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The Impact of Brand Loyalty on New Product Launches Dissertation

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Updated: Apr 19th, 2019


Establishing brand loyalty for a new product launch in the jewelry sector in Taiwan is an extremely challenging component of developing marketing campaigns. Whether the new product is a novel entity or one that adds value to existing products, a vital aspect of such functions is the prevalence of a hypercompetitive environment.

As this paper has proposed and demonstrated, the present marketing research methodologies used by majority of the companies in ascertaining their ideal brand positioning are not efficient and do not allow the development of actual and aspiring themes for creating brand loyalty. Perhaps this is due to the fact that potential customers are made to consider the characteristics of the products from the firm’s perspectives and the marketing strategies do not exhaustively address the aspirations of customers.

This paper has examined several approaches in the context of brand loyalty for new product launches in the Taiwanese jewellery sector with a focus on customer driven positioning in keeping with other quantitative and qualitative means that are utilized in professional development of new product launches. The paper has also delved into the processes that firms engage in while undertaking to launch new product lines.

The feasibility of introducing new products including testing, designing and marketing in regard to product launches have been examined in the context of marketing and impact of brand loyalty on new products in the jewellery sector. The most important and critical factors that positively impact the determination of a product’s brand loyalty have been examined in the light of factors that makes firms to achieve such a situation.


Scope of New Brands in Jewellery Market

The jewellery market is considered to be one of the most fragmented although it is amongst the most lucrative sectors in providing products that are aimed at men and women.

Jewellery items are sold as luxurious goods, and are primarily of three types, fine jewellery that comprises of 14 carat gold and precious stones; bridge jewellery that is often referred to semiprecious and sterling silver costume; and fashion jewellery that is made of different materials such as white metal, brass, wood, glass and plastics.

The present business environment is now collectivised more than ever before in requiring maximum information, which is the major determinant in making all business decisions.

As most consumer goods markets and segments near maturity, the significance of customer retention has assumed greater proportions, primarily because the numbers of new customers are gradually getting reduced. Strong brand loyalty has thus become the primary objective of all marketing teams as they bear in mind that there is a strong link between increased profits and loyal customers.

It is thus important to have insight about the different levels of importance placed by consumers to specific brands in the context of democratic and national perceptions. There is strong need to have adaptation and summaries in the context of strong academic structures that are aligned with realistic issues pertaining to brand purchases.

The firms stand to gain in having detailed action plans that offer examples and strategies pertaining to more innovation and better marketing campaigns. It is known that almost half the consumers recognize that there is a lot of choice available to them while making purchase decisions.

However customers also understand that they have to be open-minded in trying new experiences with new products. Brand loyalty increases with age and the purchase process is driven in being inhibited by the introduction of new products by the same company.

On the one side, experimental and promiscuous customers get encouraged to try new products, while customers that are hard pressed for time have no choice but to continue buying their trusted brands.

In today’s world where new product launches in different industries may vary greatly depending on whether it is an established brand, which may differ only slightly from the existing product line. Competition may also come from a relatively young brand that tends to innovate and change more from its existing products.

In the fashion industry, specifically in the Taiwanese jewellery field, new product launches are generally followed by trends in the established luxury brands such as Tiffany, Chanel, Cartier, SWAROVSKI, Coach, and etc. with the leading brands’ great influence in fashion magazines and often set the theme for the next desirable items for people to seek after.

Thus, jewellery retailers in Taiwan will tend to launch new products design that has features to catch consumers’ desire of fashionable items in terms of features of the new products from the established luxury brands. This strategy is regarded as a low risk strategy of introducing a new jewellery product.

Because a brand name has great impact on how the consumer perceives the products and services, it is able to communicate messages to the consumers from prior purchases which allow them to specify, reject or recommend based on their experiences (Fred & Paul, 2000). It is important to investigate the effects of brand loyalty on the consumer’s behaviours, to separate from the effects of a new product on an existing brand from a new brand.

All successful businesses depend a great deal on brand loyalty, which is the ultimate objective that any company aims for. Essentially, brand loyalty implies the customer’s commitments towards the brand and indicates that not only he looks for his own benefits but is also open about thinking from the brand’s perspective.

Brand loyalty is expressed through repeat purchases and is often reflected in the customers’ positive behaviours such as praising the brand before other people and enhancing the brand’s image through word of mouth. The ultimate measure of brand loyalty is not the repurchasing pattern for any product because the people chasing can also be done because of other factors such as the absence of alternatives. Such behaviour is referred to as spurious loyalty.

However brand loyalty implies much more and becomes possible when companies successfully create emotional attachments of customers with their brands. Brand loyalty is thus a big asset for the company. Brand loyalty is the conscious or unconscious decision of the customer that is revealed through his or her purchase behaviours.

Customers develop brand loyalty because they believe that the brand offers quality products and services at appropriate prices. When customers realise that they are getting value for their money they get encouraged to buy the firm’s product repeatedly (Bryman, 2006).

Brand loyalty impacts a number of issues that range from designing of the product to making its advertisement strategy and understanding the clients need to use efficient marketing strategies. Brand loyalty becomes possible because customers have positive perceptions about the product.

It is equally important for firms to develop loyalty amongst customers for its new brands and to retain them. It is thus crucial that customers view the firm and the product positively because that will create a strong basis in their buying habits and patterns. When consumers buy products they initially make trial purchases and if they are satisfied with the product they will make repeat purchases. It is important to understand that customers will buy products that are safe and of good quality and that meet their aspirations.

New products development in the jewellery industry require in depth market research of not only the current industry trends, but also of the consumers’ brand loyalty and their commitments (Hofmeyr & Rice 1999). Concepts and ideas testing through market survey prior to launch would help to develop strategies that will increase the prospect of success.

However, as Hofmeyr & Rice (1999) pointed out that commitment has to do with consumer’s mindsets such that uncommitted people’s experience over a brand may be unhappy or it may be overcrowded or simply not have a clear image over any brand.

Moreover, possible reasons that may explain the purchase behaviour of customers may relate to the location, structure of consumption, market maps, and frequency of the purchase as noted by Tranberg & Hansen (1996) in being the success determinants for leading brands. Tranberg & Hansen (1996) performed a study of more than 600 branded consumer products to conduct a research analysis for pattern of consumer purchases.

Customers that are loyal to a brand have typical mindsets and in being committed to a brand they make repeat purchases. Loyal customers will be willing to pay higher prices for their preferred brands once they realise that the brand offers value for money. Brand loyalty is of significance because it ascertains the sales volumes of products and services.

When customers are loyal to the brand they will not be sensitive to price changes and will be ready to pay high prices in getting the unique values that are offered by the brand. Brand loyalty eventually leads to higher profit margins and cost-cutting because loyal customers are not sensitive to sales promotions. Once the firm establishes brand loyalty it does not require to spend significant amounts on marketing and advertising efforts.

Business wisdom is clearly suggestive of the fact that a costly winning customers than retaining them. Irrespective of the size of the industry, businesses that are able to retain customers will be better off because of lower marketing costs, higher brand values, less customer sensitivity to prices and better financial outcomes.

Thus there is a strong need to invest in behavioural research about customer behaviour in order to understand the underpinning on which retention and loyalty is developed. While retaining brand loyal customers firms have to consider the effect of brand loyalty on the profitability of the company (Pickton, 2004).

