Build Brand Loyalty Among The Consumers In Thailand Marketing Essay

Published Date: 23 Mar 2015

The differentiation strategy will be used to distinguish Tesco Lotus's products and services against its competitors. Differentiation strategy means employing different characteristics to attract customers, for instance, offering products with better performance and unmatched customer service to clients compared to current competitors.

If a company successfully differentiates itself from competitors, it is able to achieve sustainable competitive advantages and charge higher prices for its products and services. However, in order to successfully differentiate its products and services from existing competitors, there would be extra investments involved in building the brand, for example, high advertising spending to market the brand promise and benefits to customers. But the good news is companies which invest in such brand building exercise usually reap the benefits of their investments in the long term when people recognise their brands and build loyalty to their products.

Brand Differentiation

As mentioned earlier, brand is a seller's promise to consistently deliver satisfaction and quality to the buyer. A brand creates perceptions in the buyer's mind and shapes buyer's expectations about the product or service. Brands that are well crafted and designed will not only initiate brand preference but also create brand insistence. Such brands promise benefits which are relevant and differentiated to their customers. Once the brand has reached the stage where customers insist on consuming only products or services from that particular brand, customers will not look for other alternative brands even when the brand is not available. This situation leads to a stage called brand loyalty.

To achieve this stage, the brand should promise differentiated benefits which are supported by quality and expectations, and the products and services must deliver on those promises. The differentiated benefits must be perceived by the target customers as unique and of utmost important to them and are the only solutions which will be able to address their discerning needs. Customers must be able to understand the benefits of the brand, be convinced that the benefits will be to their advantage and are not addressed by other competitors, and are unique to that particular brand. [1] 

Generally, some common brand differentiation benefits are as follows [2] :

Important and of great value to the customer - benefits of the brand are aligned with values of the customer and are deemed important by them.

Builds strong self-image and aspirations - the benefits of the brand strengthen the self image of the customer or present what the customer aspires to be, for instance, benefits of skin care or beauty products which promise beautiful skin and appearance when regularly used by customers.

Admirable qualities - the brand owns qualities that are admirable by the customers.

Excellent customer service - the customer service of the organisation supporting the brand is excellent and easily unmatched by other rivals. A good example will be brands providing banking and financial services.

Superior performance - the product or service provides excellent performance and creates satisfaction to customers. Expectations of brand are met as indicated by brand promises.

Trustworthy/heritage - the brand has been in existence for generations, indicating that its brand promises are trustworthy. Continuity of the brand after many generations is proof that the brand has developed and weathered competitions, yet is still able to stand tall.

Technology leader - the brand is the first to come up with the technology and constantly develops and reinvents itself to always be relevant to customers' needs and rapid changes in technology.

Admirable qualities of founder - the founder is someone famous or well-known.

A pioneer brand - the brand is the first to be introduced for a product or service within a particular category.

Most popular brand - the brand is the most popular for a product or service and is widely used by a large majority of consumers.

Most convenient - the brand can be found everywhere and is easily accessible to customers.

Focused on a particular customer segment - the brand addresses the needs of a specific market, for instance, asian women, diabetic consumers, etc.

Choice of experts - the brand is endorsed by experts in the field, for example, a particular brand of toothpaste endorsed by a dentist.

Provides value for money - delivers good value for the price paid for the product.

Products are natura/organic - appeal to a certain segment of the market who consume products with no artificial ingredients or additives.

Packaging - the packaging of the brand is stylish, unique and attractive.

In order to support the claims made by a particular brand when it differentiates its benefits from that of competitors, the brand promise must be further strengthened with proof points to convince the consumers. Some of the common kinds of validation points generally used are:

Endorsements from experts - supporting statements from experts in the field concerned can help to reinforce the brand promise made.

Reports from industry analysts.

Testimonials from customers who have been using the brand may also motivate new customers to make their purchase.

Money-back guarantee - if the brand is highly confident of its promises to consumers, it will not hesitate to offer money-back guarantee to its customers. [3] 

Tesco Lotus in Thailand focuses on the following brand differentiation strategies:

Best quality products at the lowest prices

All Tesco stores worldwide generally hold on to the same practice of offering lowest prices for the best quality products and services. In addition to the wide ranging products of other brands, Tesco Lotus also offers its own in-house brand that falls into 3 categories of pricing - the lowest priced items in the "Value" range, mid-priced products in the "Choice" range and the upmarket "Finest" range. Having its own in-house brands in several product categories is an excellent strategy to cater to different income segments of its customers.

Large selection of products and services

Tesco Lotus tries its best to offer virtually everything possible in its stores. It aspires to become a one-stop centre for its customers, selling products and services which appeals to all segments of the population in order to provide convenience to its customers. Tesco Lotus currently offers everything from grocery items, fresh produce, house wares, games shops to banking services. It also promotes quality, local products which are made in Thailand, and helps the local Thai producers to expand the market overseas through its vast number of outlets globally.

Comfortable

Tesco Lotus creates a comfortable shopping environment for its customers by providing spacious floor space and friendly employees who are always willing to be of service. Besides shoppers, such comfort also appeals to other customers who just want to chill out and relax at one of the cafes after a long day in the office.

Customer convenience

The wide selection of products and services that are available under one roof means customers only need to go to one place to do all their chores, that is from shopping , play, eat and perform banking services.

