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Contribuyamos con el medio ambiente

Segn el Panel Intergubernamental para el Cambio Climtico (IPCC), seis millones dehectreas de bosques primarios son deforestados cada ao. Esto equivale a la superficie de un

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Cada accin cuenta en el cuidado de nuestro medio ambiente. Es el nico que tenemos y poreso agradecemos su colaboracin. Ahora piense en cuntos estadios de ftbol fueron

deforestados en el tiempo que le tom leer esta declaracin.

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Este material de lectura se reproduce para uso exclusivo de los alumnos de la Escuela deAdministracin de Negocios para Graduados ESAN y en concordancia con lo dispuesto por lalegislacin sobre derechos de autor:

LEY 13714

Art. 69: Pueden ser reproducidos y difundidos breves fragmentos de obras literarias, cientficasy artsticas, y aun la obra entera, si su breve extensin y naturaleza lo justifican; siempre que lareproduccin se haga con fines culturales y no comerciales, y que ella no entrae competenciadesleal para el autor en cuanto al aprovisionamiento pecuniario de la obra, debiendo indicarse,en todo caso, el nombre del autor, el ttulo de la obra y fuente de donde se hubiere tomado.

Torres-Moraga, E., Vsquez-Parraga, A.Z. y Zamora-Gonzlez, J. (2008). Customer

satisfaction and loyalty : start with the product, culminate with the brand . Journal of

Consumer Marketing, 25 (5) pp. 302-313.

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Customer satisfaction and loyalty: start withthe product, culminate with the brand

Eduardo Torres-Moraga

Facultad de Economa y Negocios, University of Chile, Santiago de Chile, Chile

Arturo Z. Vasquez-Parraga

College of Business Administration, The University of Texas-Pan American, Edinburg, Texas, USA, and

Jorge Zamora-Gonzalez

Facultad de Ciencias Empresariales, University of Talca, Talca, Chile

AbstractPurpose Studies on customer satisfaction and loyalty have focused on brand rather than product. It is not that brand is not important, but theprocess of loving a brand starts with a product. Customers appreciate products by themselves, independent of the brand, as shown in their pursuit ofsatisfaction and development of loyalty. Such appreciation seems to be prominent regarding innovative products when compared to traditionalproducts. This paper aims to investigate this issue and provide a product-brand typology.Design/methodology/approach The paper takes the form of empirical research on a partial application of the typology.Findings Results show that the relationship satisfaction-loyalty is significantly present when evaluating products alone albeit a weaker presence

than when evaluating brand alone. Such unequal presence is corroborated in both traditional (bottled wine) and innovative (electronic) products eventhough it is much stronger in innovative products. The relationship satisfaction-loyalty is also present when evaluating product and brand combined,indicating that there is an intermediate position between product and brand. In contrast, the literature treats brand and product-brand as being in thesame category thereby diminishing the importance of a useful difference between brand and product-brand.Practical implications There are practical consequences of applying the typology and examining the findings. The relationship satisfaction-loyaltystarts with the product, includes the product-brand, and culminates with the brand. This process is significantly more important regarding innovativeproducts, such as electronics, as compared to traditional products such as wine.Originality/value This study introduces a typology underscoring the pursuit of satisfaction and development of loyalty in three conditions of productpresence versus brand presence, that is, product alone, brand alone, and product and brand combined.

Keywords Customer satisfaction, Customer loyalty, Brands, Electronic commerce, Wines

Paper type Research paper

An executive summary for managers and executive

readers can be found at the end of this article.

Introduction

This study aims at:. developing a comprehensive product-brand typology;. examining the relationship satisfaction-loyalty when

evaluating the product alone;. comparing the strength of the relationship in either

product alone or brand alone situations;. exploring the strength of the relationship in a product-

brand combined situation; and. comparing the strength of the relationship in either

traditional product or innovative product.

The first section reviews the literature on the key concepts of

this research: product, brand, customer satisfaction, and

customer loyalty, and introduces the product-brand typology.

The next section reports on the methodology used to partially

test the relationships emerging from the typology as

formulated in the propositions. The section on results gives

an account on the validity of the measures used and the

hypothesis tests performed. The remaining sections offer

conclusions, practical implications, and suggestions for future

research.

Literature review

Product and brand for customer relationships

This review focuses on product and brand as two stages in the

development of the benefits destined to satisfy customers

needs and preferences, and satisfaction and loyalty as two

stages in the customers response to the company offerings. It

is assumed that product is an initial stage in the product

offering whereas brand is a mature stage. Similarly,

satisfaction is an initial stage in the customer response to a

company offering whereas loyalty is a mature stage in such a

response.

