Internet effecting brand loyalty

17
DO INTERNET TECHNOLOGIES THREATEN BRAND LOYALTY ? By : Suniel Kumar Syed Wassem Niki Sean Benn DO INTERNET TECHNOLOGIES THREATEN BRAND LOYALTY ? SUNIEL KUMAR SYED WASEEM NIKI BENN

Transcript of Internet effecting brand loyalty

Page 1: Internet effecting brand loyalty

DO INTERNET TECHNOLOGIES THREATEN BRAND LOYALTY ?

By :Suniel Kumar

Syed WassemNiki Sean Benn

DO INTERNET TECHNOLOGIES THREATEN BRAND LOYALTY ?

SUNIEL KUMARSYED WASEEMNIKI BENN

Page 2: Internet effecting brand loyalty

• Internet technologies may not kill off brands, but they certainly magnify both the

bad and good decisions of marketers. - James Heskett

• Experts say, "If you have more information to make what you consider to be an

informed choice, why would you have to be brand loyal?" Consumer loyalty, they

continue, "will vary and fluctuate on a technological innovation/change (loyal one

day and maybe not the next).

• “ Based on personal experiences, experts also say that superior product and service

on the Internet could never have happened before and poses a threat to brand

loyalty."

Page 3: Internet effecting brand loyalty

Don Dea's InsightThere are two predominant sides to the discussion of this question.

• One is that the amount of information about products and services is becoming so

voluminous that it will lead to increased consumer confusion. As a result, the use of

surrogates (such as brands) in our purchasing decisions will lead to greater brand

loyalty, justifying today's massive expenditures to preserve brands.

• The other view is that the quality of Internet "technologies," such as search and

feedback mechanisms, is improving faster than the proliferation of information. This

will give users of the Internet the upper hand in the battle for access to information

and the ability to organize it, value it (based on feedback from users), and use it for

decision-making.

Page 4: Internet effecting brand loyalty

Technology Erodes Brand Loyalty• Rapid innovations in consumer technology have provided buyers with new tools for

discovering, comparing, evaluating, choosing and experiencing brands.

• Smartphone app ShopSavvy literally expands buyers’ choices on the spot and offers

alternative products .

• Ex : Amazon’s customers have increasingly become loyal to the channel rather than to the

products within.

• Shopping sites like Bizrate, Google Products or Expedia offer shoppers both product and

channel comparisons, increasing the likelihood shoppers will find a new brand or a better

deal to entice them away.

• Armed with these technologies, customers are becoming increasingly brand agnostic( non-

believers nor values the power of a brand).

Page 5: Internet effecting brand loyalty

Loyalty Redefined

•Loyalty needs to be redefined in the current marketing and technology environment. Rather than the consumer being loyal to the brand, the brand now needs to be loyal to the consumer.

•One example of being consumer-loyal would be providing hyper-customized customer service, such as using all the data now available — purchase data, behavioral data, location data, etc. — to meet consumers’ needs, perhaps even before they are aware of them.

Page 6: Internet effecting brand loyalty

•Social Media and Internet, may be weakening influence of brand loyalty•Despite importance of brand awareness, growth of search engines can reduce the influence of branding.•Consumers influenced by products that rank highest in search engines, rather than by traditional brand awareness. •Social networking having a similar effect.•User generated product reviews, etc.

Page 7: Internet effecting brand loyalty

EVERYONE IS A CRITIC NOW

Page 8: Internet effecting brand loyalty

Damaging of Brand value via online

• While most successful brands are already acutely aware of consumer opinion around

their products, it is now more important than ever for brands to consult and consider

their consumers every step of the way, particularly when making changes.

• When a company changes a consumer’s product, it can even be seen as a personal

assault.

• When they feel slighted by a brand, these consumers take to the internet, armed with

Twitter, Facebook and blogs to voice their thoughts on any and every product. Such

comments have the potential to damage a brand, depending on how the company

reacts to the criticism.

Page 9: Internet effecting brand loyalty

EXAMPLE

• Domino’s Pizza recently announced it would post unfiltered customer

comments on a Times Square billboard in New York City, following a bout of

negative publicity that began with an unfortunate YouTube video, and resulted

in the company’s ad agency conducting focus groups that revealed a less-

than-rosy public opinion about the quality of Domino’s food. By making

changes to their menu and letting customers judge the results, Domino’s is

combining the social media comment with a traditional out-of-home ad

space, resulting in a relevant campaign that has the potential to give the

brand a much-needed boost.

Page 10: Internet effecting brand loyalty
Page 11: Internet effecting brand loyalty

The Role Of Mobile When It Comes To Brand Loyalty

• The number of consumers using their Smartphone's and tablets to make a purchase, Surely by now you know ours is a mobile world where our Smartphone's have become an extension of our lives.

• A survey conducted by Aisle Buyer revealed that nearly 75% of consumers would switch brands if offered real-time discounts and promotions that were delivered to their Smartphone's in real time while they were shopping in a store.

• It’s becoming more true than ever before that the product or service that offers the most value is most often bought. Certainly that is true for people who don’t have much in the way of disposable.

Page 12: Internet effecting brand loyalty

Source:

Page 13: Internet effecting brand loyalty
Page 14: Internet effecting brand loyalty

•The consumer's ability to easily access product and company information via the internet makes brands both stronger and weaker.

•With new and easy access provided by the Internet, the consumer has given himself/herself more choices.

• In the long run what will happen is that the weaker brands will not do well and will be driven out of business as the better brands will gain market share, thrive and strengthen.

•Businesses that provide a good service and a good product at a fair price have nothing to fear from the Internet or the Internet user's hunger for product information.

WHAT IS THE BIGGEST THREAT TO LOYALTY TODAY ?

Page 15: Internet effecting brand loyalty

•Businesses that do not provide good service, good products or fair pricing will be exposed for being sub-par.

•It has become so easy for consumers to post a positive or negative review on all types of products and services that any business that thinks it can get away with price-gouging and poor customer service is only diluting itself; time and technology are clearly NOT on the side of businesses that operate that way.

Page 16: Internet effecting brand loyalty

•From my personal experience, I have come across a consumer using gillette razors for decades and he always hated the feeling of being taken advantage by their over-priced blades (but free handle!). •He recently discovered Harrys blades online. Not only do they cost less, they look nicer, are delivered to the doorstep without shipping cost or tax. •This type of product and service could never have happened before and in his opinion poses a treat to brand loyalty.

Page 17: Internet effecting brand loyalty