Advertising may be both strongly persuasive and nudging, depending on the chosen audience and the main idea a new advertising campaign wants to implement. Advertising is a strategy which applies to customers’ emotions.
It is persuasive when it is directed at the switchers, people who either have never used the products of a specific company, or who do not use it constantly. The same advertising campaign may be nudging for those who have been using the products of the company constantly.
It is obvious that two different kinds of customers, loyals and switchers, should be influenced by means of advertising in two different ways. The research conducted in the sphere of customer attitude to different brands with the purpose to understand companies’ price promotional decisions has allowed us to make a number of important conclusions.
First of all, when brands have high number of loyal customers, they offer high range of price and higher regular price. Second, in case when a number of switchers are low, the strong brands use higher average proportional depth and vice versa. Third, having low customer loyalty, brands try to promote their products more frequent (Jing & Wen 2008).
Segments of Loyal Customers
It will be correct to say that most customers are multibrand buyers, but, at the same time, it has been noticed that many people claim that they buy the products of a specific brand. If to consider the loyal customers’ segmentation from the time perspective, it can be stated that almost all appear to be 100% loyals in a week and even in a month. About 10% remain 100% loyals in a year time perspective (Barnard & Ehrenberg 1997, p. 3).
Considering loyals’ segmentation, we should touch the issue of loyalty conceptualization. Customers become loyal in three reasons, (1) positive primary attitude, (2) revealed behavior, and (3) purchase situation (Uncles, Dowling & Hammond 2003, p. 295).
Segment of Switcher Customers
Switcher customers’ segmentation is a difficult affair, there is no clear literature evidence which shows that such segmentation is systemic, still, it is possible to create three different subsegments which create switchers segmentation.
- Deal sensitives. People who buy different things without being dedicated to a specific label.
- Price sensitives. Price is the main activity for choosing an item. Switching from one brand to another, customers just try to buy the item they can afford.
- Private labels. Buying private labels, these people still use manufactured products without differentiating brand names due to their unimportance for them (Barnard & Ehrenberg 1997).
Reference List
Barnard, N & Ehrenberg, ASC 1997, ‘Advertising: Strongly persuasive or nudging?’, Journal of Advertising Research, January/February, pp. 1-10.
Jing, B, & Wen, Z 2008, ‘Finitely loyal customers, switchers, and equilibrium price promotion’, Journal of Economics and Management Strategy, 17, 3, pp. 683-707.
Uncles, MD, Dowling, GR & Hammond, K 2003, ‘Customer loyalty and customer loyalty programs’, Journal of Consumer Marketing, vol. 20, no. 4, pp. 294-316.