In order to understand the concept of brand loyalty it is vital to view it in the context of the firm’s over all marketing and business plans, specifically its strategies and objectives. Along with the traditional marketing activities, other aspects of the marketing plan are also pertinent in this regard.

Other elements in the context of optimal branding of new products include distribution, pricing, product and the quality of service provided to customers. Branding activities must be carried out during the last phase of the marketing and business planning processes and must not be viewed as a stand alone set of actions which have little relevance to the firm’s markets, purpose and goals.

When launching a new product the starting point of effective branding in order to create brand loyalty is its efficient product positioning. But whatever position that the firms aims at creating for the product, the ultimate position is the one that comes to prevail in the minds of the target audience.

Efficient positioning of new products has to be based on the actual needs of consumers, researched market facts and the quantifiable attributes of the new product. The product attributes have to be precisely and strongly communicated to the target audience since branding is based on hard facts and impacts business results to a great extent.

In gaining a larger share of the market, firms are mostly engaged in product launch strategies and tactical launching capabilities. New product launches are exciting, rewarding and challenging at the same time and creating a strong and efficient positioning for new products is a highly methodical exercise which may not surely result in concrete marketing results. An effective product launch implies that there is a powerful brand and a well crafted marketing strategy.

To create brand loyalty, the marketing team of the jewellery firm comprising of brand managers, advertisement agency and marketing research teams make a strategy a few months before the actual launch of the product. Various customer attributes and aspirations are considered so that a template is designed that considers certain concept statements:

  • Target audience is indicative of the customer groups addressed by the concept statement.
  • Frame of reference defines the aspirations of customers.
  • The benefits statement outlines the major advantages that the product offers.
  • A basis for substantiating the positive attributes of the new product.

The marketing team will have to devise a problem statement that defines the unmet needs of the market in the given product category and the advantages that will accrue to consumers, emotionally and physically, by purchasing the new product. Marketing teams normally aim at developing several statements that are differentiated amongst each other and which define the wide array of different places where the new product could succeed and occupy a strong place in relation to present and future competitors.

Such concept statements can be tested by way of consistent rounds of marketing research efforts in ascertaining which ones resonate with different consumer segments in terms of different parameters such as motivational value, credibility and relevance.

This way the branding can be determined by finalizing a few strategies in keeping with the expected share of markets from different segments. After the branding decision has been taken, the next step is to ascertain how to efficiently deploy positioning amongst customers. Subsequent actions include material testing, logo testing and testing of promotional concepts.

Brand loyalty has become a widely discussed issue in recent years. It has been found to have strong relationship to brand personality, consumer personality traits, and relative attitude toward the brand and so on (Assael, 2003).

By knowing the drivers to the brand loyalty, it would allow the company to lower the failure rate for new product by devising a new product launch strategy.

The objective of this study is to explore the relationship of brand loyalty and consumers’ commitment, product satisfaction and perceived value and to examine the impacts of brand loyalty on new product launch especially in Jewellery Company in Taiwan. The research will be shown how a jewellery brand image can make customer eager to buy and what kind of strategies in the context of the brand can let people have their own loyalty.

Characteristics of the Taiwanese Market

Given that the majority of the fine jewellery and related materials in Taiwan come almost entirely from imports, it is important to examine the characteristics of the Taiwanese market in this regard. It is also important to analyse and determine the circumstances that impact the jewellery market.

Before launching a new jewellery brand, the firm will have to ascertain if people in the country can afford the new product and whether the income of citizens is adequate in implementing such purchases. There are some legal barriers that have to be examined in the context of the extent to which the government permits and promotes the import of such products.

The competitive environment, potential customers, market size and the potential for demand have to be ascertained. It is known that the local fine jewellery industry in Taiwan is not very competitive and is facing extreme difficulties in surviving the competition from branded and imported fine jewellery that is of excellent quality, higher quality of precious stones and superior designing and craftsmanship.

However, it is also known that Taiwan is considered the largest centre in the world for processed semiprecious stones and the country’s facilities in this regard are equipped with advanced processing and cutting procedures.

Aims and Objectives

The purpose of this research is to find out how to make customers’ brand loyalty while launching a new jewellery product in Taiwan. Because of some special brand the jewellery company made, other competitors find it difficult to penetrate this particular market. It is a way to discover why customers would choose their ideal brand instead of other competitors and why they have brand loyalty.

This research will examine the issues relating to what kinds of customers choose to become loyal to a brand and why they think that the brand is worth buying. This information will then be discussed on the secondary research and may show how a successful brand can result in higher profitability while being launched as a new product in the jewellery market in Taiwan.

Litrature Review

Influence of Brand Loyalty on Consumer Behaviour

The 20th-century has not given way to new trends in the jewellery industry; in fact the prevailing patterns are the continuation of trends in human behaviours that have revealed cyclical patterns across Taiwan’s history. Just because the world is becoming modernised does not mean that to introduce a new jewellery brand a firm has to start from scratch in investigating why some customers are loyal to brands and what kinds of issues impact their aspirations.

In essence, brand loyalty is a conscious or unconscious decision by customers that is revealed through intentions and behaviours to purchase the brand continuously. Such behaviours occur because customers perceive that the brand provides the right product features and quality at the right price.

Customer behaviour in this regard becomes habitual because customers feel familiar and safe with the product. To create brand loyalty, the jewellery firm will have to impact customer habits and motivate them in acquiring new ones while reinforcing in them the belief that the purchase of the new brand of jewellery will help them in getting enhanced values.

The principal source of competitive advantage for a firm in this context is the one that surrounds the image of which brand proves to become a valuable strategic asset. However many companies are not successful in creating a strong and clear message that differentiates their brand from those of its competitors.

It is required to distinguish the brand in a positive and memorable manner. The main challenge faced by a firm in this regard pertains to avoiding the shortcomings and removing the negative image that the firm or brand may be carrying in the market. A brand identity and vision has to be created that gives recognition to the brand as being higher than the attributes of other products in being surpassed or copied by them.

The firm has to view its brand as not only a service or product but as an entity that describes the company’s philosophy. More than an identity, the jewellery firm will have to create a unique brand personality for the new product. Unless the product has attention grabbing qualities and a strong personality, it can be easily surpassed by others. The new brand must have an exclusive company logo or symbol that will assist in generating brand loyalty and making it immediately identifiable (Brassington, 2002).

Effective marketing strategies depend upon design of the product and the extension of a mature brand by creating a complete understanding of memory, learning, motivation and decision procedures that impact what customers buy. Managerial decisions are highly dependent on theories of consumer behaviour while launching new products; in terms of timing of entry in the market, segmentation and brand management.

Branding is the most significant factor that impacts a product’s success or failure in the market and can have a significant influence on how the firm is perceived by customers. The brand is essentially not only a representation of the company’s product but it also symbolises the company and it is in this characteristic of the company that brand loyalty will emerge (Duboff, 2000). The cost of administering a product is quite costly and a complex effort.

Thus it is required to have strong market potential in ensuring the consistent financial viability of the product. Usually, financial hurdles are measured in terms of returns on investments and market shares. A significant benchmark for firms is the internal rate of return which is arrived at on the basis of the opportunity costs, which implies the amounts that the firm could have earned in the next best investment. Some firms are not proactive and just cap the amounts of investment dollars that are made available for rolling out the initial products.

If the jewellery brand is able to get recognition in the market it will benefit from economies of scale by way of packaging, recognition and production. Although the product itself may remain the same, the marketing strategy has to consider conditions in the local market and the marketing campaign will have to be tailored accordingly. Caution has to be exercised in that nothing offensive is revealed in terms of packaging in relation to culture and language.

