Expansion Advertising as a Precursor to Brand Loyalty in India∗
S. Ramesh Kumar and Aalap Sharma
Marketers have used the concept of expansion advertising to increase the sales of a mature product in developed markets. The concept has not been studied in terms of applicability in the developing markets. The Indian FMCG market, in particular, offers a unique situation of a fragmented market share and high advertising clutter. The study attempted to draw a linkage between brand loyalty, expansion advertising and advertising appeals in the context of the Indian soap market. A comprehensive literature survey was used to enable a flow of concepts. Qualitative and quantitative techniques were used to elicit customer responses with regard to expansion advertising and its implications on brand loyalty and specific dimensions relevant to the Indian context. The study provides a conceptual direction, which is not common to advertising in an emerging market like India. The conceptual frame-work is likely to be helpful to practitioners of advertising who contribute to brand communication strategies. While the study is undertaken in the Indian context, it is felt that the approach would be useful for marketing practitioners in several emerging, markets, where expansion advertising can be used by brands to enlarge their consumer base.
Keywords: Expansion advertising, brand loyalty precursor, FMCG market, brand
Communication Strategies, Advertising Appeals
Expansion advertising is the kind of advertising that aims to increase the usage of a mature product. This may be done by communicating that a certain product is the best for a certain situation, or that it is better than an existing product, which is used in the same situation, or that its use is as good as it is in a different situation.
The Indian soap market is highly fragmented. The high amount of advertising activity in the market only adds to the clutter. In this kind of scenario, it is important to differentiate the kind of advertising appeals that would motivate a potential consumer towards purchase.
Brand loyalty in the Indian soap market is important for manufacturers, considering the high frequency of purchase and the number of brands in the market. Building brand loyalty in the market is a challenge to marketers, and expansion advertising is likely to be useful to brand building. The Indian market is not as mature as the Western market for fast moving consumer goods (FMCG). This is manifested in the lower levels of customer education and a gap in the marketers’ understanding of the customers. Thus, it is important to use qualitative research for an exploratory study so as to know the expectations and motivations of the customer that guide him/her during the purchase process. The target segment chosen for the study was the consuming class. This kind of consumer has come into the focus of marketers, and by the end of 2006 the consuming class is expected to constitute 46.2 percent of the total households in India. Brand communication in the recent times has become more complex and traditional advertising may be losing its effectiveness due to several reasons even in a developing market. Changing lifestyles have reduced the TV viewing time fragmentation of TV channels have resulted in consumers spending less time on specific channels. The emergence of computers have also resulted in consumers (though a very small number in a developing market like India) spending less time on TV viewing. Finally the competitive communication related to brand advertising, especially in a mundane category like soaps may have attracted less attention from consumers. There is a need to research contemporary dimensions, which may result in better effectiveness of advertising. Expansion advertising can be used in several kinds of contexts, with several kinds of products and target segments. It could offer insights, if they are investigated in conjunction with behavioural aspects of the consumer. The impact of expansion advertising on brand loyalty, with contemporary aspects, could provide valuable insights to enhance the effectiveness of advertising strategies.
The study aims to integrate the concepts of expansion advertising, brand loyalty, advertising appeals and qualitative marketing research in the context of the Indian soap market. An attempt has been made to relate the theoretical research on these concepts to the ground realities of the Indian FMCG market.
Review of Literature
Brand loyalty has been an important topic of discussion in the contemporary market scenario, where marketers are increasingly finding it difficult to retain customers. Researchers have opined that brand loyalty could be driven through functional value, symbolic value, or through price. (Kumar and Rakshit, 2003) The motivation to buy, coupled with one of the above three drivers could lead to reinforcement, which could result in loyalty in purchase. Price-led loyalty lacks commitment on the part of the consumer as they could switch as soon as a competitor offers a better price. Brand loyalty could be considered as the price differential needed to make consumers who prefer a specific brand switch to some competing brand (Raju et al., 1990). This has been called the dollar–metric measure of brand loyalty by researchers. Further, the degree of brand loyalty is defined to be the minimum difference between the prices of two competing brands necessary to induce the loyal consumers of one brand to shift to another competing brand. In terms of price promotions, the likelihood of using them increases with the number of competing brands in the product market.
