Ryanair Business Environment

An Internal and External Business Environment Analysis of Ryanair

The objective of this research paper is to conduct an analysis of internal and external business environment of a service company. For this purpose airline global industry has been chosen as a case study because of its importance in the current economic and political scenario. International investment, world trade and economic growth are some important factors deriving this industry (Porter, 1986). The present paper will undergo strategic analysis of internal and external environment of Ryanair in relation to its performance in the global Airline industry. It will allow identification of factors that affect the profitability and popularity of a company. In the end recommendations will be suggested accordingly. Lets look at the Ryanair business environment.

Company Background – Ryanair Business Environment

Ryaniar has a long standing reputation amongst low cost airlines in Europe. Ryaniar Ltd was founded by the Ryan family in 1985 and within ten years of its establishment the company gained immense popularity because of its image as a low rent airlines. The company provides scheduled services between the UK and Ireland through its 297 Boeing aircrafts. The company still manages to maintain its image as popular airline of the world. The Ryaniar Company focuses on budget conscious leisure and business travelers for its services. People who choose other transport services to reduce the expanses of their travelling remain to but the primary target of the company. The company also aims to expand and improve its services in low fare market. The mission of Ryaniar Ltd is to become the most profitable and attractive low fare airline in Europe low cost carriage sector by brining continuous improvements in its services.

Market Description

Currently the growth and development of low cost airline is being favored in the European Airline industry and it remains the main determining factor for the evolution of an airline company. Almost 18 percent of the transport supply is being done by low cost airlines and the seats are mostly limited to medium and short haul flights. These low cost carriages are also deemed important for the passengers who want to find seat for point to point moves.

Belobaba et al. (2009) writes that global airline industry has grown by 12 percent in 2010 and the major player in this context remains to be the United States of America. The market growth is further expected to increase in years to come. It is believed that by 2015 the growth will reach to $714 billion and the number of passengers will also grow to 3 billion. Domestic market shows the leading market segment in the global airline industry and America holds about 45% value of the industry. A number of challenges are also being faced by the global airline industry after global financial crisis. By 2010 many consumers started to cut back their leisure spending and relapsed air travel by train or other cheaper means of transport. This fall in revenue is mainly fueled by increased unemployment rate and economic uncertainty (Belobaba et al., 2009).

Some negative events have also declined the business of airline industry and amongst them rising fuel prices increasing the cost of operations are most common in the history. Several times they have put a dent on the industry’s operations. Along with that, other negative players are also there amongst them increased security threat, political unrest, uncertain and exchange rates are at the top of the list.

According to a report Published in the Telegraph UK the low cost sector has increased its growth by 12 pc in the last decade. However, even the low cost airlines are not free of the negative market affects that undermines overall activity of the industry but still they are making more business that the high cost European airlines (The telegraph, 2014).

Competition

After its establishment Ryaniar faced a great deal of competition. European Union deregulation in 1990 resulted in some substantial changes on the British industry. The most important of which is the focus of people on budget airlines offering comparatively shorter routes. These airlines provided a great deal of competition and grew on expense of traditional British airlines. Later increase in fuel prices after 2008 economic crisis also resulted in further decline of luxury airlines. Competition is also not very strong as the industry is not in a healthier state to support the business of expensive airlines and a number of airlines are under the threat of disappearance because of bankruptcy. European Union promotes low wage, low cost and low income flag carriers.

Challenges Faced By Ryaniar

Operating environment of the airline industry is being affected by a number of challenges that range from safety issues to consumer preferences, spending patterns, political instability, weather, security and natural disasters. All these factors affect the operating environment of Ryaniar Ltd also and most of them are beyond the control of the management of any airline. The expenses of flight cannot be controlled regardless of the number of passengers travelling in the plane. In addition to this, when shrinkage in airline industry happens, the remaining cost of operations remains the same that presents immense challenges to the management. Dobruszkes (2006) adds that operating environment of some low cost airlines has become favorable because they have adopted some cost reduction strategies that mainly include the management of the marketing cost, fleet reducing services, airport maintenance, route alteration and recharge policies. Appropriate techniques for maintenance of Engines, maintenance cost of hangers, management of staff cost and marketing cost to increase productivity are also adopted. In this scenario, companies that focus on small operating basis and start internet ticketing generate more revenues (Dobruszkes, 2006).

In the European market variation related to differences in the geography and scope of the airline persist. Most of the short and middle haul airlines focus on Western Europe and the distance for flight is 1.4 hours during this time an area of 634 kilo meters is covered. The total area covered by Ryaniar and most of the other low cost airlines is less than 1000 kilometers and in most of the cases international connections are not present. In addition to this, most of the low cost airlines influencing Easy Jet and Ryaniar are poorly penetrated in central and Eastern Europe markets. Some networks are also designed for tourists to take them to their desired destinations. These airlines do not focus on the capital city but they also maintain their attention to small cities and towns where low cost flights are easier to be managed (Mason, 2001).

Services Provided By Airline Industry

The services delivered by the airline can be divided into three main categories mainly including freight services, logistics and rail passenger’s airbus. Superior services are usually delivered to the clients that are willing to pay more. Product scope of Ryaniar Ltd is large as it promotes many services. It offers a range of destination around in Europe. In addition to this, hospitality, carriage, aircraft control system and assistance in booking rest houses is also provided. Like all other airports, services at the Ryanair airports are also available that include flat beds lounges and fast track security system.

Intangibility of Services

Ryanair business environment services are intangible and cannot be smelled, touched and tasted. It cannot be processed physically possessed.

Inseparability of Production and Consumption

Inseparability of production and consumption means the production of a service cannot be separated from its consumption by customers happen simultaneously. Customers buy specific type of product and take it home but services cannot be taken home, instead they are provided in a specific manner.

Perishability

Perishability is another characteristic of the service that means once services are produced they cannot be stored because of which supply demand gap arises.

Heterogeneity

Heterogeneity means that variation in the quality of services because of which standardization cannot be maintained. This makes the maintained of quality of service delivery a difficult task for service providers.