Ehrenberg et al (2000) have asserted that a successful jewellery brand has to anticipate evolving consumer values, style and cultural trends so that the product appeals to customers in different segments. If the brand differentiates the consumers it may not be able to achieve the required positioning in the market. Multicultural advertisement campaigns will have to be devised to ascertain brand loyalty in diverse cultural and consumer segments.

The success of the new brand will be quite dependent upon the present status of the company. If the company has been successful in maintaining independent brands for jewellery products in different markets it will become risky and difficult to popularise a single brand. If the firm has been patronised in different markets and regions in accommodating local tastes the creation of a new brand is not recommended.

Competitive Environment in Taiwan

Presently, the import of precious metals jewellery, diamonds, pearls and gemstones account for more than 90 per cent of the total jewellery market size in Taiwan. In the year 2006, Taiwan imported fine jewellery valued at US dollar 1489 million which was 26 per cent more than the imports as compared to 2005.

The growth of imports of fine jewellery in Taiwan is projected to increase to US$745 million in 2010. Diamond imports in Taiwan are the second-largest amongst jewellery items and account for 25 per cent of total yearly imports. Majority of the jewellery imports into Taiwan are supplied by other Asian countries followed by European exporters and suppliers from Central America.

Branded and imported fine jewellery dominates the local Taiwan market and industry experts have estimated that fine jewellery imports will continue to increase at about 20 per cent per year for the next two years. Fine branded jewellery from America is widely recognized and popular amongst local customers.

In fact, branded jewellery from the US and from European nations are considered to be of excellent quality in terms of their design and processes. Brisk sales of Japanese and European brands in terms of excellent quality of pearls also characterises the Taiwanese Market.

Some of the well-known US brands of fine jewellery that are available in Taiwan are Harry Winston, Tiffany and Hearts on Fire. Popular fine jewellery brands from other nations include De Beers, Louis Vuitton, Hermes’s, Dior, Cartier, Mikimoto, Georg Jenson, Gucci, Boucheron and Chanel.

Demand Analysis of Jewellery Market in Taiwan

Constantly rising incomes, high levels of per capita Gross National Product (US$ 16,461) have allowed citizens to spend some parts of their income on luxury goods such as jewellery which is a strong symbol of individuality, social status and personal wealth in the country. In keeping with Maslow’s Hierarchy of Needs, people in China have begun to look up because their lower needs are being satisfied.

This elevation can be interpreted in assuming that many people consider jewellery as a means to express themselves and their status. In this context it is proper to assume that loyal customers will be willing to pay higher prices for their preferred brands once they realise that the brand offers value for money.

Brand loyalty is of significance because it ascertains the sales volumes of products and services. When customers are loyal to the brand they will not be sensitive to price changes and will be ready to pay high prices in getting the unique values that are offered by the brand. Brand loyalty eventually leads to higher profit margins and cost-cutting because loyal customers are not sensitive to sales promotions

It is now well established that upscale people in Taiwan prefer luxury items and have started purchasing branded fine jewellery. High-end customers prefer large sized diamonds of one to ten carats and also look out for precious gemstones. There is immense potential for jewellery brands in major cities of Taiwan such as Kaohsiung, Tainan, Taichung and Taipei, where the living standards are quite high and people have comparatively higher disposable incomes.

Fine jewellery customers can be classified into those that are price oriented, quality oriented and brand oriented. In order to create brand loyalty amongst customers for its newly introduced jewellery brand, the firm will have to address the aspirations of people in keeping with this classification, which will allow the winning over of added customers.

From the perspective of geographical distribution, the city that has maximum potential is Taipei that has a population in excess of 2.6 million and is believed to be the major market for fine jewellery because it has the highest number of income recipients in the country and is also a major centre of jewellery collectors, wealthy entrepreneurs and high income professionals.

The new jewellery brand must be launched in Taipei in order to pave the way for its popularity that will further be carried on to other cities in the country. The jewellery firm will have two arrange for promotion events that include effective advertisement campaigns that should be very appealing in stimulating consumption in order to achieve successful sales figures.

Market Size and Features

Female customers in Taiwan are considered the third biggest consumer group in the world that purchases fine jewellery and diamonds for themselves and are only next to Saudi Arabia and India in this regard. The size of the annual market in fine jewellery in the country was estimated at US$ 1145 million in the year 2005, which was an increase of 24 per cent as compared to 2004.

Many jewellery firms that sell global brands of fine jewellery have observed that there is immense potential for fine jewellery in the country. Several stores have opened in the country during the last five years and they have been constantly hosting private jewellery shows and functions for their customers. It has been found that on an average, the female Diamond customer in Taiwan owns three diamonds.

Given that in Taiwan, 24K carat gold accessories and diamond jewellery are a major choice amongst fine jewellery items followed by ruby, sapphire, emerald and green jade as the first choice in the local market, the new firm that desires to introduce a new jewellery brand in the market faces a positive though competitive environment and will hence have to adopt marketing techniques and strategies to lure customers and develop brand loyalty amongst them.

An added advantage for the new jewellery brands pertains to the fact that people in Taiwan prefer 24K gold accessories that are very popular and accounted for about 40 per cent of fine jewellery purchases made in Taiwan during 2005. People in Taiwan have always had a preference for gold that has figured prominently during marriages in addition to being widely used as valuable presents for newborn babies.

For several years 24K gold jewellery has been the largest market segment for fine jewellery in the Taiwan jewellery market and is followed by pearls, gemstones and diamonds. Another popular segment in fine jewellery items in the country is 14K and 18K gold items that continue to be market leaders. There is immense potential in this segment because the working age group from 22 to 35 that has average monthly incomes of more than US$1,500 is patronising more and more of such items.

In the last five years, there has been significant increase in the market share of branded premium fine jewellery items in Taiwan. Users and collectors of branded fine jewellery items in Taiwan are considered to be very quality conscious in addition to being knowledgeable and sophisticated.

They have immense interest in collecting fine jewellery items made of high-quality gemstones with excellent designs that are designed and crafted by experienced craftsmen. Additionally, in Taiwan jewellery items are also bought for the purpose of preserving personal wealth, allocation of property arrangements and for personal preferences.

Because of increasing personal income and added global exposure to Internet and mobility, local customers in Taiwan have begun to develop attitudes towards purchasing branded jewellery. In fact, purchasing jewellery has become a virtue of necessity, mainly amongst wealthy women in Taiwan.

More and more young working women comprise the workforce now and prefer gold accessories and diamond rings. The circumstances clearly indicate that there is immense potential for new jewellery brands to succeed in the Taiwanese market if they are professionally handled by making use of the right marketing, segmentation and positioning strategies.

Need For Market Segmentation

Before attempting to delve into further aspects of product positioning it is better to fully grasp the goals and processes of market segmentation. According to Charlene Prounis (2007), “positioning is the strategic process of analyzing a brand and identifying what makes it relevant and unique.

When done well, it should result in a compelling perception of a product relative to its competitors’. A sound positioning strategy can then be used to facilitate creative communications. In general, positioning must achieve three critical goals: It must be relevant, it must be differentiating and it must be simple” (Prounis, 2007).

In order to create brand loyalty the firm will have to adopt efficient positioning that is a task essentially performed by the brand and marketing teams and aims at influencing customers’ thinking patterns.