Some researchers opine that brand loyalty is slowly dying in classes where the perceivable difference is in the price and where the consumers have learned through deals that other differences do not matter (Rothschild, 1987). Previously reinforced behaviours are extinguished, when there is a removal of the correlation between the response and the reward or when the competitor offers a new deal. Sometimes, brand loyalty can be created in the early socialization process itself, during childhood (Olsen, 1993). The intergenerational transfer often represents the “bridge” of an emotional bond with the personal relationship. Conversely, alternative behaviour or product rejection represents a “fence”, signifying rebellion against a social relationship. When the consumer buys a brand, he also renews the relationship he/she had with the product and the people who introduced him/her to it. Research has distinguished between consumers who constantly assess their buying decisions and those that have inertia in their buying process (Venkateshwaran, 2003). Companies have to continuously look at their value propositions, so as to make them relevant and meaningful to this group who base their decision on objective factors. The inertial group rarely assesses its purchase decisions. This could be out of a lack of involvement or high switching costs. Companies can protect migration by ensuring and mamtaining adequate levels of product performance, continuous contact with customers, quick response to service failures and by building in switching costs to lock in customers. There is also an opportunity to make this group, emotional loyalists.
Researchers have identified a phenomenon called “double jeopardy” in competitive markets by which smaller brands generally attract less loyalty among their buyers than larger brands do. Unless other factors prevail, double jeopardy will arise whenever competitive items differ in their popularity (Ehrenberg et al., 1990). One dimension of research has viewed brand loyalty as a multidimensional construct involving the emotive, the evaluative and the behavioural tendencies towards the brand (Sheth and Whan, 1974). Depending on the product class and upon the consumer, the dimensionality of brand loyalty may be as simple as any one of the above three dimensions, or as complex as all the three dimensions. Loyalty could be looked at from a downstream perspective or an upstream perspective (Amine, 1998). The downstream approach means the conceptualization of loyalty, through its consequences like repeat purchase. The upstream approach to brand loyalty is based on identifying the motives behind true brand loyalty. The upstream approach has analyzed the benefits of including brand commitment to understand the loyalty phenomenon better, and is underlined in this research. As loyalty programs are most attractive to existing buyers of the brand and heavy buyers of the category, they should lead to a greater effect on the average frequency of purchase, than on the penetration. The substitution of promotions for a loyalty scheme, particularly when competitors continue with promotions, may lead to a decline in the penetration statistic for loyalty program brands. An effective loyalty program that has greater impact on a brand’s average purchase frequency than it has on the brand’s penetration level may lead it to achieve “excess loyalty”. (Sharp and Sharp, 1997). Loyalty should be measured on the two criteria of attitudinal and behavioural loyalty (Day, 1969). The buyer could be thought of as having a brand loyalty score towards a particular brand based upon the brand’s share of total purchases and the attitude towards the brand.
Expansion advertising—promoting new uses for old brands, can increase sales by increasing usage frequency (Wansink and Gilmore, 1999). By understanding how consumers learn about new uses for mature brands, marketers can become more effective at developing new uses and compellingly promoting these new uses to the most promising segments. The key to effectively advertising a new use for an old brand lies in making this new use appear similar to existing uses of that brand but not in an overly manner. If the new use is perceived as similar to the old one, the existing use for the brand provides an “attitude halo” for the new use and eases its adoption. Substitution-in-use research indicates that most products can be used in a wide variety of situations. However, consumers quickly become “functionally fixated” and tend to use many products in familiar or routine ways (Wansink and Ray, 1996). Consumers generally do not attempt to associate particular products with non-routine usage situations, unless such an association is presented to them. There is tremendous potential of advertising to increase such usage frequency. For dominant brands, increasing usage frequency among current users may well be more cost-effective than encouraging nonusers either to switch brands or initiate trial. Expanding usage can also be a key strategy for small brands that have a loyal niche following and for enhancing the penetration of a specific category. Advertisers can leverage a brand’s equity, by stimulating the frequency with which its loyal consumers consume the brand (Wansink and Ray, 1993). One approach to stimulating such usage or consumption involves encouraging these loyal consumers to extend their use of a product by consuming it in new situations, in which it is not frequently considered. Advertising which encourages this new or different use of a brand is called extension advertising. Extension advertising is defined with respect to a particular segment of brand-loyal consumers who do not use the brand in a previously identified situation, or who do so infrequently and only as a secondary use of the brand.