Challenges

Customer safety and quality issues are at the heart of any service sector and same is true for the airline industry. Here the quality of services acquires central place for the organizations. Quality of services is assured by the notion of truth that primarily reflects the importance company gives to handle each and every customer. Therefore, for service industries it becomes extremely important to design and manage activities in a way that can assure good quality services to the passengers (Janawade, 2013).

According to Janawade (2013) service quality management is still the subject of debate for the management of airline companies. The diversity of the airline services makes it harder for the administration to maintain good standard of services at each front. The quality of flight meals clean and airy airports, luxurious waiting areas, hygienic environment of washrooms, customer care and maintenance of airplanes are some areas of quality that remain the focus attention of the administration. Sometimes it becomes harder for the company to maintain superior quality services when budget is low and economic uncertainty prevails in the market. This is the reason for which some airlines fail to maintain good quality in-flight environment. The issue of measuring service quality has always been raised by the customers who pay a huge amount to travel across the world. Business class customers are often more cautious about the way they are treated at the airport and also in the airplane. Some other areas are also there that create major issues for the management and they include mishandling of baggage, late flights and misinformation (Janawade, 2013).

Along with the quality of services the rate of accidents and incidence also becomes the prime concerns for passengers who opt to travel in an airline. Total rate of incidents, rate of accidents, mid air collision and pilot’s deviations are some of the events that affect the safety of airline operations. The overall safety ratio of the global airline industry has declined in the past decade. Many technological issues arise because of poor maintenance of the aircraft. Moreover, the entire industry is under the threat of customer safety issues mainly generated by political unrest and legal bindings of the company. Airline industry remains the center of attention of the government and public as far as the passenger’s safety issues are concerned and many times these issues have resulted in serious debates that presented the industry with a number of challenges (Janawade, 2013).

There are a number of regulatory issues as well that affect the service delivery in the airline industry. Airline industry remains the center of attention of the government of a country and hence is mostly subjected to extensive regulations of the government. Many legal compliance and regulatory requirements are there for the industry. In the US airline industry FAA (Federal Aviation Administration) regulations matter greatly, which change from time to time and put airline industry under scrutiny. Same is true for other areas including Europe, Australia and Asia. Other acts such as transport security act result in federalization of some security procedures. Government of the UK keeps proposing increase in taxes that directly affect the revenue generation of the industry. In addition to all this, other regulatory changes are also expected that may range from security concerns to fuel emission and environment safety issues. All these factors may further affect the business deleteriously.

Success of Organization in the Management of Challenges

As stated above a number of challenges are being faced by the airline industry and they are regulated by the key players in the industry. Key players in the airline industry are those that have direct or indirect affect over the business and amongst them airline manufacturers, air navigation service providers and air-port construction teams are important, along with them, political atmosphere of a country and fuel price are also some intangible factors that affect the business of the airline industry. Policies and procedures of the ‘department of the trade and industry’ can positively or negatively affect then business (Mason, 2001). Along with this, employee’s turnover rate has become a major problem for the companies that tend to develop and make progress. A good human resource management system can aid companies to reduce turnover rate by keeping employees satisfied with the job. Companies with a high rate of employee’s turnover often face a great deal of pressure in terms of the management and training of their employees (Richard et al. 2001). The global airline industry has managed its growth by maintaining its operations in suitable limits of economy. Dobruszkes (2006) explains that European airline industry is the one that prefers evolution of low cost airline networks. Because of the demands and competition trend in the market this concept became famous after 1995. The European low cost airline scope has actually met by Ryaniar and Easy Jet that have felicitated customers who previously chose other transport system because of high rent of the airlines. Ryaniar airline alone has carried 70 million passengers in the year 2012 and is expected to increase its size.

Bamber et al. (2013) writes that though turnover rate of employees in an industry vary greatly with time and many factors play their part in this context. Sometimes nature of the job and low wage becomes the cause of a high turnover rate in case of some industry such as fast food and call centers. When compared to the other sectors the rate of employee’s turnover in airline industry is comparatively low (Bamber et al., 2013).

Richard et al. (2001) also say that airline industry show low turnover rate compared to any other industry of the world. Overall turnover rate of the industry is 9 percent that shows employees are not replaced very quickly over a particular time period. However, increased fuel prices and deregulation act in the late 1980s have made the industry less attractive. Operating cost has increased to a considerable extent and worker’s pay has reduced. Many other airline companies in the world including that of American and Asia have also decided a wage cut off to reduce the cost of operation within the system. In addition to this, 100,000 employees of only American airline industry were laid off after deregulation act. This has given rise to an uncertain working culture and some of the employees opt to find jobs in another industry that is less uncertain than the airline sector (Richard et al. 2001). Bamber et al. (2013) conclude in their research paper that airline industry needs to maintain its attractiveness in order to keep employees happy and contented with their jobs.

Forces Deriving the Airline Industry

A number of forces derive the airlines industry that range from customer satisfaction issues, strategic planning, point to point roots, terminal and aircraft facility, online booking services, reduced lines at the ticket corner and economy of scale. Along with customer safety other factors are also there that create management challenges for the airline companies. Staff safety at the airport is also one of the major concerns of the administration that results in poor working morale of the staff members.

References

Bamber, G. J., Gittell, J. H., Kochan, T. A., & Von Nordenflycht, A. (2013). Up in the air: How airlines can improve performance by engaging their employees. Cornell University Press.

Belobaba, P., Odoni, A., & Barnhart, C. (Eds.). (2009). The global airline industry (Vol. 23). John Wiley & Sons.

Dobruszkes, F. (2006). An analysis of European low-cost airlines and their networks. Journal of Transport Geography, 14(4), 249-264.

Hanlon, J. P. (2007). Global airlines: competition in a transnational industry. Routledge.

Janawade Z., 2013, customer perception quality of complex services, France, Paul Cezanne University, p. 2-14.

Mason, K. J. (2001). Marketing low-cost airline services to business travellers.Journal of Air Transport Management, 7(2), 103-109.

