There has been little research on how market disruptions affect customer–brand relationships and how brand loyalty may be sustained when disruptions occur. Drawing from social identity theory and the brand loyalty literature, the authors propose a conceptual framework to examine these questions in a specific market disruption, namely, the introduction of a radically new brand. The framework focuses on the time-varying effects of customers’ identification with and perceived value of the incumbent relative to the new brand on switching behavior. They refer to these variables as “relative customer–brand identification” and “relative perceived value,” defined as the extent to which a customer believes that a focal brand’s identity has higher self relevance and that its utilitarian value exceeds that of another alternative in the same product category, respectively. The authors divert from the conventional economic perspective of treating brand switching as functional utility maximization and propose that brand switching can also manifest customers’ social mobility between brand identities.
The results from longitudinal data of 679 customers during the launch of the iPhone in Spain show that both relative customer–brand identification and relative perceived value of the incumbent inhibit switching behavior, but their effects vary over time. Relative customer–brand identification with the incumbent apparently exerts a stronger longitudinal restraint on switching behavior than relative perceived value of the incumbent.
This study provides important strategic guidelines for both brand and customer relationship managers on how to devise customer relationship strategies and allocate brand investments to achieve a sustainable competitive advantage. In terms of a corrective strategy, this study suggests that the often-used practice of persuading customers who have switched to a competitor by offering them financial incentives can be futile. This is because customers may switch to a competitor for identity enhancement reasons rather than for functional utility maximization. In terms of a preventive strategy, the findings suggest that building a strong brand identity can immunize brands from market disruptions. In this regard, managers should not be dissuaded by a misperception that brand identification is only a luxury for high-involvement or publicly consumed brands. In terms of an offensive strategy, that the effect of relative perceived value might become weaker than that of relative customer–brand identification does not mean that managers should ignore the former altogether. On the contrary, value investment may represent an area on which to focus to intensify its short-term effects to poach incumbent brands.
Son K. Lam (PhD, University of Houston) is Assistant Professor of Marketing in the Terry College of Business at the University of Georgia. His current research focuses on salesperson behavior and performance. Son also conducts research on corporate identity and organizational identification in the context of internal marketing and customer–brand relationship. Son’s work on sales management, internal marketing, and the service profit chain has appeared in Journal of Marketing Research, Journal of Marketing, and Journal of Retailing.
Michael Ahearne (PhD, Indiana University) is C.T. Bauer Chair in Marketing and Executive Director of the Sales Excellence Institute in the C.T. Bauer College of Business at the University of Houston. Mike’s research examines factors influencing the performance of salespeople, sales teams, and sales organizations. Mike is a coauthor on one of the leading professional selling textbooks, Selling Today: Creating Customer Value. The book has been translated into numerous languages and is currently used to teach professional selling in more than 30 countries. He has published in Journal of Marketing, Journal of Marketing Research, Management Science, Journal of Applied Psychology, as well as several other journals.
Ye Hu is Assistant Professor of Marketing in the C.T. Bauer College of Business at the University of Houston. He holds a PhD in Marketing from the Wharton School at the University of Pennsylvania, as well as a BE in Economics and a BSc in Automotive Engineering from Tsinghua University. His recent research focuses on mechanism design in data collection methods for new product development. His research has appeared in Journal of Marketing Research, Marketing Letters, Journal of Advertising Research, and Journal of Retailing.
Niels Schillewaert (PhD, Ghent University) is Professor of Marketing in the Vlerick Leuven Gent Management School and founder and managing partner of InSites Consulting (www.insites.eu). At InSites Consulting, he is director of the ForwaR&D Lab department. Niels was an ISBM Research Fellow at PennState University and published in journals such as The International Journal of Research in Marketing, Journal of Services Research, Journal of the Academy of Marketing Science, Applied Psychological Measurement, Psychological Methods. His current research interests are in research methods, innovation adoption, pharmaceutical marketing, social media, and branding.
Journal of Marketing, Volume 74, Number 6, November 2010
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