Further research shows that advertising only the functional similarities (common attributes) between different products will be effective only if the products are very dissimilar. The more similar two products are perceived, the more their functional dissimilarities (distinct attributes) must be emphasized (Wansink, 1994). When the objective of an advertising campaign is to increase the usage frequency of packaged good, copy-testing measures must be sensitive to this objective. Since measuring actual usage can be prohibitive in terms of time and money, according to researchers, two more primary measures of cognitive responses and usage-intention measures could be used because of their validity and diagnostic value. Further, it has been found that volume estimates best approximate the actual usage of heavy users, or with frequently consumed brands; and that likelihood estimates are more accurate with light users, or with infrequently consumed brands. (Wansink and Ray, 2001). Researchers have found that the role of usage context in customer choice is one of constraining the problem solving process, and as a consequence, one of guiding the search for and evaluation of possible solutions. Thus, marketers can expand the usage context by guiding the customer. (Warlop and Ratneshwar, 1993). To explore the linkages connecting values important to the consumer to the specific attributes of products, some researchers have suggested means–end models (Gutman, 1982). The model is based on the distinctions of customer use in grouping of objects by the virtue of their similarity and distinguishing among them by virtue of how they vary along common dimensions.
Research suggests that positioning a brand on versatility by communicating its suitability to a variety of end uses is likely to enhance its typicality in the overall category. This approach, in turn, may facilitate recall and purchase considerations in certain settings (Ratneshwar and Shocker, 1991). Research supports the argument that explicit consideration of situational contexts may contribute to the understanding of consumer behaviour and that a weighted composite of situational measures may reflect general attitudes and behaviour, especially in cases where one purchase is used in several situations (Miller and Ginter, 1979). Five groups of situational characteristics that can affect consumer behaviour have been found by researchers: physical surroundings, social surroundings, temporal perspective or any dimension of situations that may be expressed in units, task definition which includes the intent or requirement to shop, select, gather information etc., and antecedent states that may include momentary moods or conditions (Belk, 1975). One aspect of research has suggested a person–situation model as a framework, which links personal traits and usage situation with benefits, preferences, utilities and behaviour to understand the target market better (Dickson, 1982).
While the literature survey brings out several important aspects of brand loyalty and expansion advertising, the soap market (there may also be several other similar markets in the fast moving consumer goods categories in the Indian emerging context) in India is characterized by a high degree of brand switching and heavy advertising with a combination of functional, symbolic and situational appeals. A qualitative analysis of advertising appeals of brands also shows that managing these appeals, over a period of time, has not been consistent across brands. Even leading brands (in terms of market shares) have had no consistent approach towards managing their advertising appeals.
Besides, the brand switching by even loyal consumers of brands could be attributed to high sales promotion offerings. While there is no study, which delves into the importance of behavioural or attitudinal loyalty to fast moving consumer goods categories in the Indian context, the proliferation of sales promotion strategies over a period of more than five years, indicates the attempts by marketers in the Indian context to induce loyalty through sales promotion schemes. Brand dilution may be one of the negative consequences of such strategies, apart from reduced profitability with regard to brands, due to failure of loyalty patterns. The soap category (though a category with high penetration in the context) offers ample scope for the two concepts (brand loyalty and expansion advertising), to be used in conjunction with each other as strategy to reinforce brand loyalty. Marketers can devise strategies for greater frequency of usage for a specific brand based on the insights from the study. Brand acceptance (through specific appeals) could be a precursor to apply “situation-based advertising” (one of the aspects of expansion advertising) leading to brand loyalty. The first critical aspect in this context is to examine if specific advertising appeals can be used to influence purchase decisions in the category. The second aspect is to examine if specific advertising appeals used in a consistent manner could create and sustain loyalty among consumers.