When studying customer satisfaction and/or loyalty,

research has focused on satisfaction or loyalty towards the

brand, not the product. The existence of the product has been

subsumed into the brand, thus ignoring brand as a separate

reality. In addition, when studying the product, such as in

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/0736-3761.htm

Journal of Consumer Marketing

25/5 (2008) 302313

q Emerald Group Publishing Limited [ISSN 0736-3761]

[DOI 10.1108/07363760810890534]

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product development or product innovation, the customers

response (e.g., satisfaction or loyalty) to it has been ignored.

One of the consequences of such an approach is that

marketers do not use the product as a base to gain customer

satisfaction or to generate customer loyalty even if loyalty is

reduced to customer retention or purchase repetition

(spurious loyalty).

The product can be a good starting point for providingsatisfaction and generating loyalty, whereas the brand can be

the mature stage of such processes. The intention is not to

diminish the importance of the brand; instead, the intention is

to recognize the importance of the product, separate from the

brand. The advantages of getting an early start with providing

satisfaction and generating loyalty towards the product

include market pioneering, first mover advantages, low-cost

proactive innovation, and industry redefinition. The

disadvantages of ignoring the product as an initial stage to

develop company policies for satisfaction and loyalty include

loss of market opportunities, loss of market leadership, high-

cost reactive innovation, and high-cost brand development.

However, the recognition of the product as an initial stage

to develop satisfaction and loyalty policies may not be equal

across different products. Some products, lets say traditional

products, such as fresh food and drinks, may be in less need of

such policies, whereas innovative products, such as

automobiles and electronic equipment, may be highly

dependent on such policies.

A typology including the product and the brand in their

various levels of recognition, such as single product, product

mix, and no presence, is developed and presented below and

the relationships emerging from it tested.

Customer satisfaction as antecedent of loyalty

Satisfaction is often used as a predictor of future consumer

purchases (Newman and Werbel, 1973; Kasper, 1988).

Satisfied customers have a higher likelihood of repeating

purchases in time (Zeithaml et al., 1996), of recommendingthat others try the source of satisfaction (Reynolds and

Arnold, 2000; Reynolds and Beatty, 1999), and of becoming

less receptive to the competitors offerings (Fitzell, 1998).

More specifically, satisfaction is found to be a necessary

precursor of customer loyalty (Fitzell, 1998; Fornell, 1992;

Reynolds and Beatty, 1999; Sivadas and Baker-Prewitt, 2000;

Zeithaml et al., 1996). Whereas satisfaction and loyalty are

recognized as strongly related by most studies (Anderson and

Sullivan, 1993; Fornell, 1992; Rust and Zahorik, 1993; Taylor

and Baker, 1994), some consider the relationship to be

interchangeable (Hallowell, 1996; Oliver, 1999), and some to

be unidirectional, that is, progressing from satisfaction to

loyalty only (Strauss and Neuhaus, 1997). Satisfied customers

tend to be loyal customers with (Rowley, 2005) or without the

mediation of other variables (Coyne, 1989; Fornell, 1992;

Oliva et al., 1992).

Customer loyalty as an outcome of marketing

relationships

A quick observation of customer loyalty is repeated purchase

(Ball et al., 2004; Copeland, 1923; Newman and Werbel,

1973; Tellis and Chandy, 1998). In practical terms, firms

want repeated purchases mainly because such behavior in

consumers can:. apparently show the customer preference for a brand or

product (Bowen and Shoemaker, 1998);

. reflect a customers purchase intention (Mellens et al.,

1996); and. presumably secure profitability (Reichfeld and Sasser,

1990; Rust et al., 2004; Reinartz et al., 2005) by increasing

market share (Chaudhuri and Holbrook 2001).

Yet, the literature has categorized this type of loyalty as

spurious loyalty (Dick and Basu, 1994) or loyalty by inertia

(Solomon, 1992; Bloemer and Kasper, 1994) because it only

signals behavioral customer response. The consideration of

attitudes in addition to the behavioral representation makes

loyalty not just richer conceptually (loyalty is a process, not

just an act) but also more useful for practical purposes, such

as influencing customers both attitudinally and behaviorally

(Dick and Basu, 1994; Jacoby and Chestnut, 1978; Jacoby

and Kyner, 1973; Oliver, 1999; Olson and Jacoby, 1971).

Attitudinal loyalty reflects customers cognitive, affective, and

conative predispositions to continue relating to the brand or

company (Oliver, 1999) often involving customer

commitment (Bloemer and Kasper, 1994; Morgan and

Hunt, 1994; Solomon, 1992) or, better yet, involving trust

and commitment, in this order, after an initial experience of

customer satisfaction (Bravo et al. 2005; Vasquez-Parraga andAlonso, 2000; Zamora et al., 2004).

