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Why it is important for advertisers to understand brand loyalty before selecting the target audience

for an advertising campaign and evaluate the selection procedure

Héctor Soriano RodríguezHéctor Soriano RodríguezBelén Ondiviela MínguezBelén Ondiviela Mínguez

Glasgow Caledonian UniversityGlasgow Caledonian UniversityErasmus students - University of Zaragoza - Erasmus students - University of Zaragoza - SpainSpain

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1.- Target audience selection1.1.- Definition1.2.- Researches of consumer behavior

2.- The Selection Process

3.- Understanding the Target Audience

3.1.- Introduction

3.2.- Variables used to describe/profile an audience:- Demographics- Geographics- Socioeconomics- Psychographics

Table of Contents

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4.- Brand Loyalty groupings

4.1.- Percy, Elliot & Rossiten

4.2.- Reasons for doing different levels of loyalty- Strategic implications- Cost implications of loyalty

4.3.- Loyalty

4.3.1.- Link between Attitudes & Behaviour

5.- Different roles participating in a purchase decision

6.- Case study: Apple

7.- General findings

Table of Contents (2)

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1.- Target audience selection

1.1.- Definition“A target audience is the primary group of people that something, usually an

advertising campaign, is aimed at appealing to. A target audience can be people of a certain age group, gender, marital status, etc. (ex: teenagers, females, single people, etc.) A certain combination, like men from twenty to thirty is often a target audience” source: www.wikipedia.org

After the process of setting objetives…the next stage of advertising planning is selecting the target audience

-Distinguished from market segmentation (i.e. target market) (Percy & Elliott 2005)

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1.- Target audience selection (2)

1.2.- Researches of consumer behavior

– Profiting from the “80-20 Rule of Thumb”

– Why a brand’s most valuable consumer is the next one it adds

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2.- The Selection Process

The process of target audience selection is consequence of category and brand attitudes

The next phase in the target marketing process involves two steps (Belch, G. E. and Belch, M. A. (2004), Advertising and Promotion: An Integrated Marketing Communications Perspective, 6th Edition, Mcgraw-Hill)

1.- Determining how many segments to enter

2.- Determining which segments offer the most potential

Target Market

Target Audience Target Audience

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Discovering the Target Audience begins with…

source: google images

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3.- Understanding the Target Audience

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Understanding the Target Audience (2)

There are several variables used to describe/profile an audience the best-known are:

– Demographics Socioeconomics

– Geographics

– Psychographics

See examples

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Demographics

Age Race Life stage Birth era Household size Residence tenure Marital status …

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Geographics

Region (Northeast,South…) City size (Under 10,000; 10,000-24,999…) Density (Urban; rural…) …

Geodemographics: mix of GI + DI

* GI: geographic information * DI: demographic information

See examples

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Socio-economic (inside of demographic category)

Income (<£15,000; £15,000-£24,999…) Education (high school graduate,…) Occupation (service,farming,forestry,…) …

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Psychographics

Personality (introverted,ambitious…) Values (achievers,believers,strugglers,…) Lifestyle

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4.- Brand Loyalty groupings

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4.1.- Percy, Elliot & Rossiter

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4.2.- Reasons for doing different levels of loyalty

A - Strategic implications

B - Cost implications of loyalty

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A- Strategic implications

4 main advertising strategies

1.- Change attitudes: frustrated/switchables

2.- Maintain positive attitudes: loyals

3.- Build positive attitudes: vulnerables

4.- Remove barriers to switching: non-users

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Change attitudes

http://www.mcdonalds.com/.

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Maintain positive attitudes

http://www.audi.com

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Build positive attitudes

http://www.bmw.com

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Remove barriers to switching

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B- Cost implications of loyalty

Marketers must consider the relative cost-effectiveness of the brand loyalty groups for existing and potencial consumers

Low

Low-Moderate

Moderate

Moderate-High

Very High

Moderate-High

Moderate

Moderate-High

Loyal

Vulnerable

Frustrated

Swichable

Loyalty Loyalty GroupingsGroupings

Percy & Elliott (2005)

Cost to Protect or Build Cost to Protect or Build UsersUsers

Cost to Attract Cost to Attract

Non-UsersNon-Users

Cost of customer acquisition and maintenance is less than bring new customers to the company

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Cost implications of loyalty (example)

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4.3.- Loyalty

1.- Based on attitudes

2.- Based on behavior

3.- The link between attitudes and behavior

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4.3.1.- Link between Attitudes & Behaviour

A dinamic model of customer loyalty

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…attitudes & behavior studies

To do studies about behaviour and attitudes it is necessary to make surveys for having information about the consumers.