Porter, M. E. (Ed.). (1986). Competition in global industries. Harvard Business Press.

Richard, O. C., & Johnson, N. B. (2001). Strategic human resource management effectiveness and firm performance. International Journal of Human Resource Management, 12(2), 299-310.

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Corporate Communication Strategies

Discuss the purpose of corporate communication strategies

Corporate communication is the overall effort of an organization to communicate effectively and profitably. For the achievement of set goals of an organization, it depends largely on character and organization’s relationship with its stakeholders such as community, employees, clients and suppliers. Thus, it is a strategic tool for an organisation to have competitive advantage over its competitors. It is used to motivate, inform employees, lead and persuade the clients. Corporate communication strategies should be aligned according to different organisation members who may not necessarily be having the same interests. Below are the purposes of corporate communication strategies. Public information: here communication is described as dissemination of information through the media such as bronchus and newsletters. Two ways symmetric: here is a dialog rather than a monolog, communication efforts are seen in terms of its research based and the use of communication in enhancing understanding with stakeholders. Press a gentry: it tries to gain coverage from mass media. Here information is given and no more information is collected from the stakeholders.

Assess how corporate communications link to corporate objectives

Significant relationship between corporate objectives and corporate communication is evident. The top management should ensure that the corporate objectives are clearly communicated to the lower management through the middle. Lack of effective communication may lead to poor or no strategy implementation. Percentage growth, market share in the market, future revenue targets as well as creating more values for stakeholders are examples of corporate objectives, which helps in running of the organization. This makes the organisation have a strong link between the corporate objectives and the corporate communication.

Analyze the relationship between corporate communication and corporate branding

There is a great relationship between the corporate communication and corporate branding. Corporate branding is the symbol used by corporate to identify itself to its audiences or clients. Corporate branding is important as it helps in creating awareness and act as a reminder of the existence of an organization. It is through effective communication in an organization that will enhance corporate branding. In addition to corporate branding, we need to consider the corporate image, which is the perceived sum of organization such as plans and objectives. It includes management style, services, products and communication activities.

Section 2

Demonstrate how you would plan an internal corporate communication audits

A communication audit is an indicator of a corporate current communication practices and their effectives. A communication audit can cover internal and external communication as separate or both depending on the desired outcome and the objectives of the corporate. An audit points out problems such as information blocks, information duplication and misunderstanding. When planning for a communication audits, formal and informal strategies should be used. For instance use of surveys which is a form of quantities research, use of interviews (qualitative research), analysis and reports and action planning. A communication audit is important in that it helps in highlighting current practices as well as possible lacking elements in an organization.

Explain how you would conduct an internal corporate communications audits

Here we have to consider various steps in corporate communication auditing. Determining key areas to audited. By considering both the internal and the external communications; consider everything from your standard branding pieces such as logos and business cards.

Choose research method. When conduction a corporate communication audits you have to select from a variety of research methods such as online survey, interviews and focus groups. This helps in collecting relevant information.

Collect and evaluate your past communications. Here you have to consider all the types of communications and information passed from the management to the middle and lower management. You need to ask questions like; who were our key audiences? Key messages? Did we reach our clients with the correct information? This helps you in knowing where to start with your corporate communication audits.

Look outward. This is where you focus on the customers and your community. Use questions to analyze your communication from your community and customers point of view. Try to find out what is their perception about your organization.

Look inward. Staffs and volunteers are the most important consideration in this stage. You need to collect their views about your organization’s communication. Ask, what are your reactions of communications during the past year? What could be improved? Did internal documents serve your needs? This helps you to have an overview of what is required of you, Put together a plan for future communications. You need to use your research as the starting point for making a corporate communication audit for your organization.

Corporate Communication Strategies Dissertations

Critically evaluate the effectiveness of the current levels of practice in your organisation

In evaluating the level of effectiveness, you need to consider the commitment of the organisation. In terms of commitment, the organisation should be effective in that it ensures that all the objectives of organization are achieved through proper communication.

Another effective practice is the human resource. Through effective communication in the organization, various functions such as section, recruitment, in-services training are taken care off. Administration and finance control. In the running of the organization through effective communication of the set objectives, the management is in a position to control how the finances are used.

Explain how you would conduct an external corporate communication audits

An external communication audit is an indicator of current communication practices in an organization. It gives an organization’s information to the external stakeholders such as the local community, the government, the media, clients and suppliers. When planning for an external corporate communication audits you should consider various factors such as the target audiences. This will help in knowing the type of information you are going to pass from your organization to the target audience, thus enhancing the effectiveness of communication.

Demonstrate how you would conduct an external corporate communication audits

When conducting an external corporate communication audits, you have in use things like signage, posters, newspapers, voice messages and bronchus. The following steps are used in achieving it.

Understanding strategic communication practices. This helps in measuring your communication efforts. You need to ask questions that will help you determine strategic communication practices such as what is your communication vision. In addition, how does it relate to your organization’s mission? Are your communication goals well defined and measurable?

Identify the level of practice. There are various levels of practice such as institutional practices that are routine and improved over a time, Optimized practices are continuously evaluated and improved over a considerable period with sufficient resources.

Access the current performance. Here you need to know the levels of your organization performances through interviewing your audiences, use of focus groups. This helps in understanding where to start and what information to change about your organization.

Identify the areas for improvement. Getting feedback from your audiences, you now have an idea of where to change or improve in the organization. This enhances how communication has been done in the organisation. Here you need to ensure that media coverage is taken care off to pass the relevant information to the target audiences. After all this is done, you need to plan for future communication. This increases the effectiveness of your organization.

Critically evaluates the effectiveness of the current levels of practice in your organisation

As a result of effective communication in the organization there is a great change in practices such as community relation. This is as a result of corporate communication branding and imaging in the organization which helps the organization to change a lot. Through enhancement of communication with the local community; the organization has known the tastes and preferences of the community. Program management is another sector that is effective. Due to communication done with various departments in the organization, programs are run effectively thus enhancing the relationship

Financial management: It is through effective communication in the organization that budget administration is taken care of by knowing what the target audiences need you are in a position to budget well.