While positioning new products, a radical shift may be involved in the landscape of the specific customer segments whereby the objective is to venture into territories that open avenues in terms of what the product can be instead of what it should be.

Essentially, positioning does not pertain to what a customer likes or does not like but about what kind of persuasion will work in taking the desired course of actions. The positioning statement relates to integral and ideal enduring statements of purpose which represent a signal and organizing principle for every promotional development activity that follows. The idea is to establish major elements of messages which may fall in each of the under mentioned rubrics:

  • Problem statements- Optional elements of market positioning are inclusive of problem statements which build upon specific unmet requirements of the market that will be met by the new product.
  • Functional benefits refer to certain mechanistic or scientific properties of the new product which adds further utility to existing brands.
  • Emotional benefits pertain to the emotion which is derived by customers by using the product in question, in terms of for example, trust, confidence and reassurance.
  • Main themes are the truly exclusive benefits provided by the new product.

Marketing Strategy

By working upon such a learning and building technique, customers can be made to realize the actual advantages of a product and through this approach eventually arrive at a higher satisfaction level of new products. This approach can further serve as the basis for development of promotional materials in future campaigns.

Once the new jewellery brand is launched by the firm, its success depends upon whether the market has noticed it and whether average revenues and profits are ramping at a higher speed than costs during the first two quarters. A significant measure for the new product’s success is to see whether competition has reacted and market changed in keeping with the firm’s expectations.

This aspect is ascertained if the product reaches new markets and grabs sizable market shares from competitors. If the product demonstrates sales so that the firm is ahead of its projected profit curve the launch has been successful. The successful launch will then provide the jewellery form an opportunity to create a market environment that encourages brand loyalty (Mahajan et al, 1995).

Product launch has now become an art which can make or break new products. Successful product launches enables potential consumers to become conscious of the new product and they become eager to try it out.

The process of launching new products plays a crucial role in ensuring that the offering reaches the markets at the right time and in a cost effective method, though the entire process can prove to be a resource intensive and arduous effort.

But if the product launch process is executed efficiently, it makes a positive difference between victory and failure for the firm and paves the way for brand loyalty as more customers will have confidence in buying the product (Ehrenberg, 2001).

It is often said that a product that is well designed, suitably priced and distributed will not need much efforts for creating brand loyalty, rather consumers would be readily buying it. Some of the new products have the good fortune of being positioned in a seller’s market and producers of such products are able to sell their entire production without the need for promotion.

But the fact remains that in the Taiwan jewellery market, the competition is fierce whereby every jewellery firm has to make hectic efforts in communicating with buyers and luring them in providing exclusive advantages from buying their respective products (Aaker, 2004).

In the context of positioning of new products, Monica Brand has asserted that “product launch is marked by initial low sales and high start-up costs, mostly because of the heavy promotion needed to build customer awareness and entice demand.

This staff-intensive period should be brief if the pilot test was effective because early adopters should already be familiar with the product. The main challenge for the institution at this phase is to make sure the systems and staff are prepared for the subsequent growth phase, which will likely put a strain on the organization” (Brand, 1998).

The problem with the present research in the context of brand loyalty is that it is rather vivid. It is not enough for a product to enjoy a good brand image to be successful in the market. The product has to enjoy an explicit and distinctive image in the mind of the present and potential customer as compared to other brands in the market.

Successful positioning pertains to a situation whereby the product is able to establish a strong place in the minds of consumers. The objective of positioning is to establish an exclusive and advantageous image in the mind of target customers (Bhat, 1998).

According to Fill (2006), “positioning, therefore, is the natural conclusion to the sequence of activities that constitute a core part of the marketing strategy. Market segmentation and target marketing are prerequisites to successful positioning (Fill, 2006).

Current Research

As per research carried out by Goodhardt (1984) in terms of his study on nderstanding the path to purchase, the main drivers of purchasing a product are functionality and product attributes, present relationships, social contexts of consumers and psychographics and personality of consumers.

Goodhardt (1984) found that customers make choices on the basis of internal and external product characteristics that explicitly relate with the desirable characteristics and incurred costs for them while they buy goods and services by making choices amongst the several options that are available.

In this regard, intrinsic attributes of the product are the ones that cannot be altered unless the physical characteristics of the product or altered, such as comfort, safety, appearance, design, colour and style.

Extrinsic attributes are imposed by retailers and manufacturers and do not include integral components of the product such as, warranty, country of origin, brand and price. Research has clearly indicated that there are several factors that impact customers whereby they buy the given products.

The prevailing fashion trend is a major factor that customers consider while making purchases, which is clearly indicative of their change in tastes.

In the case of jewellery brands, a new brand has immense potential in conveying a specific social status or fashion image than existing brands. It is important to note in the context of a new jewellery brand that social identification implies great value and a sense of belonging to a given organisation or group (Lilien, Kotler and Sridhar, 2001).

Perfection consciousness and brand consciousness are directly associated with fashion consciousness amongst customers. Such consciousness further leads to the creation of to a new aspiration that can be termed as brand and fashion consciousness. Customers that are aware of such styles will be more likely to purchase the new jewellery brand.

Price and Quality

Price is a very important factor in this regard and has been described as the money that is charged for a product or service or the sum of values that consumers are willing to give in exchange for getting the benefits pertaining to the product or service. Price plays a major role when customers make choices about a brand.

Most customers are known to organise their knowledge of product categories in terms of the price levels pertaining to different products and bands (Sharp and Wright, 1999). In fact, price impacts perceived similarities of the given product to the psychological prototypes of lower or higher quality products. But prices are not the only attributes that customers use in making quality judgements.

There are other product attributes that impact quality judgements about price. Secondly, in keeping with the sense of sacrifice, price helps in forming the benchmark to compare utility gains pertaining to superior quality products. However such procedures of comparison are quite dynamic because the associated elements of money and quality of product alter during different times of purchase and consumption.

Several researchers have found that a status conscious market stands higher chances of being impacted by the characteristics represented by the brand, such as; feelings that the brand creates and the extent of agreements amongst the customers opinion and the brand image.

Research outcomes have also revealed that if representative and symbolic characteristics are higher, the positive feeling amongst customers will also be higher and they will be a congruent relationship amongst brand image and customer.

This will also lead to higher chances of the brand being perceived as having higher elements of status. Researchers have developed a concrete relationship amongst status consciousness and branded products in regard to the manner in which customers may become status conscious and adopt such an approach by displaying their personality through association with the brand (Bell, 1991).

An important factor considered by consumers while making purchases is quality and they constantly watch the fierce competition amongst companies in the context of quality. Many analysts believe that if a product is purchased by more and more people, it is implied that its quality is very good.

Urban and Hauser (1993) have emphasised that marketing teams must focus upon quality in their marketing strategies because it is not just possible to compete on the basis of price alone. In order to maintain a superior product position, companies have to invest in research and development for new products being introduced by them as also in terms of the manufacturing methods.

Quality can also be improved by focusing upon design and countries such as Taiwan are known to have government support in terms of financial assistance to improve quality and design.

Such policies in Taiwan are applicable to the jewellery industry also and hence the firm can benefit by getting financial assistance to improve its product design for the new brand of jewellery. A pertinent factor that the firm will have to be careful about is that the brand must meet ISO 9000 standards, which is strictly provided for by the Taiwanese government.