Based on the literature survey and the context of the Indian soap market, the study has attempted to explore the significance of expansion advertising in the Indian soap market, with implications to practitioners of marketing in the Indian context. In addition, the study explores the feasibility of using expansion advertising as a precursor to brand loyalty in the Indian soap market.
An extensive literature study was done encompassing research done on brand loyalty, expansion advertising and advertising appeals. From the literature survey, certain inferences were made as to the factors that led to brand loyalty. Through secondary research, the appropriate factors were mapped for the soap category. The soap category was chosen among the fast moving consumer goods categories due to its high penetration levels (probably the only fast moving consumer good to have a penetration of more than 90 percent in the Indian market), high expenditure on advertising and high degree of sales promotion activity in the category. If alternative ways of focused advertising strategies could be explored in the given context, it would result in enhanced advertising effectiveness, stronger brands and stronger brand loyalty.
Qualitative marketing research was used in the form of focus groups to identify the motivations of the target customer segment of the consuming class. As the middle income-level households of the consuming class were in focus for the study, only low and midrange priced soaps were considered. Television advertisements were considered in the course of the study because of the popularity of the medium with the target segment. From the focus group discussion, certain hypotheses were formulated, which were to be tested using a questionnaire.
The methodology was based on the following rationale:
- The objective of the research was to highlight the importance of expansion advertising to practising marketers in a chosen category.
- There was a need to establish factors, which are important to expansion advertising as perceived by the segment of consumers using soaps. Therefore judgment sampling was used to identify the target segment with a view to use them as focus groups. The rationale of choosing the focus group method was to encourage the target segment to understand the factors associated with expansion advertising and to explain the objective of the study. This method was appropriate for the type of responds selected for the study as it encouraged the respondents to provide information, which will be useful for generating hypotheses. Choosing such a target segment and generating various kinds of hypotheses, in the opinion of the researchers, were likely to appeal to practitioners in the Indian context.
- The factors elicited from focus groups were used in a sample, which was selected by the judgment of researchers, based on the description of the target segment using soaps.
- Soap, as a product category has a penetration of around 94 per cent in the Indian context. The authors felt that a study done with a target segment using soaps, which responded to factors associated with expansion advertising will evoke the interest of practitioners who will be motivated to explore the concept further. Hence, the authors chose judgment sample. A random sample without the focus group based on judgment may have either missed out on the consumers of soaps who are interested in the study, or may have missed out on factors, which are associated with expansion advertising.
- The results of a study using judgment sample cannot be extended to the universe. But researchers may, use judgment (non probability sampling) under various circumstances (Kotler, 2003). In this context of emerging markets, the authors felt that it is appropriate to use judgment sampling.
Reasons for Choosing Qualitative Marketing Research
Qualitative research was chosen to enhance credibility and to accurately represent the multiple realities of the people under investigation, and this is equivalent to internal validity in positional research. (Hirschman, 1986). qualitative research is also useful because of triangulation, which involves collecting information from a diverse range of individuals and settings using a variety of methods. These are vital for emerging markets like India (Denzin, 1970). Researchers opine that the optimal focus group size should be less than eight (Fern, 1983). In a subsequent research, it was opined that the presence of other people leads to increased self-awareness that increases thought about one’s own attitudes, leading to attitude polarization (Fern and Bristol, 1993). However, this polarization would not exist past the group discussion stage. This polarization is heightened when the individual desires to be favorably evaluated, the setting provides a standard of comparison or when it allows for evaluation of others. Persuasive arguments may also modify the respondent’s view. Researchers have identified three different approaches that could be taken to qualitative research: exploratory or the generation of scientific constructs and their validation against everyday experience, clinical or the use of second degree scientific constructs without numerical measurement, and phenomenological or understanding the everyday experience of the consumer (Calder, 1977). Further, it is opined that heterogeneous groups are better for exploratory or clinical approaches and that phenomenological approaches require homogeneity. Research has identified the qualifications and attributes that a moderator must possess, in order to perform his job competently (Henderson, 1992). The research stresses on the importance that must be given to trained moderators as the results of the focus group hold a lot of significance to the organization.
