An investigation of the role of brand image on consumer loyalty

Article history: Received May 12, 2013 Received in revised format 12 August 2013 Accepted 28 September 2013 Available online October 6 2013 This paper presents an investigation on the role of brand image on customer loyalty on rubber industry. The proposed study designs a questionnaire in Likert scale consists of 27 questions, distributes it among some Iranian experts in rubber industry and analyzes it based on principal component analysis. During the survey, the number questions are reduced to 23. Cronbach alpha is calculated as 0.812 and Kaiser-MeyerOlkin Measure of Sampling Adequacy and Approx. Chi-Square are 0.671 and 2375, respectively. Based on the results of our survey, we have derived six factors including penetration strategy, infrastructure characteristics, competitive pricing, target marketing strategy, communication strategy and market characteristics. © 2013 Growing Science Ltd. All rights reserved.


Introduction
Brand is one of the most important factors for building trust among customers and rubber industry is one of them (Franco, 1990;Aaker, 2010;Leuthesser et al., 2011;Hsieh & Li, 2011).During the past few years, there has been a high competition in rubber industry, which has reduced profit margin in this industry and only efficient and well known rubber producers could survive (Stigler, 1961;Stiglitz & Weiss 1981).Therefore, there is a necessity to investigate brand characteristics and detect how to form a good brand in such competitive market and there are literally many studies associated with how to build brand.Erdem andSwait (1998, 2004), for instance, studied the impact of brand credibility, trustworthiness and expertise, on brand choice and consideration across multiple product categories.They reported that brand credibility could increase probability of inclusion of a brand in the consideration set.Brands may affect various stages of consumer choice processes, and hence, various components of consumer utility functions.Previous conceptual and empirical work focused on the effects of brands on consumer perceptions of tangible and intangible product attributes.Erdem et al. (2002) extended the work on brand effects with information economics to find out whether consumer price sensitivity could influence overall attractiveness or utility.They investigated how the impact of product price on consumer utility was moderated by brand credibility.To explore the impact of brand credibility on consumer price sensitivity across categories that could involve different levels of consumer uncertainty, they applied the analysis for four products including frozen concentrate juice, jeans, shampoo and personal computers.These categories varied in the degree of potential consumer uncertainty about product attributes, as well as in a number of other categoryspecific features, which could impact consumer sensitivity to uncertainty.They reported that brand credibility could decrease price sensitivity and although the direction of the effect was the same, the magnitude of brand credibility's impact on consumer choices and price sensitivity could be different across product categories, as a function of product category characteristics, which impact potential consumer uncertainty and consumer sensitivity to such uncertainty.Sweeney and Swait (2008) studied the important additional impact of the brand in managing the churn of current customers of relational services.They tried to find out whether the credibility of the brand could underlay the effect that the brand could play in this process.In their survey, brand maintained a substantial role on managing long-term customer relationships, and reported how the usual tools of customer relationship management, satisfaction and service quality influenced brand credibility.Berry (2000) presented a service-branding model and stated that branding was not just for tangible goods and it could be considered as a principal success driver for service organizations as well.Gilliland and Bello (2002) studied two sides to attitudinal commitment including the impact of calculative and loyalty commitment on enforcement mechanisms in distribution channels.Wray et al. (1994) presented a neural network with two outcome components of relationship quality, relationship satisfaction and trust, and five input antecedents including the salesperson's sales orientation, customer orientation, expertise, ethics and the relationship's duration.Harris and Goode (2004) studied online service dynamics on four levels of loyalty and the pivotal role of trust.

The proposed study
This paper presents an investigation on the role of brand image on customer loyalty on rubber industry.The proposed study designs a questionnaire in Likert scale consists of 27 questions, distributes it among some Iranian experts in rubber industry and analyzes it based on principal component analysis.Cronbach alpha is calculated as 0.812.In addition, Kaiser-Meyer-Olkin Measure of Sampling Adequacy and Approx.Chi-Square are 0.671 and 2375, respectively.Since the proposed study of this paper uses principal component analysis and the method is sensitive to skewness of the data we have carefully monitored the data and removed four questions leaving it to have 23 questions.Table 1 summarizes the results of our survey on communalities.Fig. 1 demonstrates the results of Scree plot.

Fig. 1. The summary of Scree plot
As we can observe from the results of Fig. 1, there are six factors, which could be extracted for further studies.In addition, as we can observe from the results of communalities given in Table 1, most factors are well above the minimum acceptable level of 0.5.Table 2 demonstrates the results of factor analysis on these factors.Based on the results of our survey, we have derived six factors including penetrating strategy, infrastructures, competitive pricing, targeting appropriate market, communication strategy and crystal clear characteristics.

The results
In this section, we present details of our findings on six influencing factors.

The first factor: Penetrating strategy
The first factor is associated with penetrating strategy.Table 3 demonstrates details of our survey.As we can observe from the results of Table 3, "Social values" is the most important factor, followed by improvement on consumer's perception, consumer's expectation from a product and consumer preferences.

Table 3
The summary of factors associated with penetrating strategy

The second factor: Infrastructures
Infrastructure is the second important factor and it includes four factors, which are summarized in Table 4 as follows, According to the results of Table 4, "Rules and regulations" is number one priority followed by "Government support", "Environment issues" and "Nano technology".

The third factor: Competitive pricing
Competitive pricing is another important factor with three items summarized in Table 5.According to the results of Table 5, "replacement products" is the most important component in organizational assessment followed by "product characteristics" and "pricing strategy".

The fourth factor: Targeting appropriate market
Targeting appropriate market is another important factor with three items summarized in Table 6.
According to the results of Table 6, "Knowledge management" is the most important component in organizational assessment followed by "Customer oriented organization culture", "Having a unified instruction" and "Outsourcing mechanisms".

The fifth factor: Communication strategy
Communication strategy is another important factor with three items summarized in Table 7.
According to the results of Table 7, "Creating trust among customers" is the most important component in organizational development followed by "Customer trust to brand", and "Communication with customers".

Table 7
The summary of factors associated with organizational development 3.6.The sixth factor: Crystal clear characteristics Crystal clear characteristics are the last important factors with two items summarized in Table 8.According to the results of Table 8, "Exclusive product characteristics" is the most important item followed by "Distinguished brand".

Conclusion
This paper has presented an investigation on the role of brand image on customer loyalty on rubber industry.The study was performed among some Iranian experts in rubber industry and the study has determined six factors including penetration strategy, infrastructure characteristics, competitive pricing, target marketing strategy, communication strategy and market characteristics.In terms of penetrating strategy, "Social values" has detected as the most important factor, followed by improvement on consumer's perception, consumer's expectation from a product and consumer preferences.Infrastructure was the second factor in our study where "Rules and regulations" was number one priority followed by "Government support", "Environment issues" and "Nano technology".Competitive strategy was another important factor where "replacement products" was the most important component in organizational assessment followed by "product characteristics" and "pricing strategy".Targeting appropriate market was another important factor with three items where "Knowledge management" was the most important component in organizational assessment followed by "Customer oriented organization culture", "Having a unified instruction" and "Outsourcing mechanisms".Communication strategy is another important factor with three items where "Creating trust among customers" was the most important component in organizational development followed by "Customer trust to brand", and "Communication with customers".Finally, Crystal clear characteristics are the last important factors with two items where "Exclusive product characteristics" is the most important item followed by "Distinguished brand".

Table 1
The summary of communalities

Table 4
The summary of factors associated with infrastructure

Table 5
The summary of factors associated with competitive pricing

Table 6
The summary of factors associated with targeting appropriate market

Table 8
The summary of factors associated with Intelligence data strategies