An Exploratory Study of Brand Loyalty Development

George P. Moschis, Georgia State University
Roy L. Moore, Georgia State University
Thomas J. Stanley, Georgia State University
ABSTRACT - While considerable evidence suggests that brand loyalty patterns are acquired during the pre-adult years, little is known about factors that influence brand loyalty development. This article develops and empirically tests a model of brand loyalty formation, using the cognitive developmental and social learning theories of socialization. The results, in line with the hypotheses, found that age, SES, TV viewing, newspaper use and peer communication are all positively linked to the formation and persistence of brand preferences.
[ to cite ]:
George P. Moschis, Roy L. Moore, and Thomas J. Stanley (1984) ,"An Exploratory Study of Brand Loyalty Development", in NA - Advances in Consumer Research Volume 11, eds. Thomas C. Kinnear, Provo, UT : Association for Consumer Research, Pages: 412-417.

Advances in Consumer Research Volume 11, 1984      Pages 412-417

AN EXPLORATORY STUDY OF BRAND LOYALTY DEVELOPMENT

George P. Moschis, Georgia State University

Roy L. Moore, Georgia State University

Thomas J. Stanley, Georgia State University

[The authors would like to acknowledge the financial support provided by the Research Council of the College of Business Administration and the Urban Life Center of Georgia State University.]

ABSTRACT -

While considerable evidence suggests that brand loyalty patterns are acquired during the pre-adult years, little is known about factors that influence brand loyalty development. This article develops and empirically tests a model of brand loyalty formation, using the cognitive developmental and social learning theories of socialization. The results, in line with the hypotheses, found that age, SES, TV viewing, newspaper use and peer communication are all positively linked to the formation and persistence of brand preferences.

INTRODUCTION

Although previous studies of brand preference and loyalty have focused upon adult consumers, it appears that the study of the development of preferences and loyalties for brands during the pre-adult years may be of at least equal interest, since such orientations are likely to be maintained and translated into purchases later in life (e.g. Olshavsky and Granbois 1979, Madison Avenue 1980, Guest 1964, Orth 1963). This observation appears to be consistent with the more general belief that the attitudes and behavior patterns established during late adolescence can be carried over into adulthood and become a way of life (Hurlock 1968). It also supports the socialization approach to the study of consumer behavior during the preadult years (Ward 19745.

Previous research on brand loyalty development focusing on individual characteristics (Guest 1942, 1944, 1955, 1964) has ignored the influences of socialization agents whereas the few studies examining the influence of socialization agents (Fauman 1966, Arndt 1971), produced questionable findings regarding the absolute and relative influence of these factors. The selection of variables in these studies appeared to have occurred on an ad hoc basis in the context of little theory or research. Because of these gaps in previous research on brand loyalty development, a study was undertaken to accomplish the following objectives: (1) To examine both types of variables, selected intrapersonal characteristics and socialization agents. (2) To assess the absolute and relative influence of selected socialization agents on brand loyalty development. (3) To examine the impact of selected factors using a more rigorous methodology by developing a causal model based on theory and research, and testing the model using structural equations.

In line with a conceptual framework of consumer socialization (Moschis and Churchill 1978), selected intrapersonal characteristics (a person's age indexing his cognitive development or maturation and social class) can be classified as antecedent variables, and the person's interaction with ,elected socialization agents (television, newspaper and peers) can be viewed as socialization Processes.

Because the study of consumer behavior among youths is characterized by development and changes in attitudes and behaviors, the study of brand loyalty appears to require investigation of not only how preferences for brand remain consistent, but also how such preferences develop in the first place. Thus, the focus of this study is on some factors that may influence the formation and persistence of preferences for brands, with the relevant outcomes of socialization (dependent variables) being brand preferences and brand loyalty. These orientations are investigated during adolescence, a period important for the formation of brand preferences as indicated by earlier studies (Orth 1963, Guest 1944 and 1955: Madison Avenue 1980, Moschis and Moore 1979).

A CAUSAL MODEL

Because the development of a causal model requires both empirical and theoretical justification of the proposed linkages, antecedent variables and socialization processes used were limited to those that could be incorporated into specific hypotheses, within the general conceptual framework of consumer socialization.