Demonstrate how you would plan the development of a corporate communication strategy

Having in mind what you need to achieve, you need to know what your communication plans are by asking yourself the following questions; do you want to improve your organization reputation? Do you want to generate more online or offline news coverage? You just need to lay down your organization objectives. The objectives need to be SMART: specific, measureable, achievable, realistic and time.

In planning your strategy, you need to define how you will achieve you objectives. Your strategy should include a profile start such as; do you want to generate maximum or minimum coverage? By having this in mind you are in a position to have an effective corporate communication strategy in your organization.

Selecting the audiences to influence with a corporate strategy

When selecting audiences to influence your corporate communication strategy you need to consider both the internal and external audiences in your organization. First consider how employees who are the internal audiences influence your communication strategy. What information about your organization do you want to pass to your employees? Consider the external audiences such as the media, suppliers’, clients and how they influence your communication strategy. The information about your organization passed to the audiences should be clear information in order to protect the image of your organization. Both the internal and external audiences influence your communication strategy as you need to know how to deal with them.

Plan appropriate measures to monitor a planned corporate communication strategy

Participatory monitoring and evaluation covers any process that allows all stakeholders – particularly the target audience – to take part in the design of a Project, its ongoing assessment and the response to findings. It gives stakeholders the chance to help define a programme’s key messages, set success indicators, and provides them with tools to measure success. They include problem ranking, surveys and mapping. This helps in monitoring your communication strategy.

References

Hopper M – Organisational Communication Satisfaction (LAP Publishing, 2010) ISBN: 3838317084.

Blundell R and Ippolito K – Effective Organisational Communication: Perspectives, Principles, Practices (FT-Prentice Hall, 2008) ISBN: 0273713752.

Beyerlein M M and Harris C L — Guiding the Journey to Collaborative Work Systems: A Strategic Design Workbook (Jossey Bass Wiley, 2003) ISBN: 0787967882.

Clutterbuck D and Hirst S — Talking Business; Making Communications Work (Butterworth Heinemann 2003) ISBN: 0750654996.

Dawson R — Living Networks: Leading Your Company, Customers and Partners in the Hyper-connected Economy (FT-Prentice Hall, 2003) ISBN: 0130353337.

Daya K T — International Communications: Continuity and Change (Hodder, 2000) ISBN: 0340741317.

McKenzie J and van Winkelen C — Understanding the Knowledgeable Organisation (Thomson Learning, 2004) ISBN: 1861528957.

Preston P — Reshaping Communications (Sage Publications, 2001) ISBN: 0803985630.

Quirke B — Making the Connections: Using Internal Communication to Turn Strategy into Action (Gower, 2002) ISBN: 0566085178.

Quirke B —Communicating Corporate Change (McGraw-Hill, 1996) ISBN: 0077093119.

Stewart J (editor) — Bridges Not Walls; A Book about Interpersonal Communication (McGraw Hill, 2001) ISBN: 007240082X.

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Brand Loyalty Customer Behavior

How does Brand Loyalty Influence Customer Behavior?

The rise in living standards, ease of accessibility to finance coupled with a wide variety to choose from has made consumer durable market to grow with a rapid rate. Many players are getting into the market. With the advances in communication and technology, new lifestyles and the quest to appear young and beautiful, the demand for quality beauty products has increased significantly. Consumer quality sector is characterized by the emergence of exchange offers, discounts and intensive competition. People nowadays want to imitate in regards to dressing, language, and politics among other lifestyle aspects. The increasing population is bombarded with information about maintaining a youthful look, making women seek for cosmetics that suit them. With this knowledge in mind, beauty manufacturing product companies make every effort to brand them to capture the booming market. Companies are competing on the basis of firm grasp of the local and international market, their well acknowledged brands and hold over wide distribution network. The penetration level of consumer products remains high.

This research is scoped down to understand the relationship between consumer behavior and brand loyalty, factors affecting consumer decision making, the role of brand loyalty in consumer durable goods and the position of the individual consumer in the segment. The path forward will be to study the secondary data for industry overview, collect primary data for more insight and derive conclusions based on primary and secondary data. The research findings will be addressed based on the theories of consumer buying behavior and brand loyalty.

Organizations must engage in making strategic decisions that are capable of improving the firms’ image so that they can have an advantage over competitors. To be specific, these image enhancing strategies ensure that the organization increase the loyalty of the current customers. In addition, the image enhancing strategies should help in the attraction of new customers to the organization. Strategic decisions that can bring enhanced image to the organization have included the selection of target markets, and modification of products to suit the demands of the customers. Other strategic decisions on prices, location of products and services, promotional efforts, and operating policies help in improving the organizations’ image.

The implementation of these strategies ensures that there is a solid background for effective image in the organization. An organization’s image ensures that if there is something about it that is not known, the knowledge the customers have on the organization fills the void. The main concern of this research is to determine whether the perception about the brand image affects customer behavior.

Research Objectives

The interest of the research is to determine if brand loyalty influences consumer behavior. This study would be of value to those organizations concerned about the society and those concerned with the attaining off the highest possible profit. Further, the study aims to find if consumers have positive attitudes for those organizations that improve their brand loyalty and social responsibility.

Specific research objectives include:

To find the relationship between consumer behavior and brand loyalty.
To find out whether consumer behavior leads to change in the brand image quality, for instance, product quality or service quality.
The influence of customer satisfaction on the brand’s image
Does consumer behavior affect brand image?
Does consumer behavior lead to change in the brand image quality?
Does customer satisfaction affect brand image?

Literature Review

The main focus of this study is to measure the attitudes of customers in relation to brand loyalty and to ascertain its influence of this attitude on brand loyalty. Study of attitudes enables organization managers to answer questions as to why a consumer purchased one product over another. The understanding of the consumer attitude towards particular products ensures that they come up with strategies and decisions on major products and market decisions.