Consequently, true loyalty (behavioral and attitudinal)

would be more powerful to not only influence the bottom line

but also the mediating processes towards the bottom line such

as:. customers intention to favorably recommend the brand or

company to others (Getty and Thompson, 1994);. horizontal communication (customer to customer),

mouth-to-mouth communication in particular (Gremler

and Brown, 1999; Reynolds and Arnold, 2000; Srinivasan

et al., 2002);. customers resistance to competitors offerings (Gundlach

et al., 1995) and persuasive tactics to attract new

customers (Dick and Basu, 1994); and. buzz marketing (Grifiin, 1995).

Finally, loyalty is often considered to be a predictor of the

firms financial performance. The relationship, however, is

often established as part of a trio: customer satisfaction-

customer loyalty-firms performance (Reichfeld and Sasser,

1990; Zeithaml et al., 1990; Anderson et al., 1994; Storbacka

et al., 1994; Rust et al., 1995; Hallowell, 1996; Fornell, 1992)

Customer satisfaction-loyalty relationships bylevels of product-brand presence

Product and brand are not synonymous (Schiffman et al.,

1997). Yet, some authors have used them interchangeably,

particularly when they have addressed repeated purchases

(e.g., Dick and Basu, 1994; Oliver, 1997). As defined above,

product and brand are significantly dif ferent both

conceptually and practically. Similarly, customer satisfaction

and loyalty are significantly different even though they are

strongly and unidirectionally related.

The following typology reflects a customer evolution in

adopting a product or brand and in becoming loyal besides

achieving satisfaction. A customer usually starts judging a

product in order to find the benefits it brings and the

satisfaction it promises (Reynolds and Beatty, 1999). The

generic or unbranded product would be enough to start such

a selection process. Inexperienced consumers with a line of

Customer satisfaction and loyalty

Eduardo Torres-Moraga, Arturo Z. Vasquez-Parraga and Jorge Zamora-Gonzalez


Volume 25 Number 5 2008 302313

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products start with the product benefits and preferences

whereas experienced consumers go directly to the brands. As

the customer becomes more experienced with the product, he

or she may focus on a brand.

Similarly, products follow life cycles in combination with

their brands: new products are first recognized as products

and later, after the products have satisfied many customers

and reached a more developed stage, as brands. In adoptingcellular phones, for instance, recent customers adopt the

product that best fits their needs or best appeals to them

emotionally, symbolically, and/or cognitively (Park et al.,

1986). More experienced but not highly experienced

customers adopt a range of brands on the basis of both

value and price, whereas highly experienced customers

become loyal to a brand.

The typology is an effort to represent the evolution of

product to brand in customer choice and the sequential

achievement of customer satisfaction and customer loyalty.

Consequently, three levels of product presence (no presence,

presence of a product, and presence of a set of products) are

compared to three levels of brand presence (no presence,

presence of a brand, and presence of a set of brands). Each

cell generated in the comparison (nine cells in total eight

cells are useful because cell 1 is mute) serves to characterize

the type of customer satisfaction-loyalty relationship (see

Figure 1) as described in the following analyses.

Satisfaction-loyalty to the product alone (cell 2)

Customers that evaluate products for the first time focus on

the product benefits, not the brand. The emphasis is in the

tangible attributes of the product, which are visible and

accountable to the buyer (Keller, 1993). For instance,

consumers adopting a cellular phone for the first time may

look at its functions and properties and postpone any

particular interest in a brand. Similarly, low-price car buyers

may focus on the characteristics of the car regardless of brand.

Satisfaction-loyalty to a bundle of products (cell 3)

In addition to focusing on product benefits, some first-time

customers extend such evaluation to bundles of products. For

example, first-time customers who adopt hi-tech products or

innovative products such as electronics or fashion clothing

usually focus on the product functions or attributes,

respectively.

Satisfaction-loyalty to a brand alone (cell 4)

Some customers choose a brand regardless of the product.

For instance, customers who like the Sony brand in any

product Sony may offer, televisions, disc players, photo

cameras, etc. may demonstrate brand loyalty by making

subsequent purchases of Sony products without regard to

other brands. Some brands are linked to products in similar

lines, such as Sony or General Electric, whereas other brandsrelate to products in different product lines such as Nestle or

the new Apple. Still some customers identify themselves with

a brand or adopt a brand because it reflects their personality

(Aaker, 1997). Most studies have focused on brand alone

emphasizing its intangible attributes or associations in various

forms: a) company advertising, public relations, and word-of-

mouth communications (Biel, 1992; Krishnan, 1996) media

reports on consumption (Biel, 1992), consumers direct

experience with the product (Biel, 1992; Burnkrant and

Unnava, 1995; Haynes et al., 1999; Hoch and Deighton,

1989), brand-owning companys reputation (Nguyen and

LeBlanc, 2001), country of origin (Erickson et al., 1984;

Hong and Wyer, 1990), and product distributors (Pettijohn

et al., 1992). Some studies have also emphasized the

combination of tangible and intangible attributes in the

product portrayals (Keller, 1993) or market equilibrium

(Wernerfelt, 1991).