Advertisements and Celebrity Endorsements

Advertisements are non-personal communications from identified sponsors through the use of the mass media in attempts to influence and persuade the audience. It is all about effective communication of the required messages by making use of effective media such as newspapers, Internet, brochures, banners, billboards, magazines, radio and television.

The jewellery firm in question will have to make use of brand advertising which is the most visible and focuses upon developing long-term brand image and identity. In the modern business environment, celebrity endorsement is now commonly recognized as a necessity in advertising campaigns.

The jewellery firm in Taiwan will have to develop characters that are congruently associated with the product and the target customers. Companies have restricted control over the personality of the celebrity that has been created over the years.

But with the association of the celebrity with the brand, a brand personality is created and consumers are motivated to associate themselves with such brand personality by making purchases of the product.

The jewellery market has immense potential in this regard and because the jewellery item is a fashionable product, customers will not hesitate to associate themselves with the brand ambassador (Uncles et al, 1995).

Endorsements by celebrities have been known to create positive results through advertising and have led to increasing sales as compared to non-celebrity endorsements. Because the public feels motivated in being related to their stars, advertising companies use celebrities and capitalise on the customers feelings in order to make them attracted towards the brand.

It is well accepted that in sectors such as jewellery, clothing and sports advertising is a multi-billion-dollar industry whose prime objective is to impact customers in responding positively towards the advertised goods and services. Research has also revealed that majority of the people enjoyed watching advertisements that depict their favourite celebrities after which desire is created in them to buy the products promoted by such celebrities (Kim, 2002).

According to Joshi et al (2009), companies consistently face challenges while making decisions about entering new markets where they have a leveraging advantage in the current markets but there is no positive impact on the corresponding social influences. They held that the optimal entry strategies of firms under such circumstances cannot be compared to the well known strategies of now or never or now or at maturity, which have been widely cited in the available literature.

They attempted to establish that a powerful leveraging impact is not in the nature of enabling adequate reason for firms to try out new markets nor they should have any expectation of a back lash impact in deterring firms from entering new markets. The optimal strategy in this regard is necessitated by way of a careful trade off amongst the three issues of patience, back lash and leveraging.

Therefore, Joshi et al (2009) feel that “an astute manager can always find the opportune time to enter the new market if she takes into account the dynamic and recursive nature of cross-market interaction effects, where leverage enhances the backlash but backlash weakens the leverage in a nonlinear, dynamic fashion.

We illustrate that firms stand to benefit from explicit considerations of these effects in deciding whether and when to enter a new market. Furthermore, we explore how the optimal time of entry into the new market relates to the time of peak sales for the existing market, demonstrating that depending on the interactive effects of leverage and backlash, entry could be optimal either before or after peak sales in the existing market” (Joshi et al, 2009).

Brand Loyalty

The concept of brand loyalty has been researched extensively in the field of marketing as well as practitioners within their industry. Successful firms with large market share in their industry are often found to have large group of loyal customers that made repeat purchases.

Many researchers have tried to explain the factors, such as relative attitude, personality traits, brand personality, product involvement or consumer behaviours that leads to brand loyalty (Jensen & Hansen, 2006; Lin 2010, Quester & Lim 2003; Delgado-Ballester & Munuera-Aleman, 1999). From these personal traits, the customers will have different horizon to choose their brands.

While these factors have found to be quite significant drivers of building a successfully brand that leads to consumer loyalty, other researchers such as Sharp, Sharp & Wright (1999) questioned whether there’s any link between the consumer’s loyal behaviours to the brand loyalty, i.e. the repeated purchase of the consumer may be contributed to the lack of choice rather than satisfaction.

Also, Sharp & Wright (1999) argued that although attitude is an important factor to the brand, consumer’s attitude toward a brand may change as the situation chances and studies have shown that individual’s attitude towards brand only averages around 50% repeat-response rates.

Thus, the attitudinal loyalty is a situational variable that’s less stable and low predicative power over brand loyalty (Sharp, Sharp & Wright, 1999). Many researches can not explain this phenomenon for sure until now because the unstable element of keeping people brand loyalty.

While other researchers started to investigate brand loyalty in a different market environment such as e-commerce to look for similarities between them so that existing factors for brand loyalty can be used to explained e-loyalty (Gommans, Krishnan & Scheffold, 2001). Gommans, Krishnan & Scheffold (2001) investigated the e-loyalty framework in five sections: Website & Technology, Value Proposition, Brand Building, Trust & Security and Customer Service.

In the value proposition, traditional brands enjoy less competition, thus easier to maintain brand loyalty compare to e-commerce where price range is more important in maintaining e-loyalty. Website & Technology often comes together with Trust & Security, such that the consumer often judge the brand based on their first impression over the website, the look and feel and ease of use for navigation (Gommans, Krishnan & Scheffold, 2001).

Since consumers can not physically see the products and talk to the sales person in the traditional business, their feeling only judgement for the brand is through the web browser, so the stereotype always comes from the website which can make customers the e-brand loyalty. Therefore, generally the consumer’s satisfaction level is directly related to the brand loyalty which corresponds to their market share within the jewellery industry.

That is to say that the consumer tends to purchase a particular brand’s product is through the satisfaction level over the previous purchases rather than their perceived value, which is the factor driving the repurchase.

A new product launch and better strategy may be the group of consumers that have less commitment level on brand in order to gain market share. Otherwise, a customer who has brand loyalty, the competitors are hard to penetrate into the particular market share.

New Product Launch Strategy

New product development is essential for companies to remain competitive, and sustaining long-term growth. In today’s world where information is ubiquitous and innovation happens at breath-taking speed, a strategy for a new product from the initial stage of design to development and finally launching the product requires a careful and well tested plan to minimizes the risk of failure.

As pointed out by Jan Hofmeyr & John Rice (1999) that new product in grocery market is still extraordinarily high of up to 60% in the U.S.A.. Many models have been introduced in the market research academia to investigate the success or failure rate in a new product development in a hope to increase of success rate when the new product is introduced.

Model such as Simulated Test Market (STM) Models by Watkins is aimed to overcome some of the existing models’ lack of consumers’ orientation and overt social interaction dimension.

Also, as Clancy & Shulman (1992) pointed out that STM is a much cheaper way of evaluation of the new product and may provide an insight into how to maximize the profit for the company. Another advantage that STM offers is not only it takes less time in marketing results, noted by Clancy & Shulman (1992), but also that time is equivalent of money which is an important element of competitive advantage.

Moreover, STM maintains products security, such that the company doesn’t have to expose the new products test to the world that may potentially give competitors ideas and time to produce a similar competitive product or knock-off the products (Clancy & Shulman, 1992). Once other potential competitors make the similar products, the profit for the original company will be decreased by the market share.

Other variable, such as value-based orientation model proposed by Mazumdar (1993) that takes into the account of the perceived value of the products by linking the benefit and sacrifice which provided a framework for helping decision makers in a new product launch planning. From the company benefit view, the products will be made depending on worth it is for the company.

Relationship Variable

Wellan (1993) has conducted research on four different types of businesses: life insurance, telephone services, Business College, and salmon feed supplier to investigate if the relationship between product performances to brand loyalty is significant through variables, such as consumer satisfaction and brand reputation.

It has been found that brand reputation has effect on loyalty in all four types of businesses while satisfaction only has effect on loyalty when consumer has sufficient knowledge to evaluation the product and service they have purchased, such as the telephone services and Business College.

