EFFECTS OF PRODUCT QUALITY ON BRAND LOYALTY

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EFFECTS OF PRODUCT QUALITY ON BRAND LOYALTY

Chapter one

INTRODUCTION

1.1 Background of the Study

As the marketing environment evolved, it became increasingly competitive. As a result, it has become critical for organisations to look for ways to gain and maintain Brand Loyalty by establishing customer trust.

In essence, Brand loyalty has become the goal of all organisations since they have realised that when customers are loyal to their organization’s brand, the organisation receives a consistent source of cash, which improves profits.

Companies that successfully cultivate loyal customers also develop brand ambassadors: consumers who will buy a specific brand and rave about it to their friends. This is free word-of-mouth marketing for the company, which helps it save money on promotion.

True brand loyalty emerges when consumers have a positive opinion towards a specific brand, which can be demonstrated through repurchase activity. This form of loyalty can be a valuable asset to the company because clients are willing to pay higher prices,

may cost less to serve, and bring in new customers (Reichhed & Sasser, 1990). According to Gounares and Stathakopoulos (2004), marketers face the issue of influencing loyal customers.

A consumer buys a product to meet his wants and has specific expectations of the brand he buys; when he is able to achieve those perceived values from the brand, he develops trust and contentment with the brand, which is known as “customer satisfaction” (Farris, Neil, Philip, & David 2010).

consumer satisfaction measures how well a company’s products and services meet or exceed consumer expectations (Farris et al. 2010). Companies have realised that it is easier and more cost effective to identify ways to improve customer satisfaction and retain existing customers rather than focusing on acquiring new consumers.

Creating customer happiness is a defensive approach, and the behavioural goal is customer loyalty, sometimes known as “brand loyalty” (Fornell, 1992).

According to Prus and Randall (1995), brand loyalty is a combination of several attributes. It is motivated by customer satisfaction, but it also requires the consumer’s commitment to make a persistent investment in a long-term connection with a brand or firm.

They also stated that brand loyalty is reflected by a combination of attitudes (intention to buy again and/or buy additional products or services from the same company, willingness to recommend the company to others,

commitment to the company demonstrated by a resistance to switching to a competitor) and behaviours “(repeat purchasing, purchasing more and different products or services from the same company,

recommending the company to others)”. Loyalty is often seen as one way for a consumer to communicate his or her satisfaction with the performance of the product or service acquired (Bloemer & Kasper, 1995).

There have been numerous reasons why buyers remain loyal to a particular product. Customers may be lured to a specific brand because to their perception of the brand’s quality, situational restrictions, a lack of alternatives, or simply because they find it convenient.

Lau, Chang, Moon, and Liu (2006) stated in their article that various aspects influence buyers’ brand loyalty to specific brands, including brand name, product quality, pricing, promotion, and service quality.

This study will critically examine product quality as a factor influencing brand loyalty, as well as the extent to which a product’s quality makes buyers loyal to it. Product quality is determined by the qualities and traits that comprise the product, as well as its capacity to meet the needs of customers.

Product quality is defined as the set of traits and attributes of a saleable good that impact its attractiveness and that a producer may regulate to meet certain fundamental requirements (Business Dictionary).

According to Gaurav Akrani (2013), product quality refers to the incorporation of features that have the ability to meet consumer needs (wants) and provide customer satisfaction by improving products (goods) and making them free of any deficiencies or defects.

It can also refer to the characteristics of a product that a customer wants and requires in exchange for monetary consideration. If the customer is satisfied with the goods, the quality is considered satisfactory.

A sense of great quality or exceeding expectations can contribute to strong brand loyalty (The economic lexicon). The concept of product quality can be analysed from two separate perspectives: objective quality and perceived quality (Brunso et al., 2005).

Objective quality refers to the technical, measurable, and verifiable characteristics of products/services, processes, and quality controls. This comprises product characteristics, performance, and durability, among others. Subjective or perceived quality refers to customers’ value evaluations or perceptions of quality.

This may involve aesthetics and the perceived quality of the brand image. When a customer views a quality to be of high quality, it could be because his expectations for the product were significantly met, which could lead to loyalty to that product.

It has been stated that a customer’s perception of a brand’s quality has a significant impact on the customer’s commitment to that brand.

1.2 Statement of the Problems

However, a survey of the research on the relationship between product quality and brand loyalty has revealed a gap in the literature that critically analyses the product quality and brand loyalty construct, as well as the degree to which product quality influences brand loyalty.

These reviews have demonstrated the importance of understanding how product quality and brand loyalty constructions work, particularly in the Nigerian market. Lau et al. (2006) stated in their article that various factors influence customers’ brand loyalty to specific companies.

The considerations included brand name, product quality, and pricing, among others. Other scholars and experts have also identified characteristics that promote brand loyalty, with one thing in common: “PRODUCT QUALITY”.

This study will seek to discover how product quality and brand loyalty function in Nigeria, as well as the extent to which product quality influences brand loyalty of a certain brand, resulting in preference over competitors’ brands. The study focuses on Nokia mobile phones.