Focus groups, apart from having lower cost also can lead to more reliable results than interviews, as a result of the interaction between the groups (Hall and Rist, 1999). However, it is also opined that they have the relative disadvantage of being hinged too much on the abilities of the moderator. It could be erroneous due to sampling errors and their results can’s be used without empirical verification.
Focus group research can also identify areas in the customers’ lives related to a product category where the customer experiences ambivalence or conflict. These expressions provide opportunities for producing a market – of creating innovations that most companies today overlook. (Letelier et al., 2000).
Focus Group Discussion
The respondents of the focus group (six in number) had salaries that ranged from Rs 5,000 1 to Rs 15,000 per month which was within the consuming class category in the Indian context. Most of them owned their own television. The group was well-exposed to various kinds of advertisements and indulged in watching TV from 1–3 hours everyday. The group consisted of members homogenous with the target customer group for the study. There was a high awareness among the group, of the different kinds of soaps and their advertisements. The group discussed the various kinds of advertising appeals that influenced them while buying soaps. Functional appeals like freshness, good smell and moisturizing effect came out strongly in the discussion. The group generally seemed to choose their soap based on these properties. The same were also specified as the reasons for buying their favorite soaps. A certain section of the group also felt that they were affected in their purchase decisions by advertisements that showed the state they aspired to be or things they aspired to own. Certain advertisements for soaps, which promise popularity or a “star-like hue” after using the soap, were discussed by the group. A longing for a soap, which had an international appeal was also noted. Yet others seemed to associate themselves with advertisements that showed active people and this affected their purchase. The group also discussed situations, which could make them shift over to other soaps. The situations that the group agreed to were removal of pimples, protection from UV rays and fairness-inducing soaps. The process of focus group was conducted by one of the researchers. As the objective of the focus group was to elicit the factors associated with expansion advertising, the individual respondents were encouraged to express their views on the various factors associated with the concept of expansion advertising. The focus group lasted for about one hour and notes were made during the process. The information was then used to draw up the various hypotheses of the study.
Quantitative Research and Formulation of Hypotheses
After focus group study, the authors verified the information obtained by using a battery of questions translated into the local language. Judgment sampling was used to identify the respondents. Statisticians often use this method in exploratory studies like pretesting of questionnaires and focus groups. The respondents belonged to the same income group and they bought soaps within the same, specific price range (it was hoped that the judgment would focus on a group of consumers who would have the same kind of awareness required for the factors used in the questionnaire). The advantage of judgment sampling is the reduced cost and time involved in acquiring the sample.
“An expert” uses his/her judgment in selecting the units from the population for study based on the population’s parameters. This type of sampling technique might be the most appropriate if the population to be studied is difficult to locate, or if some members are thought to be better (more knowledgeable, more willing, etc.) than others to be interviewed. Based on the focus discussion, a set of hypothesis was framed to test using quantitative research. These hypotheses were then tested out among a sample of 55 respondents. The questionnaire offers many advantages in increased accuracy of reporting; in improved field efficiency; in mechanical processing; and in reduced costs in printing, mailing, and handling. The questionnaire was formulated using the hypotheses made after the focus groups. The questionnaire was made such that the questions corresponded to loyalty, functional appeals, symbolic appeals and situational context in expansion advertising.
The following hypotheses were tested by the questionnaire:
- H1: Significance of expansion advertising in the Indian soap market depends upon the functional benefits extolled.
- H2: Significance of expansion advertising in the Indian soap market depends upon the symbolic benefits extolled.
- H3: Significance of expansion advertising in the Indian soap market depends upon the situational context.
- H4: Strength of functional benefits is greater than the strength of symbolic benefits in determining the success of expansion advertising.
- H5: Loyalty, in the Indian soap market, is related to the functional benefits extolled in expansion advertising.
- H6: Loyalty, in the Indian soap market, is related to the symbolic benefits extolled in expansion advertising.