The image associated with a particular product or service ensures that it has a competitive advantage over other products and services. A company’s brand is valuable strategic asset in achieving goals and objectives. Brand loyalty can be referred to as the consumer decision; whether conscious or unconscious concerning the use of a product or service. It may also refer to the intention to buy or use a particular product for a long duration of time. Brand loyalty is achieved due to the right features, and the quality of the brand. Quality of the product must be at the right price for the consumer to perceive the brand as being loyal to their needs. Organizations can change consumer behavior concerning a particular product or service through advertising. Advertising ensures that consumers acquire new habits, and instill those habits by telling the consumers how the product is of value to their money. Consumers should also be encouraged to continue using the products and services in the future (Hoyer and Maclnnis, 2008, p. 27).

According to Pride and Ferrel (2008, p.123), the main reason why organizations do not have strong brand loyalty is because they are not familiar with various ways of disseminating a strong and clear message that distinguishes their product with that of the competitor. In addition, the message should distinguish the product in a positive and memorable manner. The major challenge of organizations is to avoid the disadvantages of portraying a particular product or service as having negative image. An organization’s image should not be viewed in terms of the product and service attributes; the organization’s philosophies concerning environmental management, philanthropy, and ethical considerations are critical in influencing consumer behavior.

Societal Conscious Marketing

Most organizations have adopted marketing strategies that focus on societal needs. Each of these strategies is philosophical or operational concepts used by organizational leaders to enhance the objectives of their businesses. The following are some of the concepts widely used in organizations (Phillips, 2010, p. 45).

Product concept: products should be produced in large volumes since all of it can be sold to the consumers
Selling concept; products can only be consumed if they are heavily promoted
Product concept; consumers will buy high quality products that are within their price range
Marketing concept: specific customer demands can only be met if organization produces products that are equal or better than those of the competitor. In addition, the products should be priced lower than the competitor.
Societal marketing concept: This term involves marketing in a manner that does not harm the society, people, and the environment. Societal marketing concept is motivated by the need to satisfy direct customers and other constituents in the market.

Brand loyalty can be exercised in several ways. The main activities that organizations can do to improve brand loyalty include environmental friendly activities, philanthropy, ethical activities with local, national, and international communities, customers, and employees. Environmentally friendly activities can include recycling, waste reduction, and other strategies aimed at minimizing the organization’s impact on the environment. Philanthropic activities include engaging donations of money, food, facilities, and time. These activities are classified under the title known as cause related marketing (Kahren, 2009, p.36).

Brand Loyalty

According to Dutton (1997), organizations have been turning philanthropy activities inward towards their employees. This is done through paying them in order to volunteer for their favorite charities. She asserts that words like “ethics’, honesty, truth and trust are good sentiments. She, however, notes that they mean nothing if they are not adopted by organizations. Ethical activities include using different hiring practices and employee relations such as high moral values, fair pay, equal treatment, and equal opportunity for all workers. Organizations that do not treat workers fairly have the risk of lowering their brand image. Brand image should start with internal operations; there is no point of trying to show the external clients that business ethics are good while simultaneously engaging in unethical activities towards the employees. Employees play an important role in advertising the organization to outside clients more than any other marketing strategy.

The question of how brand loyalty affects product evaluation was examined by Brown and Dacin (1997). Their study looked into the differences between the impact of organization brand loyalty which include the organization’s ability to produce and deliver quality products and services and the corporate social responsibility’s impacts on consumers. In their first research, students analyzed their hypothetical scenarios. The outcome was that brand loyalty had a significant effect on the way consumers evaluated the product attributes and the overall image of the organization. Further, the authors found out that social responsibility had no direct impact on the organization’s image. Their second study found out that social responsibility became significant predictor of product loyalty in the consumers and its evaluation.

According to Kim (1996) product demand is determined by non-product factors such as cleanliness, public relations, atmosphere, advertising and the convenience of the brands’ locations. In any organization, quality of products can be determined according to the consumer attitude towards the product with other products available to the consumer in the market.

“Perceived quality is different from objective or actual quality, a higher level abstraction rather than a specific attribute of a product, a global assessment that in some case resembles attitude, and a judgment usually made within a consumer’s evoked set” (Zeithaml, 1988, p.4).

Zeitmal further assert that few consumers are able to analyze and measure the objective properties of a product. This is because the objective assessment depends on the verifiable standards, the objective measurement can be questioned because it depends on who set the standards.

Theoretical framework

The A Priori Approach

According to Lunn (2011), the theory introduces theories and concepts from other disciplines including behavioral sciences. The value of behavioral sciences has been used in consumer knowing what the consumer wants. Well known examples are included in the manifestations of motivational research and such attitude theories as those of Festinger and Fishbein. The A Priori approach involves giving the consumer an all embracing label such as “economic man”, “problem solver”, “learner”, and “existentialist”. The strength of the a priori lies in the organization and the systematic basis of knowledge provided about certain aspects of the consumer.

Brand Loyalty Theory

According to Katz (1960), Brand loyalty theory has three distinct dimensions. The first dimension is referred to as emotive tendency towards products and services. The emotive tendency refers to the consumer likes and dislikes which is manifested on how they purchase a particular brand in the market. The second dimension is known as evaluative tendency towards products and services. Katz refers to this tendency as positively biased evaluation of a product or service. Organizations use positive characteristics to define brand utili6ty to the customers. The evaluative tendency of the product or service can also be determined from past experience in using the brand.

Behavioral tendency towards the brand is the next dimension. Katz (1960) refers to the behavior tendency as the biased responses consumers have towards a particular product or service regarding its procurement, purchase and consumption characteristics. Consumer characteristics such as shopping, paying for the product, as well as its consumption determine the behavior tendency. Behavior tendency is developed after using the product for a long period of time. In addition, behavior tendency can be developed from good or bad tendencies toward other brands.