Jan & Rice (1999) also probed whether the consumer’s level of commitment is what’s driving the brand loyalty; hence a committed person is more difficult to switch to another brand, to explain a successful new product launch by consumers’ commitment level to the brand. It has been found that in a case study where a market dominated by a brand over 50% without brand commitment can easily lose their market share when a new brand appears (Jan & Rice, 1999).

Jan & Rice further noted the implication for the new product launch strategies are: to target a market where there is less committed people, secondly, targeting uncommitted consumer of existing brands to the best way to gain market share and lastly, differentiating uncommitted consumer from those who are involved and uninvolved about the brand choice and a different strategy of targeting them can yield better in the new product launch. Through the theory, how to make people have their own brand loyalty is an issue for company to have some unique branding strategies.

Cultural values in Taiwan, which has similar cultural background to the Mainland China, is very different from the Western countries can have very different marketing implications. As pointed out by Yau (2007) that Chinese way of life and values systems have particular implications for attributing product success or failure to fate rather to the manufacturer or reasons behind the facts.

Hence, the consumer may be more reluctant to complain about the performance of the products they have purchased (Yau, 2007). Since this study is to investigate the effects of new products launch on brand loyalty in the Taiwanese jewellery market factors, such as Chinese cultural marketing and behaviour implications such as “man-to-himself” and “situation” orientation needs to be taking into account in the evaluation of the new product launch strategy for a company.

The jewellery firm that will launch the new jewellery brand in Taiwan will have to make use of CRM strategies to enhance customer loyalty and maximize profits by adopting critical capabilities such as managing multiple channels of communication to capture customer interactions that could take place through call centres, e-mail, Internet portal or face-to-face contact.

The firm will also have to provide a unified viewpoint for customers throughout the value chains. The efficiency and quality of every customer interaction has to be improved and the usual customer queries can be addressed through self-service procedures. All the available information has to be analysed to make improvements in customer segmentation strategies, research and development abilities and marketing campaign management strategies.

Hiam (2001) had determined the following steps in the product positioning process, which is very relevant in the context of establishing brand loyalty for the new jewellery brand in Taiwan.

  • Identification of competitors
  • Singling out decision making attributes
  • Evaluation of decision making attribute
  • Identification of competitor position according to the most important attributes
  • Identification of consumer needs
  • Preparation of a consumer map
  • Selection of the desired position
  • Selection of positioning strategy

Traditional Approach to Brand Positioning

While discussing positioning of new jewelry brand in Taiwan it is beneficial to define the terminology. Al Ries and Jack Trout have pointed out in their influential work, Positioning, that “positioning is where the company wants its product to be placed in the customer’s mind so that it will achieve optimal utilization” (Trout and Ries, 1972).

Positioning is the basis for product marketing and the firm’s internal statement of objectives which provides information and leads to the establishment of the complete marketing communication framework of the firm. A positioning statement can be judged as efficient only if it holds strength against the objective performances of the product.

The positioning statement has to be exclusive in differentiating from other remedial options and in being of relevance and motivation to encourage a prescribing behavioral pattern amongst customers. It has been pointed out by Trout and Ries that “history shows that the first brand into the brain, on average, gets twice the long-term market share of the number 2 brand.

Almost all the material advantages accrue to the leader. In the absence of any strong reasons to the contrary, consumers probably will select the same brand for their next purchase as they selected for their last purchase” (Trout and Ries, 1972).

Presently the traditional approaches towards brand positioning relate to reaction statements of customers developed by the marketing teams of firms. Generally the first step in the process is pre-positioning which entails meetings amongst marketing teams and primary research that is conducted externally.

The main objective for such exercise is to establish a thorough knowledge of the areas in which the new product can be fitted and to commence with the development of promotional communication which serves as a means for the positioning concepts. Qualitative research helps a great deal in exposing customers to the product profiles as also the profiles of the main competitors. This way the firm gains clarification about the prevailing and possible competitive benefits provided by the new product (Sreekumar et al, 2009).



Due to the complexity in the model testing of new product development, it was necessary to conduct sampling survey with a selected group of respondents while conducting the market research. The survey method comprised of interviews and questionnaires the questionnaires were designed with 18 questions for different people and ages that were chosen at random amongst customers that visited high end departmental stores in Taipei in Taiwan.

The questionnaire included Yes/ No, multiple choices, and open questions. One hundred and twenty people were asked to complete the questionnaires from 6th of March 2010 to 26th of March 2010. From this data, it could be inferred how a successful Taiwanese jewellery brand can create an excellent brand image to attract customers who can demonstrate brand loyalty in repurchasing the jewellery on a consistent basis as regular customers.

The structure of the questionnaires was based on measurement of consumer’s commitment levels as proposed by Hofmeyr & Rice (1999) by asking the respondents to answer questions relating to the following:

  1. Rate the brands they use with a satisfaction scale
  2. Rate the importance of the brand choice with an ‘importance” scale
  3. Say whether they are learning toward or away from their brands
  4. Rate all the brands in terms of how they feel about them

In regard to new product launches, it is possible to relate consumers’ satisfaction levels along with their perceived value of the products to represent the purchase intention for a product or a brand. As pointed out by Selnes (1993) that satisfaction factor has significant influence over brand loyalty, many researchers have agreed that the success of a new product launch has significant bearing on the brand loyalty.

More specifically, for a new product, the consumers are likely to lean toward a brand that is trustworthy, satisfactory in meeting their aspirations and proves worthy for the money that is spent on it.

Thus, searching for relational factors such as satisfaction and perceived value would allow this research to infer the impact of a new product launch on brand loyalty; in other words, a strategy for the new product launch can be ascertained that maximizes the chance of success and enhancement of the brand image in helping the company to make more profit.


The sample group was 60 men and 60 women who walked into one of the jewellery floor of a department store in the city of Taipei, Taiwan.

The department store was chosen for the survey in view of its location and because there are many different jewellery brands, ranging from low-end priced brands to international well-established brands, available in the store that cater to all age ranges and occupations. The store is also visited by people who come as tourists from other countries. Hence, the diversified backgrounds of people allowed this research to gather a sample of population that was realistically representative of the consumers in Taiwan.

The study collected the primary data by interviewing each person individually and by taking the responses to the questionnaires that were distributed and collected after completion at the same time.

This strategy allowed the research team to avoid any questions raised by respondents to remain unanswered, which also enabled the survey to be accurate in terms of the responses to the questions that were placed before the respondents. The sample survey helped the research effort a great deal in building up the database for analyzing what elements influenced them to have brand loyalty for jewelry products.

The survey also had important implications in the context of:

  • Identifying areas where problems occur or where changes are required
  • Understanding why people behave in a certain manner and what can be done to provide alternate solutions to the problems
  • Understanding the relationships between different variables
  • Diagnosing or analyzing the situation rather than just describing the situation

Data gathered using the said instruments has been collated for analysis. Data analysis was primarily characterized by:

  • Comparative and statistical approach.
  • In being in line with the interview method that was conducted amongst the shoppers at the departmental store.
  • The gathered data from respondents in the departmental store has been analyzed.
  • A data analysis process has been developed to analyze all the responses.
  • The templates for data entry can be generated from questionnaires, and records can be checked, revised and manipulated.

The data results of the study were analyzed by determining their corresponding frequency, percentage and weighted mean. Different statistical procedures were used for this purpose.