Satisfaction-loyalty to product-brand combinations

(cell 5)

Customers choose the same product line in a range of brands,

for instance, television sets in three brands only, Sony, Philips

and Samsung. Some customers choose clothes or cars within

a range of two or three brands only. Some studies on

customer loyalty seem to have taken into account this type of

combination (Dick and Basu, 1994; Oliver, 1999).

Conditional satisfaction-loyalty to a brand (cell 6) or

conditional satisfaction-loyalty to a product (cell 8)Customers attempt to link a product with a brand and set

their preferences in product-brand combinations. A customer

may choose the product or the brand first and then follow

with the brand or the product, respectively (Jacoby and

Kyner, 1973; Brucks, 1985; Dawar and Parker, 1994). For

instance, a customer may choose Sony TV, JVC disc players,

and Cannon photo cameras. Similarly, consumers may choose

Figure 1 Types of satisfaction-loyalty relationships by levels of product-brand presence





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Levis blue jeans, Arrow shirts, and Dockers socks. The

selection is conditional because when deciding on television

sets, the customer will only favor a Sony brand, or when

adopting disc players, the buyer will only embrace a JVC

brand, and so on.

Satisfaction-loyalty to a set of brands (cell 7)

Some customers, particularly when associating their decisionsto cultural, social or economic peculiarities, buy within a

short span of brands regardless of product. For instance, rich

customers are found to fit this profile in brand choice by

buying luxury or upscale brands only such as Porsche and

Lexus in cars, Gucci and Hartmann in bags and luggage,

Celine and Vuitton in clothes, and Burberry and La Vallee in

clothing stores. Similarly, customers that distinguish

themselves by generation, place of origin, or group beliefs

limit their brand choices to particular sets of brands, the ones

that distinguish them in terms of generation, place of origin or

group beliefs, respectively (Boush et al., 1987; Park et al.,

1991; Dacin and Smith, 1994; Herr et al., 1996; Klink and

Smith, 2001).

Satisfaction-loyalty to a basket of product-brand

combinations (cell 9)

Many customers choose sets of products within ranges of

brands, one set per range of brand. For example, in choosing

women cosmetics, some women prefer a set of brands (e.g.,

Lancome, Ahrens, and Helena Rubinstein) for face cosmetics,

and another set, for body cosmetics, and so on. The

expressions if I buy moisture lotion it has to be Olay or

Chanel or if I buy wet shaving products they have to be

Gillette or Colgate Palmolive are common in this cell of

consumer choices.

Cells 2 (product alone), 4 (brand alone) and 5 (product-

brand) will be subject to test using a survey research. From

the above considerations regarding these three cells, we can

formulate the following proposition and hypotheses:

P1. The relationship satisfaction-loyalty is present in both

consumer products and brand choices, including

product-brand combinations. Yet, this relationship is

stronger when customers adopt brands than when they

adopt products. It is stronger when they adopt

innovative products than w hen they choose

traditional products.

H1. The relationship satisfaction-loyalty is significant in

both consumer products and brand choices, including

product-brand combinations.

H2. The more the brand is used in adopting the product,

the greater the impact of satisfaction on loyalty.

H3. The impact of satisfaction on loyalty is greater in

adoptions of product-brand combinations than inproduct adoptions alone, but weaker than in brand

adoptions alone.

H4. In product adoptions alone, the impact of satisfaction

on loyalty is greater when adopting innovate products

than it is when adopting traditional products.

Methodology

Research design

A 3 2 research design was applied in order to secure three

groups of consumers (in terms of their choices of brand,

product, or product-brand) and two groups of consumers

adopting either innovative products or traditional products.

The strength of the relationship between satisfaction and

loyalty is measured for each type of adoption: product alone,

product-brand, and brand alone. Six off-the-shelf scales

measuring each construct, satisfaction or loyalty, were

adapted from the literature as a starting point. The

satisfaction measures were adapted from Sharma andPatterson (1999); Brockman (1998); Smith and Barclay

(1997); Nguyen and LeBlanc (1998); and Veloutsou et al.

(2004). The loyalty measures were adapted from Rowley and

Dawes (2000); Yoon and Kim (2000); Nguyen and LeBlanc

(1998); and Veloutsou et al. (2004).