Influences of Antecedent Variables

Social Class. The effects of social class can be viewed from a "life-space" perspective (Lewin 1951). With increasing socioeconomic status comes an expanded life space for the individual, such that increased availability of products and brands which fall into one's environment and are more likely to be consumed and preferred. Speculations by Riesman and his associates (1956) as well as Ward (1974) appear to be in line with the life space notion; they suggest that youths from more affluent families are likely to have more experience with money, and may be more aware of the range of consumer goods available than youths from less affluent families. Similar observations are made by Hess (1970).

The life-span notion has been used by communication researchers to explain the finding regarding positive relationship between print media use and public affairs knowledge with increasing education and SES, (e.g. Wade and Schramm 1960, Tichenor et al. 1970), and recently by Ward and his associates (1977) to explain the individual's propensity to consult mass media sources. Some research findings seem to support the notion that socioeconomic status is positively linked to brand preferences and brand loyalty (e.g. Guest 1964, Madison Avenue 1980). Thus, a positive relationship between the adolescent's socioeconomic status and brand preferences and loyalty is expected.

Social class is also expected to indirectly affect brand preferences by impacting upon the adolescent's media use habits. Schramm and his colleagues (1961) proposed that class norms mediate a change in the youth's relationship to the mass media. Specifically, during adolescence, the children of white-collar families turn toward "reality-oriented" media such as newspapers (a finding also explained from a life-span perspective), while children or working class families remain committed to fantasy-oriented media such as television. The results of several studies appear to support this line of reasoning (e.g. Moschis and Churchill 1978; Avery 1979, Moore et al. 1977). Thus, socioeconomic status is expected to be positively related to the frequency of newspaper reading but negatively related to the frequency of television viewing.

Maturation. Cognitive development theory suggests that a person's cognitions undergo formation and change during adolescence. Specifically, Piaget's (1972) position on the attainment of formal operations level of cognitive development indicates that the time span from 15 to 20 reflects a period of diversification of aptitudes and degree of generality of cognitive structures acquired between 12 and 15. Piaget further argues that all normal subjects attain the stage of formal operations or structuring if not between 11-12 to 14-15 years, in any case between 15-20 years. "However, they reach this stage in different areas according to their aptitudes and their professional specializations" (p. 10). According to this newer view speed of development may vary from one environment to another, placing greater significance on the environmental influences. Flavell (1970), who has made important suggestions for extending Piaget's theory of cognition, suggests that the meaning "developmental" should not be seen as restricted to biological changes. Instead, he points to experience as a "...far more promising source of cognitive changes than are biological events" (p. 250). This notion suggests that the adolescent's increasing experience with the market place, which is associated with increasing variety of needs for products and services, is likely to result in formation and change in his cognitive structure, which may include aptitudes for brand attitudes. A number of previous studies seem to support this line of reasoning, showing formation of brand preferences during adolescent years (e.g. Guest 1944, Fauman 1966), suggesting a positive relationship between age and the dependent variables.

In addition, age is expected to affect.brand preferences indirectly by influencing the socialization processes. Previous theory and research suggest that as the adolescent matures, he/she strives for independence from his/ her parents, spending more time interacting with peers (Avery 1979; Coleman 1961; Churchill and Moschis 1979). The time spent outside the family context may in turn affect one's frequency of television viewing (Schramm et al. 1961). As adolescents' activities and interests expand beyond the confines of the home, they may develop interest in the world of ideas causing them to turn to reality-oriented media (Avery 1979). The results of several studies seem to support these lines of reasoning showing that with increasing age, adolescents interact more with peers, read more newspapers and watch less television (e.g. Moschis and Churchill 1978; Avery 1979).

Influence of Mass Media and Peers

Mass Media. Two theories of mass media influence on individuals prevail. According to the "limited effects" model (Klapper 1960, Bauer 1964), mass media reinforce existing predispositions through selective exposure and mass media effects are largely neutralized by intrapersonal processes in a two-step flow communication process. While the reinforcement point of view has been attacked on several counts by socialization researchers (cf. Chaffee et al. 1970), the "two-step-flow" portion seems to be more directly related to the area of consumer socialization. Research findings suggest that the mass media may induce youngsters to discuss consumption matters among themselves or with their parents (e.g. Ward and Wackman 1971, Moore and Stephens 1975, Churchill and Moschis 1979). Such mediation is more likely to result in attitude formation and change rather than in reinforcement of existing attitudes (Ward and Wackman 1971, Chaffee et al. 1970).