- H7: Loyalty, in the Indian soap market, is related to the situational context in expansion advertising.
Results and Discussion
The following hypotheses were tested by the study (Calculations are shown in the Appendix):
H1: Significance of expansion advertising in the Indian soap market depends upon the functional benefits extolled.
The functional benefits extolled in the questionnaire ranged from a good smell, reduction of body odor, and recommendation from doctors among others. A moderately high level of confidence was found for the hypothesis. Thus the hypothesis was not rejected and the success of expansion advertising in the Indian soap market may depend upon the functional benefits extolled. These benefits are important, as these could be used by marketers to expand the usage of their product.
H2: Significance of expansion advertising in the Indian soap market depends upon the symbolic benefits extolled
The symbolic appeals shown ranged from making one feel like a star, and popularity among the other sex, among others. A low level of confidence was found for the hypothesis. Thus, the hypothesis was rejected and the success of expansion advertising in the Indian soap market does not depend upon the symbolic benefits extolled. The study seems to suggest that these appeals may not be useful for expanding the usage of the product
H3: Significance of expansion advertising in the Indian soap market depends upon the situational context
Among the situations listed for this hypothesis was protection from UV rays, making one fairer and cleaning of skin pores. A high level of confidence was found for the hypothesis. Thus, the hypothesis was not rejected and the success of expansion advertising in the Indian soap market may depend upon the situational context This is important for marketers, as the study seems to suggest that usage of situational context in advertising appeals would be very useful in expanding the usage of the product.
H4: Strength of functional benefits in greater than the strength of symbolic benefits in determining the success of expansion advertising.
This hypothesis aimed to study which kind of appeal would be more beneficial in expanding the usage of the product. A very high level of confidence was found for the hypothesis and it was not rejected, and the strength of functional benefits may be greater than the strength of symbolic benefits in deteimining the success of expansion advertising.
H5: Loyalty, in the Indian soap market is related to the functional benefits extolled in expansion advertising
The relation of loyalty shown by the customer to the importance assigned to functional appeals was studied in this hypothesis. A moderately high level of confidence was found for this hypothesis. Thus, the hypothesis was not rejected, and loyalty in the Indian soap market may be related to the functional benefits extolled in expansion advertising.
H6: Loyalty, in the Indian soap market, is related to the symbolic benefits extolled in expansion advertising
The relation of loyalty shown by the customer to the importance assigned to symbolic appeals was studied in this hypothesis. A low level of confidence was found for this hypothesis. Thus, the hypothesis was rejected, and loyalty in the Indian soap market is not related to the symbolic benefits extolled in expansion advertising.
H7: Loyalty, in the Indian soap market is related to the situational context in expansion advertising
The relationship of loyalty shown by the customer to the importance assigned to the situational context was studied in this hypothesis. A high level of confidence was found for this hypothesis. Thus, the hypothesis was not rejected, and loyalty in the Indian soap market may be related to situational context in expansion advertising.
Implications for Managers
The study was aimed to explore expansion advertising as a precursor to brand loyalty in the soap market. The market is a highly fragmented one in India with top brands just contributing 3–4 percent of the total market volumes (Euromonitor report, 2003). This is true for all price tiers of the market. Expansion advertising has been traditionally used for mature products to increase their usage, after demand has reached a state of saturation (Wansink and Ray, 1993). However, the situation that confronts the manager of low to mid-range priced soaps in the Indian soap market is different. The burgeoning consuming class offers further potential for growth to brands in this price range. The consuming class, in turn, has a high penetration of televisions, that is, it forms the core audience for the brand ads in terms of volume. However, the high amount of advertising clutter in the soap market only confuses the viewer as to the brand’s core proposition. A clear brand proposition needs to be communicated to the potential customer for him to make an informed choice and not to merely buy according to habit. Expansion advertising stresses on increasing usage of a brand through the product comparison, situation comparison and non-comparison routes. For expansion advertising to succeed, the marketer must know what kind of appeals the customer corresponds to, what kind of appeals would make him/her switch preferences, and what kind of appeals would make him remain loyal to the brand.