Because some of the scales were originally developed in

different contexts of consumers, a pilot study with focus

groups and a group of industrial and retail executives

preceded the actual study. This resulted in four depurated

scaled items per construct. A pre-test of the questionnaire

followed with 105 respondents and resulted in the elimination

of an additional item per construct after evaluating factor

analysis results in light of conceptual contents presented

above. Thus, three scaled items of a Likert type of seven

points (1 completely disagree through 7 completely

agree) for each construct were applied in the final survey.

Samples

Two types of products were adopted, electronic products to

represent innovative products and wine, to represent

traditional products. A quota sample was comprised of

customers who buy electronic products or wine for a total of

1,223 respondents (830 buyers of electronic products and 393

buyers of wine). The first sample is more than two times the

second sample due to the greater variety of products and

brands in that segment and because the group of product-

brand adopters was absent in the sample of wine buyers.

The resulting sample of electronic-product buyers is

distributed as follows: 43 percent adopted product-brands,40 percent adopted products alone, and 17 percent adopted

brands alone. Among wine buyers, 55 percent adopted

products alone and 45 percent adopted brands alone.

Results

Reliability

Confirmatory factor analysis with Varimax rotation results

revealed that each construct, customer satisfaction and loyalty

among buyers of electronic products, is one-dimensional as

shown in Table I. All Cronbach alphas (Cronbach, 1951) are

above the 0.70 threshold established by Nunnally (1978), and

all item-total correlations are above the 0.30 limit (Nurosis,

1993). Table I shows similar results for wine buyers except for

the Cronbach Alpha above 0.60 in the loyalty factor, still

acceptable for exploratory factor analysis (Hair et al., 1998).

Hypothesis tests

Hypothesis tests were conducted using structural equation

modeling (EQS version 6.1). A maximum likelihood method

(Hu et al., 1992) is used in order to prevent potential

problems derived from the lack of univariate normality in the

data. Figures 2-6 show that the relationship between customer

satisfaction and loyalty is positive and significant (at 0.01

level) in the three situations of adoption: product alone, brand

alone and product-brand combination. These results support





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Table I Satisfaction and loyalty: factor analysis by type of product

Brand alone Product-brand Product alone

Indicator Loading Indicator Loading Indicator Loading

Loyalty: electronic products LTM1 0.80 LMP1 0.78 LTP1 0.59

LTM2 0.84 LMP2 0.84 LTP2 0.88

LTM3 0.83 LMP3 0.79 LTP3 0.88

CA* 0:

76 CA 0:

72 CA 0:

70EV* 67:63 percent EV 64:66 percent EV 63:29 percent

Satisfaction: electronic products STM1 0.88 SMP1 0.87 STP1 0.89

STM2 0.86 SMP2 0.86 STP2 0.92

STM3 0.92 SMP3 0.89 STP3 0.90

CA 0:86 CA 0:85 CA 0:89

EV 78:53 percent EV 77:03 percent EVA 81:99 percent

Loyalty: wine products LTM1 0.76 LTP1 0.85

LTM2 0.75 LTP2 0.85

LTM3 0.76 LTP3 0.56

CA* 0:63 CA 0:63

EV* 57:53 percent EV 58:39 percent

Satisfaction: wine products STM1 0.73 STP1 0.67

STM2 0.79 STP2 0.67

STM3 0.63 STP3 0.80

STM4 0.76 STP4 0.79

CA 0:70 CA 0:71

EV 53:17 percent EV 53:93 percent

Notes: CA Cronbach alpha; EV Explained variance

Figure 2 Satisfaction-loyalty relationship for brand alone (electronic products)

Figure 3 Satisfaction-loyalty relationship for product-brand combinations (electronic products)





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H1. Similarly, Table II shows acceptable adjustment measuresfor all relationships in both types of products, innovative and

traditional, providing additional support for H1.

In support of H2, the relationship satisfaction-loyalty is

stronger in brand adoptions as compared to product

adoptions as observed in Table III and in Figures 2-6. The

main reason brand adoptions produce more customer

satisfaction, which in turn produces more customer loyalty,

has to do with the addition of intangible characteristics to the

product tangible features. Intangible components include

psychological benefits of symbolic and emotional value (Park

et al., 1986) and a consumers preference for the personality

he or she sees reflected in the brand (Aaker, 1997). Productadoptions alone generate customer satisfaction, which in turn

generates customer loyalty on the basis of tangible product

features such as useful functions and attractive appearance.

Most often this is the initial stage of customer satisfaction and

an important one. Yet, it takes the brand to raise the level of

satisfaction with some intangible benefits.

