Instruction: Are you especially loyal to any one brand? If so, what is it and why are you so loyal? When successfully building loyalty and community, trust seems to be the biggest factor. How can a company build trust and what is the best approach to do so (incorporating concepts from both the field of marketing and psychology)? What are the ethical issues and obligations that come with trust once it is built? Should consumers trust companies? Why or why not? Do you think some consumers are just more prone to be loyal to companies and other consumers are not? Why or why not?
Note: Please review my expectations for the assignment. I expect your response to include 2 or more references from the APUS Library system (failure to include such references will detract from your grade on the assignment), and be presented in APA Format. Deliverable length is a minimum of 2 body pages.
Brand loyalty is a phenomenon where customers always prefer a particular product in the market. Loyalty in customers occurs as a result of consistently buying products of a particular brand regardless of the product’s convenience or price. Branding is the creation of an image of a product in the mind of a customer through advertising. One of the main reasons why firms engage in branding is to attract loyal customers. Brand loyalty is a source of sustainable competitive advantage, which can be leveraged by firms to enhance their chances of survival in the increasingly complex and competitive business environment. Owing to the unprecedented degree of uncertainty and ambiguity in the modern business environment, firms have been prompted to acquire more knowledge in building trust among the customers. It is a proven fact that building of trust among the customers is a way to create a dependable consumer base and increase the overall profitability of an firm (Paliszkiewicz & Klepacki, 2013).
Business code of ethics provides a clear guidance about actions that are acceptable and those that are not in the relationship between the firm and the customer (Erwin, 2011). It helps entities act in a way that treats others appropriately and equitably. Research suggests that organizations with high ethical principles report higher profit margins (Ferrell & Fraedrich, 2016). On the contrary, unethical behaviors damage a firm’s image and reputation causing poor customer turnover. By adding value, promoting openness, and providing consistent values and principles the consumer becomes more loyal to the company as they develop a sense of belonging and a shared concern for the firm’s achievements. Therefore, companies’ real bottom line is to make business ethics a top priority to form loyal relationships, brand advocates, and an active organization supported by strong leaders. Lack of ethical principles is the single prime threat to customer loyalty and the success of businesses (Ferrell & Fraedrich, 2016). Customer loyalty should be differentiated with customer loyalty. Loyalty is obtained from the transaction data that a firm already owns. Consumer loyalty is a testable number and can frequently be updated. On the other hand, consumer satisfaction majorly depends on responses to surveys and tests. The difference explains why some customers tend to be loyal to their brands.Clients report that when company outlines policies that align with their personal beliefs, they will trust the company while when these policies do not align with their beliefs, they tend to mistrust the business (Romaniuk & Nenycz-Thiel, 2013, p. 30).
Brand loyalty is an important tool in the business world in
the strategy of making more and more profits and also creating a secure market
for the products. Brand loyalty is currently the primary objectives in business.
A company that has more brand loyalties report more profits than a business
that has fewer loyalties from customers. Therefore, business entities follow business
ethical codes in consideration of customer trust and loyalty to the enterprise (Ferrell & Fraedrich, 2016). Branding has
transformed many industries and is one of the reasons to enormous profit
Erwin, P. M. (2011). Corporate codes of conduct: The effects of code content and quality on ethical performance. Journal of Business Ethics, 99(4), 535-548.
Ferrell, O. C., & Fraedrich, J. (2016). Business Ethics: Ethical Decision-making & cases. Nelson Education.
Paliszkiewicz, J., & Klepacki, B. (2013). Tools for building customer trust. In Active Citizenship by Knowledge Management & Innovation, Management, Knowledge and Learning International Conference, (pp. 19-21).
Romaniuk, J., & Nenycz-Thiel, M. (2013). Behavioral brand loyalty and consumer brand associations. Journal of Business Research, 66(1), 67-72.