Excellent customer service

The management of Tesco Lotus give close attention to customer convenience and comfort while shopping. It makes sure that their employees are well-trained give their level best in serving customers in order to ensure that customers have only happy experience and good perceptions when they come to shop at Tesco. This makes Tesco stores a household name and the leading grocery retail store in Thailand. To illustrate, one happy customer featured in the given article is clearly impressed with the extra service whereby the employees will bring your purchase out to the parking lot or load your purchase into your car at the store front once you're done shopping.

Best experience for customers

When customers are completely satisfied with the experiences they have had while shopping at an outlet, chances are they will share the positive experiences with their friends and families. "Word of mouth" advertising is the best and most credible source of promotion for a brand. For instance, two customers who are featured in the given article provided their comments on how they were completely satisfied with their shopping experience at Tesco Lotus. They are excited about the "under one roof" concept where together with their family members, they can do just about everything possible including eat, shop, play games and pay bills. The wide range of products which cater to all age groups makes shopping for the entire family fun and enjoyable.

Tesco Lotus attracts about six million shoppers to their stores each month. This is indeed proof that the Thai people find Tesco appealing as it fulfils their needs for grocery shopping. Emphasizing on its main slogan of "Every little helps", Tesco has successfully aligned its corporate values with those of the Thai customers. Such emphasis help reinforce its brand differentiation benefits to customers, making Tesco Lotus a grocery retail store of choice for people in Thailand.

Brand Loyalty

Achieving brand loyalty is the ultimate reward for any branding exercise. For many organisations, brand royalty helps to make the business successful as it encourages customers to make repeat and continued purchases of the same products and services.

Brand loyalty develops when consumers perceive that the brand consistently delivers on its brand promises which meet their needs and values. Consumers who are already convinced that the quality and benefits of the products and services of a particular brand meet the expectations, it becomes easier for them to make future purchase decisions for the same products and services. With continued and habitual use of the brand, customers develop close association with it, hence creating a loyalty to the brand.

Generally, people who have been consuming products and services of a particular brand have the tendency to buy related items carried by the same brand. Such brand extensions benefit the organisation which has invested a substantial amount in building the brand. Achieving this kind of customer loyalty creates brand insistence whereby customers will not easily switch to other brands even when offered better pricing from competitors.

Basically, brand loyalty can be achieved through the following:

Brand positioning - organisations need to properly position their brands so that customers may perceive that the brands offer the right features and benefits which fulfil their needs. Also, brands that have been successfully positioned for some time need to be "repositioned" once in a while in order to create "freshness" in terms of benefits to customers and improved packaging so that customers will not deem the products to be obsolete and no longer relevant to their changing lifestyles.

Brand communication - brand messages which are clearly communicated to consumers will result in positive understanding of your brand promise and also distinguish your brand from that of competitors. By successfully getting the brand messages across, customers may better understand the brand benefits and advantages that they can expect from your brand. Confused customers are very unlikely to purchase brands that they perceive as of no benefit to them.

Excellent product qualities - an important aspect to influence repeated purchase and brand preference is through maintaining the quality of products and services over a period of time. Customers will stick to your brand and not look for other alternatives in the market if they perceive that the brand produces reliable and quality products at all times.

Credibility - credible products and services which consistently meet expectations and deliver on its brand promises lead to brand insistence and loyalty over time.

Customer feedback - getting feedback and response from customers via feedback forms or surveys help establish positive relationship between the brand and its customers. In addition to the valuable information and suggestions that you can get from your customers in terms of further developing your products and services, such communication will make customers feel valued by the organisation. Organising activities with customers can also foster closer ties with people who have been supporting your brand.

Tesco Lotus has been successful in becoming the leading grocery retailer in Thailand due to the close attention given to its customers' needs. Addressing customers' needs by offering virtually everything in all its grocery stores creates make shopping more enjoyable and comfortable for its customers.

Although the grocery retail chain has captured a large share of the market in Thailand, it does not rest on its laurels. Instead, Tesco Lotus continues to strengthen brand loyalty among its customers with the following strategies [4] :

Excellent Service - Tesco Lotus emphasises on providing excellent service to all its customers all the time. Its employees are specially trained to efficiently handle customer queries and address their problems. As a result, Tesco Lotus employees are perceived by customers as very friendly and are always ready to lend a helping hand should the customers require any form of assistance when they are shopping.

House Brands - Tesco offers its own house brands which falls into 3 categories of pricing - the lowest priced items in the "Value" range, mid-priced products in the "Choice" range and the upmarket "Finest" range. Having its own in-house brands in several product categories is an excellent strategy to cater to different income segments of its customers.

Loyalty program "Tesco Clubcard" - Tesco's loyalty program rewards its frequent customers with cash rebates in exchange for points collected from accumulated sales made quarterly. In addition to cash rebates, card members are also given promotional discount vouchers which they receive in the mail. This program encourages customers to do their weekly and monthly groceries at Tesco Lotus stores in order for them to collect points and get rewarded for the purchases made. The Tesco Clubcard is offered at no cost to shoppers who sign up for the program.

Monthly Promotions - Besides everyday low prices on certain items, Tesco Lotus also offers monthly promotions especially at month ends to attract shoppers who do their major monthly grocery shopping. These promotions provide substantial discounts on basic necessities and fresh produce which help customers to save on their monthly household expenses.

Community Service - Tesco Lotus gets involved in local community service and activities in order to build close rapport with the surrounding community in areas where their stores operate. In that way, they can foster closer ties with the local community who are also their customers. This is an effective way for Tesco Lotus to give back to the community which supports their business operations, and creates a sense of belonging for the customers towards them. Such ties reinforce their brand image within the community and strengthen loyalty to their brand. [5]