In support of H3, Table III and Figures 2-6 show that the

impact of satisfaction on loyalty is greater in adoptions of

product-brand combinations than in product adoptions alone,

but weaker than in brand adoptions alone. This is an

intermediate stage of development in the relationship between

Figure 4 Satisfaction-loyalty relationship for product alone (electronic products)

Figure 5 Satisfaction-loyalty relationship for brand alone (wine products)

Figure 6 Satisfaction-loyalty relationship for product alone (wine products)





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sellers and buyers, providers and customers. A product-brand

combination brings the advantages of both the tangible

features of the product and the intangible benefits of the

brand in a period of development in which neither theproduct nor the brand is able to dominate. On the consumer

side, this stage is represented by a medium-level of

satisfaction-loyalty as compared to the one generated for the

brand alone, assuming the dominance of the brand was able

to generate greater levels of satisfaction by maximizing the

virtues of both tangible and intangible, especially the later

ones, benefits of the product.

Finally, in support of H4, Table III and Figures 2-6 show

that the impact of satisfaction on loyalty is greater when

adopting innovative (electronic) products than when adopting

traditional (wine) products. Following a recommendation by

Ailawadi et al. (2001) and using the Fishers Z-test and a

procedure introduced by Cohen and Cohen (1983) to test the

significance of the difference, the results in Table III show that

the relationship is significantly stronger among adopters of

innovative (electronic) products than it is among adopters of

traditional (wine) products. This may happen because

innovative products require more customer participation in

the process of delivering the product to the customer. By the

nature of innovative products, customers become more active

in their search for the product at the same time they become

more scrutinizing and more demanding of satisfaction. Thus,

innovative-product manufacturers and providers work harder

at satisfying the customer, whereas traditional-product

manufacturers and providers may just rely on a customary

base of customers to keep going.

Conclusions

Customer satisfaction and loyalty can be achieved by either

emphasizing the product or the brand depending on the level

of development of the product or product line in the markets.

At the introduction stage of the product, emphasis is on the

product and the tangible aspects of it. Satisfaction can be

achieved at this stage if there is a fit between the customer

need and the product offering. The intensity of satisfaction

attained at this stage, however, is not high mainly because of

the absence or scarcity of the psychological benefits included

in the product offering. At a more mature stage of the

product, there are given opportunities for the brand to excel if

it is able to add enough intangible benefits to the product.

When successful, this new bundle of tangible and intangible

benefits can produce higher customer satisfaction, which in

turn can generate higher customer loyalty in the long term.

Yet, a more mature stage can combine a product-brand

where both tangible and intangible benefits are salient withoutany set (tangible or intangible) prevailing over the other.

Alternatively, this stage can privilege the brand emphasizing

the intangible benefits. The consequences of either approach

(product-brand or brand alone) on customer satisfaction,

however, are distinctive: the brand alone is able to produce a

stronger satisfaction-loyalty relationship than the product-

brand combination. Nevertheless and despite the benefits of

achieving the stage of a brand alone, it seems that both

customer and manufacturer/provider have to pull up the

brand. The manufacturer/provider cannot reach the highest

stage without the customers help. The customer would finally

Table II Satisfaction-loyalty relationship: goodness of fit by type of product

Electronic products Wine products

Brand alone Product-brand Product alone Brand alone Product alone

Goodness of fit indices

x2 50.405 (8) 30.354 14.466 44.925 45.265

df 8 8 8 13 13

p # 0.001 # 0.001 # 0.001 # 0.001 c 0.001GFI 0.887 0.975 0.986 0.939 0.934

Increases in goodness of fit

NFI 0.885 0.966 0.985 0.836 0.831

IFI 0.902 0.975 0.993 0.878 0.873

CFI 0.900 0.974 0.993 0.874 0.869

Adjustments for parsimony

x2/df 6.3 3.79 1.8 3.5 3.48

Table III Satisfaction-loytalty relationship: intensity of the differences

Differences

Fishers

Z-test

Significance

level

Electronic products versus wine products

STP ! LTP (electronics) and STP ! LTP (wine) 6.32 0.01

STM ! LTM (electronics) and STM ! LTM (wine) 6.91 0.01

Electronic products

STM ! LTM (electronics) and STP ! LTP (electronics) 2.33 0.05

STP ! LTM (electronics) and STP ! LTP (electronics) 5.19 0.01

STP ! LTP (electronics) and STP ! LTP (electronics) 2.86 0.01





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accept the brand alone as the subject of his satisfaction and

follow-up loyalty.