The study has attempted to explore the advertising appeals that could be used for expansion advertising. Advertising appeals have been split up into three types: functional, symbolic and situational. Functional appeals have been found to bear a moderately strong relationship to the success of expansion advertising. Respondents have been found to attach a significant importance to functional appeals like a good smell, reduction of body odor, moisturizing properties etc., in making a purchase decision. It is expected that a brand extolling such a functional advertising appeal may be able to woo the customer.
A functional appeal may be used both in the product comparison as well as the non-comparison route. Through the non-comparison route of expansion advertising, the brand may be communicated as the best for a specific function. Through the product comparison route, the brand can be communicated as performing a function better than a brand that currently occupies that mind space. For example, “Reduced body odor 50 percent times longer than brand X”. Further, when the use of functional appeals was extended to brand loyalty, it was found that, they have a moderately strong association with the latter. Consumers are quite likely to be loyal to a brand if it advertises the kind of functional appeals that they want. Thus, to prevent the outflow of customers, it is important the brand continuously stresses on the consumers’ desired functional appeals in its communication. Symbolic appeals have been found to bear a weaker correlation to expansion advertising. Though these kinds of appeals may be useful in building brand image and associations, it may not be a major point of consideration for many people in guiding their purchase decisions. When these appeals were extended and tested for the existence of brand loyalty, they were found to have an even lower significance. Thus symbolic appeals are not expected to be useful in building brand loyalty through expansion advertising. The situational context has been found to have a strong correlation to brand loyalty. This is consistent with the thought that consumers need to be guided in the usage context by marketers (Warlop and Ratneshwar, 1993). The study has explored various situations like protection from UV rays, increasing fairness, usage after sports etc. and tested the response on their importance in the advertising, in terms of making a purchase decision. The situational context can be used in the comparison route of expansion advertising wherein an existing brand is expanded as being useful in another situation. In particular, this is important for managers as it accentuates the need for creating situations in which the respondent would find it useful to purchase the brand. When situational context was extended to the existence of loyalty, it was found to have a strong correlation. This proves that consumers are loyal if the communication of the brand accentuates its applicability in a desired situation. Overall, the study finds that brand loyalty can be built up through the expansion advertising route, by making use of functional appeals as well as the situational context in advertising.
The study can be extended to different categories of FMCG. Given the state of the Indian FMCG industry, it would be useful for brand managers to explore further uses of expansion advertising to retain, regain and gain market share. Further empirical research may also be done to probe whether any kind of expansion advertising has been efficiently used to improve a brand’s standing in the Indian scenario.
A Framework Involving Expansion Advertising and Loyalty
The framework given below (Figure 6.1) proposes marketing strategies, which could be useful when expansion advertising and brand loyalty are involved. The framework also includes marketing mix elements that could be used to support expansion advertising for fast moving consumer goods (though the study has covered only the category of soaps, we opine that the framework is likely to provide marketers with useful suggestions in any fast moving consumer goods category, in which expansion advertising could be used to further brand loyalty).
One dimension is the expansion advertising that is being attempted by a brand (which could relate to any aspect of expansion advertising) and the other dimension is the brand loyalty associated with the brand. “Low” and “High” in both the dimensions are to be determined by the brand, considering a variety of factors like the intensity of advertising by competitive brands with regard to expansion advertising, average brand loyalty in the specific category, and the frequency with which such advertising is being used in a given period of time for the brands in the category. Nurture strategy is appropriate when the brand follows a high expansion advertising strategy and the loyalty to the brand is also high. The brand will have to continue the expansion advertising and also concentrate on expanding the consumer base (it is reasonable to have an assumption that the high loyalty produced by the expansion advertising of the brand would continue to have a positive impact on prospective consumers) by investigating the need for probably more distribution outlets where the brand may not be available, or where the frequency of availability of the brand is not adequate. This may be probable in an emerging market like India where there is a huge unorganized sector (unbranded offerings with low price, and low and inconsistent quality). There may be a cross section of consumers who may want to upgrade to branded offerings (either use them frequently or occasionally), and the existing distribution may not be adequate to cover this segment of consumers.