1.3 GOALS OF THE STUDY

The overall goal of this research is to determine the impact of product quality on brand loyalty in an organisation. Specifically, the objectives of this research work are to:

1. To determine the perception of Nokia Mobile Phone consumers about the quality of the product;

2. To determine the relationship between product quality (i.e., Nokia Mobile Phone’s quality) and brand loyalty among its users;

3. Determine how the phone’s ‘User friendliness’ influences customers’ retention/loyalty level.

4. Determine the extent to which the phone’s affordability influences client retention/loyalty.

1.4 RESEARCH QUESTIONS.

To fulfil the purpose of this study, the following research questions will be answered:

1. How do Nokia mobile phone consumers perceive the quality of their devices?

2. What is the relationship between the quality of Nokia mobile phones and the brand loyalty of their users?

3. How does the phone’s ‘User friendliness’ effect customer retention/loyalty levels?

4. How much of an influence does the phone’s affordability have on customer retention and loyalty?

1.5 Research Hypotheses

Hypotheses are tentative statements or arguable assertions made regarding the characteristics of a particular group that may be accepted or rejected following careful examination and testing. (Adaramola 2001).

The testable hypotheses for this study work are:

1. Nokia Mobile Phone consumers do not have differing opinions about the phone’s quality.

2. There is no association between the quality of Nokia Mobile Phones and their users’ brand loyalty.

3. The ‘User friendliness’ of Nokia phones has no effect on customer retention/loyalty levels.

4. The affordability of Nokia phones does not affect consumer retention/loyalty.

1.6 How Research Objectives Are Run Through Research Questions and Hypotheses

S/N

Research Objectives

RESEARCH QUESTIONS:

Research Hypotheses

1.

To determine the perception of Nokia Mobile Phone consumers about the quality of the product;

How do Nokia Mobile Phone consumers perceive the quality of their devices?

Nokia Mobile Phone consumers have similar perceptions about the phone’s quality.

2.

To determine the relationship between product quality (i.e., Nokia Mobile Phone’s quality) and brand loyalty among its users;

What is the relationship between the quality of Nokia mobile phones and the brand loyalty of their users?

There is no relationship between the quality of Nokia mobile phones and their users’ brand loyalty.

3.

To determine how the phone’s ‘User friendliness’ influences customers’ retention/loyalty levels.

Is the phone’s ‘User friendliness’ affecting customer retention/loyalty levels?

The ‘User friendliness’ of Nokia phones has little effect on customer retention or loyalty.

4.

To determine the extent to which the phone’s affordability influences customer retention/loyalty;

To what extent does the phone’s affordability influence customer retention/loyalty?

Customers’ retention/loyalty levels are unaffected by the affordability of Nokia phones.

1.7 Scope and Limitations of the Study

The overall goal of the research is to conduct a descriptive study on the impact of product quality on brand loyalty. This study will look into how product quality affects the competitive environment of the mobile phone industry. This study is limited to Nokia mobile phones.

The researcher will carry out a survey interview. Furthermore, the study includes talks by other authors on product quality, brand loyalty, and customer happiness.

1.8 Significance of the Study

The study will provide a thorough picture of how product quality influences brand loyalty. A study of this sort is expected to improve the performance of several companies and the mobile phone industry. It establishes a foundation for recognising the significance of product quality in acquiring loyal customers.

The study will also be extremely beneficial to students researching this area of study. It also wants to raise awareness about the impact of product quality on consumer loyalty to a specific brand, which leads to the organization’s success.

Organisations that prioritise product quality will have loyal customers who are satisfied with the product. Finally, the study is intended to spark more research interest in other aspects that influence consumer loyalty to a specific brand. Nokia has a competitive advantage over its competitors due to the quality of its products.

1.9 Definition of Key Terms

PRODUCT: Anything offered to the market to attract notice, acquisition, usage, consumption, and disposal to meet a need or want (Kotler, 2006).

PRODUCT QUALITY is defined from two perspectives: objective quality and perceived quality (Brunso et al. 2005). However, this study focuses on perceived quality, which is the consequence of a consumer’s subjective evaluation of a product. (Zeithaml, 1988; Dodds et al. 1991; Aakers, 1991).

BRAND: The American Marketing Association defines a brand as a name, term, design, symbol, or combination of them that distinguishes one seller’s goods from those of competitors.

BRAND LOYALTY: Is described as a firmly held commitment to repeatedly buy or patronise a chosen product in the future, despite situational impact and marketing efforts that have the potential to promote switching behaviour (Oliver 1997).

CUSTOMER SATISFACTION: According to Anton (1996), customer satisfaction is a state of mind in which a customer’s requirements, wants, and expectations are satisfied or exceeded throughout the product or service’s life cycle, resulting in future purchases and loyalty.

MARKET INERTIA: Consumers tend to do what they have been doing until acted upon by an overwhelming external force (B. Robinson 2005).

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