction and loyalty intention in the context of color cosmetic product. Five brand image benefits consisting of functional, social, symbolic, experiential and appearance enhances were investigated. A survey carried out on 97 females showed that functional and appearance enhances significantly affect loyalty intention. Four of brand image benefits: functional, social, experiential, and appearance enhances are positively related to overall satisfaction. The results also indicated that overall satisfaction does influence customers' loyalty. The results imply that marketers should focus on brand image benefits in their effort to achieve customer loyalty. Keywords: brand image, satisfaction, loyalty, brand strategy, color cosmetic product
INTRODUCTION Customer satisfaction has been widely accepted as an important issue for many marketing managers. It is commonly used as a marketing benchmark of a company's performance (Bennett & Rundle -Thiele, 2004). Furthermore, it is generally believed that a satisfied customer is more likely to display loyalty behavior, i.e. repeat purchase and willingness to give positive word of mouth (Taylor, 1998; Bennett & Rundle -Thiele, 2004; Schultz, 2005). Although this is the case, Taylor (1998) stated that "companies began to notice that they often were losing customers despite high satisfaction" (p. 41). 83
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Reichheld (1994) argued that satisfied customers are not necessary loyal. Evidently, Reichheld and Markey (2000) noted that those customers said to be satisfied or very satisfied on the survey, showed that between 60 and 80% will defect in most businesses. The criticisms of relying solely on consumer satisfaction survey (Jones & Sasser, 1995; Reichheld, 1994) have deliberately called for a paradigm shift from emphasis on satisfaction to the pursuit of loyalty as a strategic business goal (Oliver, 1999). Oliver (1999) noted the shift "appeared to be a worthwhile change in strategy for most firms because business understood the profit of having a loyal customer base" (p. 33). Therefore, it was suggested that those who are measuring customer satisfaction should not stop there (Reichheld, 1994). The shift to measure loyalty is based on a desire to better understand retention, a component of loyalty which had a direct link to a company's profit (Taylor, 1998). Brand loyalty is a "marketers' Holy Grail" (Kapferer, 2005) and it ideally measured the health of the company (Bennett & Rundle -Thiele, 2005). Studies have reported that a 5% increase in consumer retention can generate a profit of 25–95% over 14 industries, for example in auto service chains, software, brand deposits and credit card industries (Reichheld & Detrick, 2003; Reichheld & Sasser, 1990). Additionally, those loyal customers are more likely to advocate for the brand and recommend it to relatives, friends and other potential consumers (Schultz, 2005). Apparently nowadays companies are concerned that today's consumers tend to be less loyal (Dekimpe, Steenkamp, Mellens, & Abeele, 1997; Bennett & Rundle Thiele, 2005; Kapferer, 2005). The...
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