In Attitudinal dimension we measure: for example the intent

to repurchase, willingness to recommend and other probable market actions…

In Behavioural dimension we measure: for instance, the repeat purchasing, volume or frequency of purchasing, returns, debt, complaints and interactions…

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High loyals with strong attitudes were almost three times as likely to remain loyal to the brand (than High loyals with low attitudes)

Moderates loyals with strong attitudes were almost four times as likely to switch to High Loyalty to the brand

Low Loyals with strong attitudes were eight times as likely to convert

…attitude influence behavior (brandbuilder model)

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…a predictable model

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5.- Different roles participating in a purchase decision

initiator who suggests the purchase

influencer who recommends or discourages purchase

decider who makes the actual choice

purchaser who does the actual purchasing

user who consumes or uses the product or service

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A store just for Apple

How Apple creates Brand Loyalty (1)…

Complete solutions

Are you a Mac?

Varied products

Proprietary formats

Media fodder

Education sales

Products that deliver

Outsourcing unpleasantness

Consistency New innovations Attractiveness

6.- Case study: Apple

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Brand EngagementBrand Engagement the process of forming and attachment between a person and a brand

How Apple creates Brand Loyalty (2)……- IMPLICATIONS

Creating changes in Creating changes in perceptions, perceptions,

attitudes,beliefs and attitudes,beliefs and behavioursbehaviours

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…using Brand Loyalty Apple gets…

Better customer experience

More loyalty customers

Improve business results

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See some of its ads…

Source: http://www.apple.com/es/getamac/ads/

“ I’m a Mac ” campaign

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7.- General findings

- The key to effective marketing is identifying and understanding your target audience

- Why companies should use Brand Loyalty? Easy answer: Cost of customer acquisition and maintenance is less than bring new customers to the company

- Brand loyalty is a measure of the attachment that a customer has to a brand

- Customer loyalty is an indicator of market success and of the strength of a brand

- Brand loyalty means less vulnerability to competitive marketing actions and marketing crises …(eg. Coke)

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References

http://www.insidecrm.com/features/strategies-apple-loyal-customers/ www.wikipedia.org Most of images from: http://images.google.co.uk/imghp?oe=UTF-8&hl=en&tab=wi&q= http://www.caci.co.uk/acorn/ http://www.1to1media.com/weblog/ www.morebusiness.com/running_your_business/marketing/ah_brand_rec.brc www.psych.umn.edu/courses/spring07/borgidae/psy5202/lectures/attitude

%20behavior%20relations.ppt www.mte.gov.br/pnmpo/como_desarrollar_la_lealdad_del_cliente.pdf Customer satisfaction and loyalty in a digital environment: an empirical test

Jean Donio', University of Paris II, Paris, France Paola Massari, e-Business Management School, ISUFI, University of Lecce, Lecce, Italy Giuseppina Passiante, e-Business Management School, ISUFI, University of Lecce, Lecce, Italy

Htttp://www.apple.com Advertisements (demographics,…) Available from the World Wide Web: http://

adsoftheworld.com/ [accessed from 24 October to 6 November 2007]

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Bibliography

Percy, L., Rossiter, J. R. and Elliott, R. (2001), Strategic Advertising Management, Oxford 

Yeshin, T. (2006), Advertising, Thomson Learning, Chapter 6 Belch, G. E. and Belch, M. A. (2007), Advertising and Promotion: An Integrated

Marketing Communications Perspective, 7th Edition, Mcgraw-Hill Anschuetz, N. (1997), ‘Profiting from the ’80-20 Rule of Thumb’, Journal of

Advertising Research, Nov/Dec, pp51-56. Anschuetz, N (2002), ‘Why a Brand’s Most Valuable Consumer is the Next One it

Adds’, Journal of Advertising Research, Vol. 42, No. 1, pp15-21 Baldinger, A. and Rubinson, J. (1996), ‘Brand Loyalty: The Link Between Attitude

and Behaviour’, Journal of Advertising Research, Vol. 36, No. 6, pp22-34. Baldinger, A. L.. and Rubinsone, J. (1997), ‘The Jeopardy of Double Jeopardy’,

Journal of Advertising Research, Nov/Dec, pp37-49.

Thank you for your attentionThank you for your attention

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Examples of GeodemographicsTopic: Cars Postcode: G4 0BA (Glasgow Caledonian University)