Role of Product Branding in Building Customer Loyalty and Life Time Value

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Economic success of any organisation and business depends on maintaining its customers to keep purchasing their products and offering (Rust, Lemon and Zeithami, 2004, p. 90) that is why firms all over the world have made huge efforts in retaining customers. The repetitive behaviour to purchase has a reflection on the customer loyalty’s behavioural dimension (Dick and Basu, 1994, p. 99).

Besides the brand name, a brand also possesses many different attributes like packaging type and quality of a product that consumers might take in account when buying products and in some cases the attributes of the product might increase customer’s loyalty in comparison to brand name.

In sectors where brands are well established loyalty for brand is highly important while in fragmented markets where production in not necessarily very large and brands are not very known the brands do not compete solely on their names. The communication of product bases on its attributes is very important in some markets for example in the food industry which have large number of smaller brands worldwide brand names do not compromise of crucial cues for simplifying choices of the consumers. Consumers aim at simplifying their choices might make use of attributes of the product to drive brand loyalty for instance there was a research carried out by Kincaid (2003, p. 72) in which the loyalty of Australian consumers was investigated based on the attributes of the wine they preferred such as variety, price, brand and region. The findings of this research suggests that consumers show greater loyalty to the price and various comparisons to the brand regions and the importance of attributes in comparison to the name of brand. This paper discusses importance of customer loyalty and the role that product branding has on the customer loyalty at Nestle.

- Profile of the Company

Nestle is selected as case study for this research, Nestle is a Swiss brand and is one the leading company in health and wellness. Nestle started in 1905 by Henry Nestle as a merger between two companies and now it has 447 factories in 86 countries around the world and employs roughly about 333,000 employees. Their main line of products include tea, coffee, baby food, dairy products, Breakfast cereals, baked goods, refrigerated products, chocolates, Performance nutrition, pet food, drinks, bottled water, ice cream and confectionaries. Nestle in also one the main shareholder in Loreal Paris cosmetic company. Nestle was listed at the top of Fortune Global 500 as most profitable cooperation in 2011. Their promise is good food, good life to enhance lives, throughout life, with good food and beverages. Nestle offers an excellent loyalty program, where the customer can earn bonus points on a wide range of activities, from registering an account, rating articles and referring friends. Nestle is winning over the customer loyalty and lifetime value by offering the excellent branded product and services to the customer.

- Aim of the Research

This research is carried so to find out the purpose of product branding because there are many other factors which are affiliated with the product to sell but because of now product branding is the most important feature. This research focusses upon how the branding of product impacts in customer commitment and lifespan value, also the factors which brought such success to Nestle in context of branding

- Research Objectives.

The main objectives of this research study are following

- To find out the role of product branding in creating and maintaining customer loyalty

- To focus on the branding elements which brings customer loyalty at Nestle

- To evaluate the current success of branding strategies of Nestle in maintaining customer loyalty.

- To make recommendations for better improved branding strategies that will enhance customer loyalty

- Research Questions

The research question will help to find out the main purpose of the research by keeping the focus on the particular thing

- What is product branding and customer loyalty?

- What is the role of product branding in bringing customer loyalty?

- Which branding strategy is used in Nestle to bring customer loyalty?

- How Nestle can bring customer loyalty by using its brand as a tool?

- Rationale for Research

For conduction of this research there are three rationales, personal rationale, business rationale and academic rationale. In academic rationale the most significant question is to become more knowledgeable of the concept of the demand for branding in the twenty-first century and to hold the knowledge of customer loyalty and lifetime value. The business rationale for this report is that it can help other businesses and organisations to grow and develop their strategy to increase customer loyalty in order to come on top. The personal rationale is that this research would help me in my career of business management and marketing as before marketing there's the need of branding and that has become much clear after conducting this research along with the grandness of customer loyalty and how it can be prevailed.

- Layout of this Research

This dissertation comprises of five chapters. Brief details of these chapters are mentioned below.

Chapter 01- Introduction: This chapter provides a background to the research, profile of the organization under consideration, research objectives, aim and questions and discusses the layout of the entire dissertation.

Chapter 02-Literature Review: This chapter provides pertinent literature to the product branding and customer loyalty from the empirical researches that were carried out in the past.

Chapter 03- Research Methodology: this chapter offers the method which is used for obtaining relevant results for the topic.

Chapter 04- Findings: This section provides the results obtained from the implementation of the research method.

Chapter 05-Discussion: This chapter discusses detailed results which have been provided in the findings chapter.

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