The survey-questionnaire attempted to acquire the following information:

  • To acquire the demographic profile of the respondents,
  • Solicit attitude statements on different aspects of consumer aspirations in the context of jewellery.
  • Ascertain the purpose of the set of attitude statements and to determine the level of agreement or disagreement in the context of the present brand strategy of jewellers.

The questionnaire first required respondents to give specific demographic information such as name, age, gender, education and nationality.

A major effort was made to ascertain the relationship that customers had with specific jewellery stores and their reasons for choosing to visit the specific store. Attempts were also made to seek their suggestions about the extent to which their expectations were fulfilled and about their perceived shortcomings in the context of the jewellery products available in Taiwan.

The sample group was 60 men and 60 women chosen amongst customers that walked into the jewellery floor of a department store in the city of Taipei, Taiwan. The survey method used by the research team did not allow any question from the respondents to remain unanswered and the accuracy was maintained at the highest possible level.

This sample survey helped this research to build up the database for analyzing what elements could influence customers in demonstrating brand loyalty towards the new jewelry brand. The respondents were asked the following questions:

  1. What is your name
  2. What is your gender
  3. What is your nationality
  4. What is your education level
  5. How often do you visit this jewellery store
  6. Please give the names of the jewellery brands that you buy
  7. What is your favourite jewellery brand
  8. What are the main points that stand out when you buy jewellery
  9. Do you feel satisfied with the quality of jewellery available in Taiwan
  10. What in your opinion is the reason for making the choice in choosing your best brand.
  11. How often do you purchase jewellery
  12. While making jewellery purchases what is your prime consideration; latest fashion or the durability of the jewellery item.
  13. What in your opinion makes the best jewellery brand successful.
  14. Which cities in Taiwan would you like the world’s best jewellery brands to set up stores.
  15. Would you prefer to buy global jewellery brands or you would prefer to continue with locally established Taiwanese brands.
  16. Do you feel the Taiwan market has matured for sale of world class jewellery.
  17. What in your opinion is the basic condition for foreign luxury jewellery brands to introduce their products in Taiwan.
  18. What is your opinion about the success potential for such brands in Taiwan.


The demographic information pertaining to all the respondents was compiled and included in the data. Amongst the total respondents, 77 per cent were between the age of 21 to 35, 18 per cent were between the age of 36 to 50 and five per cent of those that were more than 50 years of age. 57 per cent of the respondents were male and 43 per cent were female.

Most of the respondents conveyed that they often visited the department store to make purchases in the context of their daily needs and sometimes stepped into the jewellery store to see if they could afford to buy items of their interest. Amongst female respondents, 64 percent responded in saying that they visited the store on a regular basis and presently they had come in order to see if there were some latest additions to the jewellery collection.

Upon being asked about their favourite brands of fine jewellery, 73 per cent of the females conveyed that they would prefer to buy foreign branded jewellery items because local brands were not of the latest technology or fashion. Most of the male customers said that they visited the jewellery shop in keeping with their interest to keep a watch on the latest trends and designs so that they could make plans for the investments and jewellery purchase for their families.

Female respondents were almost unanimous in responding that they would certainly prefer the entry of new global brands because it was in keeping with their taste for trendy and fashionable fine jewellery that was popular in Western countries. Young and working females between the age of 21 and 25 did not have a good opinion about local jewellery brands in view of their poor quality.

On being asked what were the main points that stand out when they make jewellery purchases 77 per cent of females responded in saying that their top priority was the unique design that had not been introduced in markets so far. Their next preference was the quality and price, which were dependent upon the brand and country of origin.

It appears that females are not very excited about making purchases of local jewellery. In view of the results that emerge from the survey it can be concluded that there are favourable circumstances for launching of new branded products in the jewellery market in Taiwan because customers are looking forward to new products and new brands that have the stamp and quality of globally successful brands.

While considering the issues that make the jewellery brand a success, respondents felt that quality, design and above all the brand are the most important considerations when they make jewellery purchases. Most customers were not satisfied with the quality of local jewellery in Taiwan.

This is perhaps because for decades Taiwan has been the centre of precious stones and domestically produced jewellery items that are made with traditional techniques and procedures. However 69 per cent of male respondents were not much concerned about jewellery items being imported from other countries because their primary objective in buying jewellery was for investment and for providing security.

Nevertheless, the jewellery sector in Taiwan is quite strong and has immense potential for growth and development if its designs and manufacturing processes can be altered in adopting the latest designing and manufacturing techniques.

It is evident that females comprise of the largest segment of jewellery customers in Taiwan and they need to be targeted appropriately to achieve success of a new brand. This can be possible only by creating brand loyalty in adopting appropriate measures of marketing strategy, segmentation and positioning.

Most of the female respondents were in favour of buying global jewellery brands and felt that the Taiwan market was now matured for sale of world class jewellery in view of the rising standards of living of the local population that has developed higher aspirations to have better quality products.

Obviously, fine jewellery cannot be left behind and Taiwanese people now feel that they also deserve to have the best products in terms of style, quality and satisfaction. They do not wish to be left behind in buying traditional jewellery designs when people across the world are buying trendy and fashionable designs.

Upon being asked about the strategy that should be adopted by foreign brands while making entry in the Taiwan market, respondents asserted that they should first prove their worth while attracting customers through low prices, better designs and higher rewards for making purchases of such brands.

This indicates that jewellery customers in Taiwan, especially women, are very wise and know how to extract the maximum values from their money. In other words, the respondents unconsciously implied that any jewellery brand that is launched in Taiwan will have to create an environment where by it spontaneously creates brand loyalty amongst the largest possible number of customers in the country.


Just as a product’s failure can result from changes in environmental factors and consumer tastes, a product can succeed due to the same reasons. A competitive environment which is favourable can lead the product to become a grand success.

Jewellery firms that wish to launch new brands should aim at developing new products that cater to specific requirement of the markets because a product can actually lead to creation of market demand instead of responding to it, under circumstances that are created by appropriate marketing segmentation techniques.

If the product is well aligned with the core competencies and the organization goals of the firm, it will receive a great deal of support from the market. The top management has a crucial role to play in supporting the product by marshalling the organization’s resources for effective implementation (Cachon and Terwiesch, 2006).

It is known that a major part of the branded jewellery and related materials in Taiwan come almost entirely from imports and thus any jewellery firm that wants to enter the market will have to be aware of the characteristics of the Taiwanese market in this regard. It is important to analyse and determine the circumstances that impact the jewellery market in the country.

Before launching a new jewellery brand the firm will have to ascertain if people in the country can afford the new product and whether the income of citizens is adequate in implementing such purchases. There are some legal barriers that have to be examined in the context of the extent to which the government permits and promotes the import of such products.

The competitive environment, potential customers, market size and the potential for demand have to be ascertained. It is known that the local fine jewellery industry in Taiwan is not very competitive and is facing extreme difficulties in surviving the competition from branded and imported fine jewellery that is of excellent quality, higher quality of precious stones and superior designing and craftsmanship.

However, it is also known that Taiwan is considered the largest centre in the world for processed semiprecious stones and the country’s facilities in this regard are well equipped with advanced processing and cutting procedures.

However, it should be kept in mind that new products usually fail due to the following reasons:

  • Overestimation of Market Size
  • Product Design Problems
  • Product Incorrectly Positioned, Priced or Advertised
  • Costs of Product Development
  • Competitive Actions

In order to create new products successfully, the jewellery firm must understand its customers, competitors and the markets as also develop products that provide immense value to customers. The development of new products goes through a process whereby ideas are generated, ideas are screened and the concept developed and tested. A suitable market strategy has to be framed which is then analyzed from the business perspective.