The second model views mass communication effects as more powerful with mere exposure to the mass media being "persuasive" per se (Krugman 1965, Robertson 1976). Furthermore, "mere exposure" theory suggests that repeated exposure to a novel, simple stimulus will lead to greater liking of the object (Zajonc 1968, Krugman 1962, Stang 1974). As adolescents interact with the mass media, they are exposed to a variety of advertisements and may develop favorable orientations toward advertised brands. It is not surprising, therefore, that brand preferences have been shown to be linked to television viewing and newspaper reading (Resnik and Stern 1977; Gorn and Goldberg 1980; Teel et al. 1979). Thus, television viewing and newspaper reading are expected to be positively related to brand preferences and brand loyalty.

Television and newspapers may also indirectly affect brand preference formation by impacting upon the adolescent's frequency of communication about consumption with peers. Mass media usually sets the agenda for interpersonal discussion (e.g. Comstock 1978; McCombs and Shaw 1972). This notion is also consistent with the two-step-flow portion of the limited effects view of the mass media and is supported by some empirical findings (e.g. Murray and Kippax 1978, Churchill and Moschis 1979). Thus, it is hypothesized that frequency of television and newspaper reading will be positively related to the adolescent's frequency of communication about consumption with peers.

Peers. Peers are believed to be a significant source of influence of socialization among adolescents (Campbell 19695. An adolescent's need for independence from his parents leads him into establishing a dependence on his peers (Coleman 1961). The movement away from parents toward peers may lead to greater reliance on peers for consumer information and decisions including brand preferences as well on the adolescent's tendency to use peer brand preferences in evaluating products (e.g. Saunders et al. 1973, Ryan 1966, Vener 1957, Moschis and Moore 1979) appears to support this line of reasoning. Thus, as adolescents interact with their peers about consumption matters, they are likely to become aware of peer brand preferences and they may be influenced by them. Therefore, peer communication about consumption is expected to be positively related to the development of brand preferences and brand loyalty among adolescents.

The expected relationships between antecedent variables, socialization processes and brand loyalty are graphically shown in Figure 1. According to Figure 1, the following structural equations need to be solved to assess the sources of influences on brand preference and loyalty formation.

X1, X2 exogenous,

X3 = B31 X1 + B32 X2 + B3    (1)

X4 = B41 X1 + B42 X2 + U4    (2)

X5 = B52 X2 + B53 X3 + B54 X4 + U5    (3)

X6 = B61 X1 + B62 X2 + B63 X3 + B64 X4 + B65 X5 + U6    (4)

The path analytic diagram (Figure 1) and resulting equations suggest that variables X3, X4, X5 and X6 are all part of recursive relationships in that they are not involved in any loops, and the disturbances in them are uncoordinated with any of their source variables. The regression coefficients in the equations can consequently be estimated by ordinary least squares.

THE STUDY

Approximately 1,000 adolescents from several cities and towns in six counties in urban, suburban, semirural and rural Georgia completed self-administered anonymous questionnaires in junior and senior high schools during early December. Specific schools were selected after personal interviews with school officials to ascertain schools demographically representative of their respective regions. tn order to obtain preference statements for brands over time, respondents completed similar questionnaires in March of the following year. Matching of questionnaires was accomplished using birthdates and some demographic characteristics. Between ten and fifteen percent of the respondents attending the selected schools were absent at each time questionnaires were administered. Several other questionnaires were "unmatched" due to error or incomplete information, giving a total sample of 677 respondents. A comparison of this sample with respondents not having filled out both questionnaires on a large number of variables showed no significant differences. The sample was very representative with respect to sex (49% males, 51% females), age (53% middle schoolers and 47% high schoolers), race (11% blacks and 88% whites) and socioeconomic status measured on Duncan's (1961) scale (mean = 45.2)