Black Box Theory of Behaviorism

Sandhusen (2000) assert that the black box model is an interaction of several perspectives concerning a specific brand. The perspectives include the stimuli, consumer characteristics, choice patterns and consumer responses. The focus of the organization is not in the internal processes within the customer: the organization focuses on the relation between stimuli and response of the customer. Stimuli are related to the marketing characteristics developed by an organization in order to lure the customer in purchasing of the brand. The environmental stimuli are determined by social factors such as politics, economy and the culture in which the brand is to be used. The black box symbolizes the buyer characteristics and their choice patterns, which determine their response towards a particular brand.

Hypothesis

This research focuses on the various factors that influence consumers’ brand loyalty towards a given brand. From the various factors that influence brand loyalty, below are the hypothesis derived.

H1: There is a positive correlation between brand loyalty product and brand name

H2: There is a positive correlation between brand loyalty and product quality.

H3: There is a positive significant relationship between brand loyalty and product design

H4: There is a positive significant relationship between brand loyalty and product price.

H5: There is a positive correlation between brand loyalty and promotion.

H6: There is a significant correlation between service quality and brand loyalty.

H7: There is a positive significant relationship between store environment and brand loyalty.

Research Methodology

The main objective of this research was to establish how brand loyalty influences cosmetics buying behavior of UK female consumers. This section also highlights the various processes undertaken in obtaining and analyzing the information gathered for this research. This includes a description of the research design and methods used in collecting the data that were analyzed to arrive at a conclusion in the study.

Research philosophy

Based on the nature and the topic to be studied, this research will be conducted on positivist philosophy. It will be based on this philosophy because the research will involve testing of hypothesis developed from deductive theory, involving measurement of observable social realities.

Approach

This research will be conducted on deductive approach based on hypothesis testing from the data collected. Data will then be analyzed to either confirm or disapprove the hypothesis.

Data Collection Methods

Data collection will consist of surveys, filling in questionnaires and conducting interviews with cosmetic consumers and dealers in London, UK. Qualitative evaluation shall be employed in this research besides using subjective techniques such as interviews and observations to gather relevant and substantive data. Quantitative approach is preferred for this research due to the varying experiences of the consumers of these products. Upon collecting data using interviews and questionnaires, the data will then be carefully analyzed. This shall be carried out using both the One-way ANOVA and the Pearson’s guideline to establish how brand loyalty influences consumer behavior with respect to cosmetic consumption in UK.

Questionnaire Design

In this research, a questionnaire was developed, and pilot tested through personal interviews with seven senior-most managers at Superdrug, which is the second largest health and beauty retail shop in UK. The questionnaire used for collecting data was divided into two segments: the first section concerns the demographics of consumers and the second were about brand loyalty factors. This research involved sampling randomly 400 female cosmetic consumer of between 18 to 42 years of age. In order to obtain a reliable data, the survey was distributed in London City at five major cosmetic shops. The malls included L’Occitane, Jo Malone, Floris London, Boots and Screenface, in addition to Superdrug retail shop. A total of 400 usable questionnaires were then returned and collected 60% response rate.

Table 1 reveals that age composition of those aged between 18-25 years were 25% of the respondents. Yet again, the table reveals that close to half of the respondents ages varied between 27-35 years. About 26% of the respondents were between the ages of 36-42. The sample survey was almost balanced at 51% for the married and 49% for the unmarried. With regard to education level, the surveyed respondent revealed that 72% of the respondent had at least a degree and 18% having completed high school. This implies that only 10% of the respondents had postgraduate degrees.

Data Analysis

This research used the One-way ANOVA to establish whether there is any significant correlation between independent variables (product quality, brand name, design, price, service quality, promotion, and store environment) and age and income the consumers interviewed. The main reason for adopting the One-way ANOVA as the most appropriate tool is that it was found to be the best for testing the hypothesis when at least two groups are measured on an interval scale. The purpose of the One-way ANOVA is to show the degree of variability of the sample values taken by considering to what extent the observation within each group differs and how much the group means differ. Apart from the One –Way ANOVA, the researchers also found it appropriate to use the Pearson Correlation for purposes of analyzing the relationship between the two variables, which are both ratio and interval-scaled. This is based on the fact that the correlation coefficients determined using the Pearson’s guideline is used to establish the degree and direction of the correlation, which is suitable for hypothesis testing. In this regard, the research used Pearson correlation principle to test the independent variables (product quality, brand name, price, promotion, design, store environment and service quality) that influenced consumer brand loyalty and to establish if there is any correlation between the variables.

Results

Table 2 below shows the Cronbach’s Alpha (coefficient alpha) of each of the variables tested. The findings reveal that all the variables have a high degree of reliability. Table 3, on the other hand, shows the seven autonomous variable factors of brand loyalty that were experimented during the research through questionnaires given out to the respondents. The results were also ranked using the Likert scale in the questionnaire: strongly disagree, disagree, neutral, agree and strongly agree. The result is then gotten from the uppermost average score of brand loyalty factors based on the answers provident by the respondents. In overall, the result reveals that product quality is the most vital factor. In UK environment, most respondents choose product quality as the core aspect that influences their brand loyalty.

The One-way ANOVA scrutiny of the factors of income level and brand loyalty was conducted. This was meant to establish if there could be any significant relationship between the two variables. Here, there are four variables that are most significant according to the study, which include brand name (0.000) promotion (0.004), product quality (0.009) and service quality (0.038). In overall, the result shows that, in UK, majority of the consumers prefer brand name, promotion, and product and service quality as factors of brand loyalty. According to table five below, only two variables that are significant. These are price (0.014) and the brand name (0.050). An analysis of this data reveals that, among the age groups surveyed, female consumers aged between 36-42 prefer brand names more compare to other age groups.

Test of Hypothesis

As revealed in Table 4 below, brand name was found to have considerable positive relationship with brand loyalty. The results of this research revealed that consumers preferred brand image only when they foresee positive functions or benefits from the product in question. It is then that they will recommend the brand, react positively to the price premium and accept brand extension to other categories of products within the same brand.