The above fitting process between product or brand

adoption and customer satisfaction-loyalty is more intense in

the world of innovative products, such as electronic products,

as compared to traditional products, such as wine. Innovative

product processes, such as the ones involved in electronic

products, accelerate the interaction between adoption andrelationships. The intensity in technological developments is

usually matched by customers higher participation in such

processes. By contrast, traditional products do not require

either technological innovations or active customer

participation or both in the usually slow-paced development

of the product. As a consequence, traditional products do not

reach high levels of satisfaction-loyalty, at least not as high as

the ones achieved in innovative-product processes.

Managerial implications

The practical implications of the results achieved in this

research are three-fold. First, managers, particularly, product

or brand managers, should pay attention to the development

of the product by itself. The customer pays attention to such

development when the product is new or innovated and shows

satisfaction even when taking into account the product alone.

Of course, the level of customer satisfaction achieved is not

very high and does not generate strong customer loyalty but is

present and can mark the initial point of a successful path in

both product development and customer satisfaction-loyalty.

Second, managers should use the product-brand stage, an

intermediate level in product development, to enhance the

brand and its intangible benefits over the product and its

tangible features. The combination is not always of equal

parts or equal importance, but it signals the presence of both,

without either prevailing over the other. To continue progress

in product development, the company should attempt to

make the brand salient by enhancing the intangible benefits ofthe product if it finds that the customer is ready for that stage.

The customer is ready for the brand stage when he or she can

decide on the basis of the intangible benefits of the product,

ceteris paribus, the tangible features already in place. If moving

to the higher stage of the brand alone is difficult, either the

product-brand combination will have a longer life, delaying

the stage of the brand alone, or the customer satisfaction is

strongly linked to the tangible benefits of the product, making

more costly to the company the addition of the chosen

intangible benefits.

Finally, the shifting process from product alone to product-

brand to brand alone is faster in technologically innovative

products. In this product category, managers can use such

advantage to achieve the highest stage (brand alone) faster

with probably short periods of product alone and product-

brand combinations. Conversely, managers can have

insurmountable problems in accelerating the process in

traditional products. Correct policies linked to traditional

products can emphasize the product or the product-brand in

the long term even if the stage of the brand alone can develop

at some point in the future. This is a healthy guidance for

managers of traditional products, so that they should not

waste time and resources in developing the brand in

traditional products that require longer life in the previous

stages of product alone and/or product-brand combinations.

Consequently, company positioning policies should:

. start with the product, particularly when developing new

products or innovating existing ones;. evaluate product and brand combined when product

development has reached a state of maturity that is

considered enough to maintain a brand; and. culminate with the policy by focusing on the brand as the

last stage in the learning process.

Limitations and future research

When studying the satisfaction-loyalty relationship as derived

from the product adoption process, the literature has ignored

both the product alone and the product-brand combinations.

In this research, we have addressed this forgotten problem

and clarified that customer satisfaction and loyalty start early

in the process, that is, in the development stage of the product

alone. Despite this clarification, however, much remains to be

done. We have tested only three quadrants in the proposed

typology of satisfaction-loyalty relationships by levels of

product-brand presence. The other quadrants, except the

one where there is no brand and product, can also be and

should be tested empirically in order to validate their

corresponding formulations. In addition, further studies areneeded regarding the two stages we have tested empirically,

that is, the product alone and the product-brand

combinations. Whereas previous studies have privileged the

brand over the product in its effects on customer satisfaction

and loyalty, this is a new study and validation of the findings is

called for in other product lines, other market conditions, or

other measures.

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Executive summary and implications formanagers and executives

This summary has been provided to allow managers and executives

a rapid appreciation of the content of the article. Those with a

particular interest in the topic covered may then read the article in

toto to take advantage of the more comprehensive description of the

research undertaken and its results to get the full benefit of thematerial present.

Why product is important

Research into customer satisfaction and loyalty has so far

almost exclusively focused on brands. In contrast, products

have largely been ignored and considered as part of the brand

rather than a separate entity. That customer satisfaction and

loyalty can in fact be directed at the product has therefore not

been acknowledged. One consequence has been reluctance

from marketers to use the product as a means of generating

satisfaction and loyalty. Torres-Moraga et al. put forward the

view that the product is the starting point for the satisfaction

and loyalty process, whereas the brand represents the

advanced stage.

Gaining satisfaction and loyalty at this initial phase canresult in several benefits, including first-mover advantage,

low-cost proactive innovation and an opportunity to redefine

the market. In contrast, lost market opportunities, market

leadership and the higher costs associated with reactive

innovation are some consequences of ignoring the product

stage for such purposes.

However, the influence of product on satisfaction and

loyalty may depend on the product type. Indications suggest

there will be less impact with traditional goods like food and

drink but considerable significance when the products are

innovative. Automobiles and electronic equipment are two

product areas noted in this respect.