Dependent Variables

A great variety of definitions of brand preferences and brand loyalty has been used (Engel et al. 1978). Measures of brand preferences tend to be either general, usually asking respondents to indicate their favorite brand (e.g. Guest 1955 and Moschis and Moore 1979) or specific, asking for preference between two or more brands (e.g. Ward et al. 1977, Guest 1944). Measures of brand loyalty, on the other hand, tend to be defined either as behavioral consistencies, or as brand preferences over time, or some combination of the two (Engel et al. 1978). While behavior appears to be a necessary condition for measures of brand loyalty among adults, it does not appear to be necessary in measuring the brand loyalty of children and adolescents. Although youths do buy many products on their own, some of the brand preferences they develop are expressed into purchase by product requests to parents, while for other products brand preferences, many of which are formed and maintained in pre-adult years, cannot be expressed into behavior until later when need for products and opportunities for consumption arises (Ward 1974). Thus, for studies of the youth's brand loyalty, statements of brand preferences over time appear to be both necessary and sufficient.

In line with this reasoning, brand loyalty is defined in the present study as stated preference for the same brand in two time periods, a definition initially used by Guest (1944) and later employed in at least 17 other studies of brand loyalty (Engel et al. 1978, p. 442). Brand preferences were measured in line with previous research (e.g. Guest 1944, 1955, 1964, Moschis and Moore 1979) by asking subjects to write one of their favorite brands next to twelve different products. They were also instructed to leave the space provided next to each product blank if they did not have a favorite brand. Several of the products used in this study were also used in previous studies of brand preference formation (e.g. Guest 1942, 1944, 1955, and 1964). Products were randomly selected with half of them considered relevant to the child's use and half as not relevant. In each of the two categories, half were products heavily advertised in the mass media and half lightly advertised, according to LNA reports (1977). Respondents were assigned scores of 1 if they indicated a brand name or O i' "none" for each product. A O-to-12 point index was formed to represent the respondent's level of brand preferences. The alpha reliability coefficient was .83. If respondents indicated the same brand name as preferred brand at both points in time, they were assigned scores of 1 and scores were summed to form a 0-to-12 point index of brand loyalty. The alpha reliability coefficient was .67. Table 1 shows descriptive statistics for the brand preference and brand loyalty measures and their subcomponents.

Independent Variables

Amount-of television viewing, in line with previous research, was measured by asking respondents how frequently they watched specific program categories (Moschis and Moore 1978; Churchill and Moschis 1979; Moschis and Churchill 1978), including national and local news, sports, movies, variety shows, cartoons, police and adventure shows. Responses were measured on a five-point, everyday (=5) to never (=1) scale and summed to form a television viewing index. The alpha reliability coefficient was .69.

Newspaper reading, in line with previous research (e.g. Moschis and Churchill 1978), referred to frequency of reading for comics, sports, and news about the government and politics, news about the economy and advertisements. Responses were measured on a five-point, everyday (=5) to never (=1) scale and summed to form a newspaper reading index. The alpha reliability coefficient was .70.

Peer communication about consumption was operationally defined as overt peer-adolescent interaction concerning goods and services (Moschis and Moore 1978; Moschis and Churchill 1978). It was measured by summing responses to eight items such as "My friends and I talk about buying things," on a five-point, very often (=5) to never (=1) scale. The reliability coefficient alpha was .77.

The results of the recursive relationships are shown in Table 2 in the form of standardized and unstandardized regression coefficients estimated by ordinary least squares (OLS).

Because multicollinearity among the explanatory variables may exist, which, if severe, could bias the results, the issue of multicollinearity was examined. The sum of the reciprocals of the five eigen-values is 5.44, a value which is nearly what it could be for an orthogonal system (Hoerl and Kennard 1970) suggesting no multicollinearity.

RESULTS

First, with respect to the effects of antecedent variables, socioeconomic status (X1) is negatively linked to television viewing (X3), as posited. However, SES is not significantly related to newspaper reading (X4), although the coefficient is in the expected direction. Socioeconomic status does also seem to affect the formation and maintenance of brand preferences (X6), with adolescents from upper SES backgrounds being more likely to have such orientations than adolescents from lower social classes. Television viewing (X3) declines with age (X2) while communication with peers (X5) and newspaper (X4) increases. These findings are in line with the hypothesized relationships and they are also consistent with research findings of previous studies (e.g. Churchill and Moschis 1979). Age (X2) also has a significant effect on the development of brand preferences and loyalty (X6). Thus, as adolescents grow older, they are more likely to develop preferences for brands and maintain such preferences.