The quality of the products was shown to have a positive correlation with brand loyalty. This kind of correlation is demonstrated based on Cohen’s (1988) principle, in which a correlation of (r=0.0302) is considered moderate. Therefore, based on these statistics, the finding showed that product quality has a lot of significance with regard to consumer decision-making process. The findings of this research revealed that brand loyalty and price had a positive relationship. In this case, price was found to be more important for any average consumer in the market. Nevertheless, those consumers with high brand loyalty were not very much sensitive to prices. The research showed that as long as these consumers were satisfied with a given brand, they would continue buying the product with the same brand irrespective of the price increase. On the other hand, the findings did not show any correlation between product design and brand loyalty. Out of all the seven variables tested, many consumers did not consider product design as an important factor for UK consumers to become loyal to a given cosmetic brand.

According to the findings, promotion and brand loyalty were found to have a positive relationship. Product promotion was considered as one of the most valuable factor in determining a consumer’s brand loyalty. This includes the use of sales promotions, commercial adverts, personal and public selling. In fact, the research revealed that many female consumers spent considerable time reading product labels before purchasing the product. The research also revealed that brand loyalty and service quality had a positive relationship. Findings showed that service quality encouraged many consumers to prioritize a store. The result indicated that salesperson consumer relationship results in long-term orientation of customers towards a given store. Similarly, trust developed in the salesperson seems to relate to the overall discernment of the store’s service quality, which leads to customer’s total satisfaction with the store.

The findings also showed that the environment of the store is also positively related to brand loyalty. The store environment is seen as major factors that influence consumer brand loyalty. This research revealed that many consumers were much sensitive to attributes of the store such as a variety of selection, merchandise displays, packing space, and ease of accessibility to vehicles and the overall goodwill of the store in buying products.

Table 1. Demographic Sample Description

	Frequency	Percentage (%)
Age18-2527-3536-42	100196104	254926
Marital statusMarriedUnmarried	204196	5149
Education:High SchoolUndergraduatePostgraduate	7228840	187210

Table 2. Reliability Analysis of Brand Loyalty factors

Variables

Alpha

Product QualityBrand namePricePromotion

Design

Service Quality

Store Environment

Brand Loyalty

0.65720.70280.66180.6974

0.7482

0.8200

0.7139

0.6646

Table 3. Brand Loyalty factor Ranking

Factor of Brand Loyalty	Ranking	Mean/Average
Product Quality	1	3.68
Q1. The brand is durable than others		3.69
Q2. The materials used by the brand are natural		4.11
Q3. The brand has sufficient color		3.65
Q4. The brand has good functional quality		3.77
		Mean Average 3.80
Design	2
Q1. The brand provides wide variety of designs		3.72
Q2. Designs of the brand are suitable for me		3.79
Q3. Designs of the brand have distinctive features		3.73
Q4. Designs of the brand are trendy and fashionable		3.85
		Mean Average 3.77
Brand Name	3
Q1. The brand is trustworthy		3.70
Q2. Brand image and name attract me to buy		3.82
Q3. Brand Name is selected irrespective of price		3.41
Q4. Brand reveals my individual personality		3.96
		Mean Average 3.72
Promotion	4
Q1 Ads of the brand is attractive		3.64
Q2. Ads of the brand attract me towards purchasing the product		3.44
Q3. Product displays are entrancing		3.62
		Mean Average 3.56
Store Environment	5
Q1. The brand has good store location		3.64
Q2. There are adequate outlets for the brand		3.76
Q3. The interior show is gorgeous		3.50
Q4. Music and color inside the store are beautiful		3.36
		Mean Average 3.57
Price	6
Q1. Increases of price not hinder me to purchase		2.99
Q2. The brand provides goods value for money		3.52
		Average Mean 3.56
Service Quality	7
Q1The salesmen in the store are knowledgeable		3.21
Q2. The salesmen in the store are willing to help		3.39
Q3. Vendor of the store is and courteous and friendly		3.18
Q4Vendors in the store have neat appearance		3.33
		Mean Average 3.28

Table 4. Significance of Brand Loyalty factors with brand loyalty

Variables	Pearson Correlation	Sig. (2-tailed)a
Product Quality

Brand name

Price

Promotion

Design

Service Quality

Store Environment

Brand Loyalty0.304

0.561

0.466

0.411

0.140

0.333

0.369

0.002

0.005

0.006

0.162

0.001

0.010

Conclusions and Findings

Various studies have focused on understanding the concept of brand loyalty and the factors influencing it. Product attributes, after sale service, marketing capabilities, perceived quality or aesthetics, depth of product line as the key differencing factors influencing the behavior of purchasers. Brand commitment is also a necessary condition for true brand loyalty to occur. Packaging, new product trial, price, store location corporate social responsibility and advertisements influence consumer behavior. While several factors influencing brand loyalty have been studied in the extant literature, this research has revealed that brand loyalty influences consumer behavior. Consumers may also compel entrepreneurs to change the brand image in terms of product or service quality. Similarly, the brand image has been proven to satisfy the consumer expectations.

The dimensions of brand loyalty theory clearly depict how consumer’s tastes and preferences influence their buying power. This is followed by an assessment of the product to decide if they will buy it or not. The assessment also referred to as evaluative tendency compels organizations to brand their products to attract customers, an aspect of competition. Product branding can be enhanced by advertising, changing the brand name and promoting it to improve recognition. The behavioral tendency proposed by Katz is creations of a bandwagon effect among consumers to enable them continue buying the product. The initial products are branded in a way of attracting customers though subsequent ones show depreciation, a strategy used by marketers. Branding through advertisement show some favor of the product while despising others, thus discouraging customers from using those other products whether related or not. The black box model looks into the customers willingness created by the company’s emphasis of the product. The characteristics of the buyer determine their choice of product.

From this research, the brand name and image has a significant impact on customer choice with all factors kept constant. As part of consumer behavior, every brand has some features which consumers always associate the brand with. They consume a given brand on the basis of its features. Again, the consumers take into account the quality, and price while making buying decisions. The point of purchase is another factor that comes to a buyer’s mind. Being a highly demanded product by women, they want to buy cosmetics from a good reputed and trustworthy purchase point. Exhibition malls serves as favorite consumer purchase point.