Satisfaction is essentially viewed as the antecedent to

loyalty. Satisfied customers become loyal customers whoexpress this loyalty through their purchase behavior and

future purchase intention. But loyalty that merely exists at this

behavioral level is dismissed as spurious by some observers.

The argument here is that loyalty is more profound when it

incorporates attitude as well as behavior since it reflects

cognitive, affective and conative attachment on the

customers part. This level of loyalty is often expressed

through such as positive word-of-mouth, recommendation to

others and a refusal to consider rival offerings.

A satisfaction-loyalty typology

Based on the existence of a life cycle whereby products evolve

into brands, the authors suggest a typology to elucidate the

process. Eight different stages combining various levels of

product and brand presence are suggested. The present study

focuses on customer satisfaction-loyalty relating to three of

these stages:

1 Product alone, when consumer evaluation occurs for the

first time.

2 Brand alone some consumers will opt for a specific

brand for a range of different products. Take Sony, for

instance. Those who support this brand may purchase

television sets, disc players, cameras or various other

electrical appliances or gadgets.

3 Product-brand past research has acknowledged this

intermediate phase where customer selection of a

particular product will be limited to within a small range

of brands. One example would be narrowing the choice of

a new television to Samsung, Phillips or Sony.

Research was designed to examine the extent of satisfaction-

loyalty within these different adoption phases in relation to

either traditional or innovative products. Wine was chosen for

the traditional product and electronic goods as its innovative

counterpart. Of the 1,233 respondents, 830 purchased

electronic products and 393 were wine buyers.

Findings indicated that customer satisfaction and loyalty

was:. Positive and significant in all three situations.. Stronger for brand adoption compared to product

adoption. Adoption of the product alone is enough to

generate the satisfaction that in turn can lead to loyalty.

This occurs on the basis of functional attributes and other

tangible product features such as appearance. However,

the brand is also able to boast additional components

containing symbolic and emotional value. In additional to

attachment with these intangible attributes, potential

exists for the customer to engage with the personality

perceived in the brand.

Likewise, the impact of satisfaction on loyalty was greater for:. Product-brand adoption than for product adoption alone

but weaker than for brand adoption alone. The product-

brand stage combines both tangible product qualities and

intangible brand benefits during a development stage

when neither product or brand can dominate.. Adoption of innovative products than for adoption of

traditional products. The authors suggest that consumers

are more involved with innovative products and may

therefore be more demanding. This is likely to force

manufacturers of such products into striving harder to

deliver satisfaction. In contrast, consumer involvement

with traditional products is invariably much lower.

The study findings show that satisfaction and loyalty do begin

much earlier in the process than previously acknowledged.

Satisfaction is possible at the initial stage providing the

product meets customer needs. However, the scarcity or

absence of intangible and psychological benefits at this time

means that the intensity of satisfaction is usually not high. But

this does not lessen the significance of this stage in helping to

generate customer loyalty and satisfaction that can increase

during the subsequent phases and over the longer term.

Marketing ideas and future research

Torres-Moraga et al. urge marketers to place more importance

on the development of the product as customer interest in

such developments is high when products are new orinnovative. Any resulting satisfaction may be limited but it

provides the foundation that can aid product development as

well future increases in customer satisfaction and loyalty.

In the product-brand stage, the emphasis should be on

showcasing the intangible features more than the products

salient qualities. When the customer is influenced by

intangible features alone, the time is right to move to the

final stage and make the brand more salient. If marketing the

brand alone proves difficult, the product-brand stage may

have to last longer. On occasions, it could be that satisfaction

is inextricably linked to the tangible product benefits. A focus





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on the intangible features becomes more difficult when that is

the case.

The transition from product alone to brand alone via

product brand is much quicker for technologically innovative

products. Managers should use this knowledge to accelerate

to the mature stage as quickly as possible. Conversely, moving

to this stage with traditional products can be extremely

difficult and ultimately unproductive. Rather than wastingvaluable time and resources, it is more advisable to invest the

effort into developing effective strategies for the product alone

and product-brand stages.

Given the novel approach of this study, Torres-Moraga et al.

suggest further exploration of customer satisfaction and

loyalty within these initial phases. Likewise, the findings

should also be examined in relation to different product types,

market conditions or other measures.

Further study could additionally concentrate on other

stages of the authors typology. This research could, for

example, investigate customer loyalty to a bundle of products

or set of brands or to various product-brand combinations.

Study could also focus on situations where satisfaction and

loyalty is conditional because it depends on specific mixes ofproduct type and brand such as, for example, Sony televisions

or JVC disc players.

(A precis of the article Customer satisfaction and loyalty: start

with the product, culminate with the brand. Supplied by

Marketing Consultants for Emerald.)

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