With respect to the effects of socialization processes, it was found that television viewing (X ) is associated with both the frequency of interacting with peers about consumption matters (X5) as well as with brand preference formation and maintenance (X6). The relationship between newspaper reading (X4) with peer communication (X5), on the other hand, approaches significance (p<.07) suggesting that the agenda setting function of this medium may not be as important as that of television with respect to consumption matters. Newspaper (X4) was a very strong predictor of brand preferences and consistency of these preferences (X6). Finally, peer communication about consumption (Xs) did predict both the level and consistency of brand preferences (X;), as posited.

DISCUSSION

The study findings seem to provide adequate support for the proposed effects of the factors in the socialization model of brand preference formation developed in this article. The results suggest that adolescence may be a period during which brand preferences are formed and maintained. Maturation during this period seems to contribute to brand preference formation suggesting that cognitive development theory may explain the formation of such orientations. However, it also appears that age affects brand preferences indirectly by impacting upon peer interaction as well as upon newspaper reading and TV viewing. As adolescents grow older, they tend to interact more frequently with peers and newspapers, both serving as significant sources of brand loyalty development. The data also appear to support the life-space notion regarding the effects of social class on consumption. Socioeconomic status may affect brand preference and brand loyalty formation directly as well as indirectly by impacting upon television viewing. Contrary to our expectations, social class did not predict newspaper reading, a finding inconsistent with the results of a previous study (using identical measures of SES and newspaper reading) which shows a significant relationship between the two variables (Moschis and Churchill 1978).

The effects of antecedent variables (age and social class) appear to be both direct as well as indirect. The size of the standardized regression coefficients for age and SES are very close to the size of total correlation coefficients, suggesting that the direct effects of these factors may be stronger than their indirect effects. (For discussion on assessing direct and indirect relationships see Duncan 1975). However, it should be noted that the measures of socialization processes in this study are crude and may not necessarily capture all learning mechanisms or processes, such as modeling and reinforcement.

While the product-moment correlation coefficient between newspaper reading and peer communication in the present study (r=.12, pc.01) as well as in another study (Moschis and Churchill 1978) was statistically significant, the path coefficient between the two variables was not. This suggests that the relationship between the two socialization processes may be confounded with the effects of antecedent variables (age and SES) and that exposure to newspaper advertising may not necessarily set the agenda for communication about consultation with peers.

With respect to the relative influence of socialization agents on the formation and persistence of brand preference and brand loyalty, newspaper had the strongest impact followed by peer communication and television viewing. However, it should be noted that compared to newspaper, television advertising may have "second order" effects by setting the agenda for communication about consumption with peers.

The findings should be viewed in light of several limitations. First, the model presented here is by no means a complete model of brand preference acquisition. While the findings appear to support the proposed effects of variables under investigation the low R2 values suggest the need for a more complete model. Second, the study examined relatively few antecedent variables and socialization processes: key variables found to affect consumer socialization in previous research were not included in the model. The family in particular may play an important role in the development of preferences and loyalty for brands among youths, since it has been found to be an important agent of consumer socialization of children and adolescents (Ward 1974, Ward et al. 1977, Moschis and Churchill 1978). Older siblings may also be an important source of brand preference acquisition. Similarly, specific learning mechanisms were not examined in this research nor were additional antecedent variables such as race and sex. Such variables could contribute to a more complete model.

Another limitation lies in some of the measures used. While measures of brand preferences and brand loyalty used in the present study have also been used in previous studies, the measures may be tapping recall rather than preference. An attempt was made in this research to reduce this problem by giving subjects the option of recording no preference and some validity checks were performed. Furthermore, while brand loyalty has been defined and measured as statements of brand preference over time, there seems to be little justification for using any particular time interval, such as the three months used here.

TABLE 1

RELATIONSHIPS BETWEEN ANTECEDENTS, SOCIALIZATION PROCESSES AND DEPENDENT VARIABLES

FIGURE 1

A SOCIALIZATION MODEL OF BRAND LOYALTY FORMATION

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