Other factors like age, occupation and education of consumers will influence buying decisions following the way each group has been exposed about the product. Young people will have more taste of cosmetics because they want to look good while old ones are slightly less concerned with beauty. Exposure and knowledge of a product affects its demand. The raw materials making the brand also play a vital role of its choice. If a sample cosmetic is known to contain harmful chemicals, it loses its market. An organization will get to know what factors influence the purchase decision of a consumer before branding the product. Accordingly, it will direct its marketing effort so that it can get potential customers to purchase the products.

Subject Issues Learnt

Brand loyalty is the consumer’s conscious or unconscious choice that is expressed intentionally or a behavioral pattern to repurchase a brand again. This happens following the perception of the consumer that the brand provides the right image, characteristics or quality based on reasonable price. Hence, consumer behavior is habitual. Beginning from product design to creation of a mature brand, good marketing strategies, which depend on a clear understanding of the memory, motivation, learning and decision processes, influence the consumer’s choice. Launching of new products, market segmentation, timing market entry and brand management are all related to the theoretical framework employed in the research. Branding is by far and large the most important factor influencing the product’s success or failure in the market place. It can also greatly impact the company’s perception by the buying public. Brand is not only a company’s product but also a representation of the individual company and that is where the core of brand loyalty falls.

Brand loyalty is simply more than the consumer’s commitment to repurchase a product. It incorporates the high attitude towards the product demonstrated by repeated buying. This loyalty is a business investment because of the high prices being paid by the customers. Depending upon the nature of the product versus basic necessities or luxuries, consumers a single or brand loyalty. This brand loyalty is affected by their brand choice as well as by their store loyalty behavior. The bondage of brand loyalty is strong especially through repeated advertising and promotional schemes. The main factors that influence brand loyalty are the quality of product, habit of use and regular availability of the product. Searching for a product means mental and physical information about products, prices and shops. Consumer information is thus a marketing tool that can be used to understand the interactions between a specific target segment and marketplace so as to meet the consumers’ needs and wants.

Brand image or the good reputation of a particular service ensures that it maintains a competitive advantage over other products and services. An organization’s brand is valuable strategic asset in achieving goals and objectives. Brand loyalty can be referred to as the consumer decision; whether conscious or unconscious concerning the use of a product or service. It may also refer to the intention to buy or use a particular product for a long duration of time. Brand loyalty is achieved due to the right features, and the quality of the brand. Quality of the product must be at the right price for the consumer to perceive the brand as being loyal to their needs. Organizations can change consumer behavior concerning a particular product or service through advertising.

The reasons why people become brand loyal are because the favored brand satisfies the consumer needs and wants than the competitors do. Again, there is a reduction of perceived risk, sticking with a favorite brand improves certainty. Brand loyalty helps maintain self image in reinforcing the customer’s self concept and confidence. It is also the path to least resistance. Marketers use strategies like in-store and o-location impulse triggers, notably point-of purchase displays. Consumer innovativeness is the predisposition to buy new and different products rather than remain with the previous choices and consumption patterns.

Consumer behavior is influenced by social, cultural, Psychological and personal factors. Culture influences buying behavior depending on the country, geographical region, religion, nationality and racial groups. The societal classes such as wealth distribution, education and occupation impact the behavior of consumers towards a product. Social factors like family, reference groups, roles and statuses influence buyer behavior. Personal factors include lifestyle, economic situations, age, occupation, personality and self concept. Perception, motivation, learning, beliefs and attitudes are psychological factors affecting consumer behavior. Marketers should, therefore, look into these factors in branding particular products.

References

Brown, T. and Dacin, P., 1997. The Company And The Product: Corporate Associations And Consumer Product Responses. Journal Of Marketing, 61 (1), pp.68-84.

Dutton, G., 1997. Warming The Cold Heart Of Business, Management Review 86 (6), pp.17-20.

Hoyer, W. and Maclnnis, D., 2008. Consumer Behavior. New York: Cengage Learning.

Kahren, F., 2009. Brand Loyalty. Washington D. C: Whimsical Publications.

Katz, D.,1960. The Functional Approach To The Study Of Attitudes. New York; Public Opinion Quarterly.

Kim, H., 1996. Perceptual Mapping of Attributes and Preferences: An Empirical Examination of Hotel FandB Products in Korea. International Journal of Hospitality Management 15 (4), pp.373-391.

Lunn, J., 2011. Models Of Buyer Behavior: Consumer Decision Process Models. New York: Marketing Classics Press.

Phillips, C., 2010. Brand Loyalty. New York: Youwriteon.

Pride, W., and Ferrell, C., 2008. Marketing. New York: Cengage Learning.

Sandhusen, R., 2000. Marketing. London: Routledge.

Zeithmal, V., 1988. Consumer Perceptions Of Price, Quality, And Value: A Means-End Model And Synthesis Of Evidence, Journal Of Marketing, July, pp2-22.

Click Here To View Marketing Dissertation Topics

How Does Brand Loyalty Influence Customer Behavior

How Does Brand Loyalty Influence Customer Behavior?

Research objectives

Specific research objectives include:

To find the relationship between consumer behavior and brand loyalty.
To find out whether consumer behavior leads to change in the brand image quality, for instance, product quality or service quality.
The influence of customer satisfaction on the brand’s image
Does consumer behavior affect brand image?
Does consumer behavior lead to change in the brand image quality?
Does customer satisfaction affect brand image?

Research questions

Literature Review

Societal Conscious Marketing

Product concept: products should be produced in large volumes since all of it can be sold to the consumers
Selling concept; products can only be consumed if they are heavily promoted
Product concept; consumers will buy high quality products that are within their price range
Marketing concept: specific customer demands can only be met if organization produces products that are equal or better than those of the competitor. In addition, the products should be priced lower than the competitor.
Societal marketing concept: This term involves marketing in a manner that does not harm the society, people, and the environment. Societal marketing concept is motivated by the need to satisfy direct customers and other constituents in the market.

Marketing Dissertation Examples