Figure 6.1 Brand Loyalty and Expansion Advertisement
The brand could also use occasion-based expansion to appeal to these consumers who may want to upgrade. Dettol floor-cleaning liquid is currently attempting this strategy to appeal to consumers who would be interested in upgrading to a higher quality branded offering of floor cleaner from the current unbranded offering. Consumers who are using toothpowder may be interested in trying out a toothpaste brand, and this may require the brand to plan a different communication campaign altogether.
Question strategy points out to the fact that despite any form of expansion advertising the brand is not gaining loyalty, and hence there may be other brand strategies, which may be useful in the situation. The strategy may also point out the need for a different approach towards marketing communication associated with the brand. For example, in the category of soft drinks brand loyalty may not be very strong given the communication clutter with celebrities, and below-the-line promotional activities. A brand may have to build a personality rather than, use expansion advertising to sustain its loyalty. Further, there may be a need for product variants or updated benefits, which consumers expect from the brand. This may be applicable, especially for brands which may be “pioneers” in a category – those that have introduced benefits, which may have opened up a sub-category in the category. Close-Up, in the toothpaste category, and Liril, in the soap category, are examples of such brands in the Indian context. Close-Up pioneered the gel sub-category in toothpastes and Liril, the lime based sub-category in soaps. While the aforesaid explanation holds for high expansion advertising and low loyalty, high brand loyalty with low expansion advertising may reflect product-based strategies like variants and updated benefits that are associated with intrinsic aspects of the brand. For example, a consumer may be loyal to a brand of soap because of the actual experience of using the brand, rather than because of the benefits being magnified through advertising. In such cases experiential advertising, rather than specific expansion advertising will be more relevant.
Attempt strategy could be tried out for brands, which are low on expansion advertising and low on brand loyalty too. These strategies can try out expansion advertising and observe if such an approach increases the brand loyalty. If such a strategy does not provide any improvement over brand loyalty, the brand may have to re-examine its marketing mix elements, as appropriate to its market segment.
Appendix: Calculation of the Hypothesis Testing
- H0 = Success of expansion advertising in the Indian soap market depends upon the functional benefits extolled
z = (x − p0)/0 = (3 − 3.1796)/0.71778 = − 0.2502 Using a one-tailed test, confidence level = 59.87%
Thus, the null hypothesis is not rejected for a moderately high confidence level
- H0 = Success of expansion advertising in the Indian soap market depends upon the symbolic benefits extolled
z = (x − u0)/a = (3 − 2.5522)/0.69730 = 0.6422 Using a one tailed test, confidence level = 26.11%
Thus, the null hypothesis is rejected.
- H0 = Success of expansion advertising in the Indian soap market depends upon the situational context
z = (x − u0)/a = (3 − 3.8148)/1.16674 = −0.6984
Using a one tailed test, confidence level = 75.80%
Thus, the null hypothesis is not rejected for a high confidence level.
- H0 = Strength of functional benefits is greater than the strength of symbolic benefits in determining the success of expansion advertising
z = [(x1 − x2) − (u1 − p2)]/0,.2 = (3.1796 − 2.5522)/0.1349 = 4.65
Using a two tailed test, confidence level = 99.99%
Thus, the null hypothesis is not rejected for a very high confidence level.
- H0 = Loyalty in the Indian soap market is related to the functional benefits extolled in expansion advertising
z = (x − p0)/0 = (3 − 3.1751)/0.70807 = −0.533 Using a one tailed test, confidence level = 59.80%
Thus, the null hypothesis is not rejected for a moderately high confidence level.
- H0 = Loyalty in the Indian soap market is related to the symbolic benefits extolled in expansion advertising
z = (x − u0)/a = (3 − 2.5077)/0.69096 − 0.7125 Using a one tailed test, confidence level = 21.25% Thus the null hypothesis is rejected.
- H0 = Loyalty in the Indian soap market is related to the situational context in expansion advertising
z = (x − u0)/o = (3 − 3.7907)/1.22587 = −0.645 Using a one-tailed test, confidence level = 74%
Thus the null hypothesis is not rejected for a high confidence level.
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