The next stage is of product development, test marketing and finally the product is commercialized. Krishnan and Ulrich have said about concept development that “decisions define not only the product specifications and the product’s basic physical configuration, but also the extended product offerings such as life-cycle services and after-sale supplies.

There are five basic decisions to be made. What are the target values of the product attributes? What will the product concept be? What variants of the product will be offered? What is the product architecture? And, what will be the overall physical form and industrial design of the product?” (Krishnan and Ulrich, 2001)

It should be kept in mind in the context of new jewellery brands that the development of a new product is marked by a process which evolves with its maturity and the growth of the firm. Under such circumstances the firm will have to be patient in watching the brand’s performance, which will improve in due course with the creation of brand loyalty for the same.

Success of the product is to some extent due to the constant readjustments and fine tuning of the changes in market demands and the gradual aging process with the evolvement of the product through its life cycles. The launch of the product is usually characterized with high start up costs and low sales initially since there is a heavy need of promotion to create awareness amongst customers and to enhance demand.

This period is considered to be short if the product’s pilot test was positive since the initial adaptors would have become familiar with the new product. The firm has to ensure that the institutional systems in the organization are ready for the ensuing phase of growth which will put pressure on the firm (Kotler, 1997).

The growth phase of the jewellery brand is characterized with increased sales, reduction in average costs and the first stage of profits. Market penetration is a phase that needs a lot of marketing efforts in maintaining volumes and reducing costs per customer in order to get maximum profits. The product then gets fully integrated as a regular product of the firm and the firm starts the identification of cross selling prospects with other products.

This is the right time to thing about establishing brand loyalty amongst customers. As the track record of the product develops new competitors enter the field and the firm has to make further efforts in identifying potential consumers and in implementing incentive schemes to reward staff for getting new customers. Additionally, the firm has to conduct more market research and initiate added publicity campaigns. In order to successfully position a new product the firm has to keep track of the following:

  • Solicit client feedback throughout the process to continually refine the product.
  • Expect problems to arise along the way.
  • Generate institutional buy-in early and continually throughout the product development process
  • Test the product in actual market settings and expand slowly.
  • Make realistic cost revenue projections to prepare for the financial impact of adding another product.
  • Make sure systems have sufficient capacity and flexibility to manage and track new products.
  • Provide appropriate training and incentives to staff to ensure effective implementation.
  • Cancel the project if external or internal conditions are not conducive to new products.
  • Identify a product champion who will maintain momentum throughout the development process.
  • Create a client-centred institution.

While making plans for launching new products it is required to make forecasts and in making forecasts innumerable possibilities are considered. One of them is to assume that business circumstances will remain the same and another could be the assumption that the economy may witness some level of recession thus making the business to suffer a little.

There is an element of chance or likelihood for every possibility and when the firm takes into account all possible results, such probabilities should ideally sum up to unity. Every possible result for the firm is indicative of certain aspects of business such as the fact that if there is some level of recession in the economy the firm will have a decline in its sales.

Once the combined outcomes are analyzed, an average or expected value in terms of future sales is derived. Such approaches need to be elaborated and analyzed. After the sales figures are forecasted the firm has to make forecasts about cash flow statements, balance sheets and income statements for the entire period under consideration.

This will enable the firm to have an estimate of its profits, requirement of equipments and the needs for capital and liquidity. Unless the firm has this information it will run immense risks of ruining the business in terms of losing suppliers and consumers (McCarthy and Perreault, 1993).

There are several tools that assist firms in understanding perceptions which have a bearing on purchase decisions that lead to the creation of brand loyalty. Perceptual map is a visual arrangement and a means to portray the diverse options available to firms while positioning products.

Marketing teams have the option to develop perceptual maps from data obtained through marketing research in order to locate customer needs which have not yet been realized. For instance, consumers can be asked to rank jewellery items on elements pertaining to design, quality, durability and appearance.

These four qualities can be merged to form perceptual dimensions such as utility and technical. All brands of jewellery available in the market are incorporated in the data in keeping with the preference ranks given by consumers. If the results indicate that a large number of jewellery firms focused upon the specific characteristics of the product, there is added potential for new firms to emphasize on the ease of use and provision of better services.

There are a number of positioning options that can be availed of by firms in creating an exclusive market environment that favours the creation of brand loyalty for jewellery products in Taiwan. One of them is quality emphasis whereby production is made to become free of any defects while customer service and product designs are made to meet or exceed consumer expectations.

An alternative option for marketing teams is to offer exclusive features and advantages which customers do not find with other competing products, which can vary from unique styles to production that is environmental friendly. Usually these exclusive features are a result of the firm’s unique resources in having competitive advantages in the market place.

This aspect creates difficulties for the firm’s competitors in matching the unique benefits and features due to the enhanced costs resulting on adding the same features to their products.

In this context, Urban and Star have observed that “if we develop a unique competitive advantage on a dimension of importance to a significant portion of the market, we can enjoy a substantial share and high margins,” (Urban and Star, 1991). However innovations and marketing research have to be carried out on a consistent basis in maintaining such competitive advantages.


A few decades ago brand loyalty was considered a simplistic concept for creation amongst customers and was a popular term amongst marketing professionals in the areas of promotion ad advertising. It is still a commonly used term in marketing literature. But the concept is difficult to conceptualize and involves a number of different interpretations.

The objective of this paper has been to explore the different ideas of brand loyalty in the context of new product launches in the jewellery sector in Taiwan, especially in the context of new products and to ascertain the new developments in the concept. Internal positioning, external positioning, positioning for social accountability, positioning with ideas and head on positioning are some of the variants that have a strong bearing on the creation of brand loyalty.

There are a large number of efficient elements of marketing strategies that are embodied in the over all concept of brand loyalty. Most of them are connected quite closely to the promotional and advertisement positions of the marketing mix. Hence brand loyalty cannot be said to be an entirely new or revolutionary concept for marketing strategies.

As this paper has proposed and demonstrated, the present marketing research methodologies used by majority of the companies in ascertaining their ideal brand positioning in the jewellery sector are not efficient and do not allow the development of actual and aspiring themes for creating brand loyalty. Perhaps this is due to the fact that potential customers are made to consider the characteristics of the products from the firm’s perspectives and the marketing strategies do not exhaustively address the aspirations of customers.

Positioning plays a major role in creating brand loyalty and the desired impact in the minds of present and potential customers. Most marketing professionals view positioning of products as an arrangement whereby a product occupies a specific, desirable and distinct place in the mind set of target consumers in relation to the products competing in the same market segment.

The position of a product is ascertained by the manner in which customers view the features of the product in correspondence to the features of the competing products.

Product positioning cannot be separated from segmentation and customer targeting and if there are faults in these two processes, product positioning will not succeed.

A combined conclusion can be drawn from the opinion of different scholars in the field, in saying that product positioning is a complicated and continuous chain process. While executing positioning plans firms have to follow specific marketing steps.

The use of brand loyalty strategies has been made from the days when firms had to operate in intensely competitive markets where products competed to grab the maximum share of the market. Innovation of products has conventionally been carried out with the advent of new ideas and the concept of social accountability. It is however not intended to mention that concepts of positioning are not useful in creation of brand loyalty.

They are actually valuable conceptual vehicles that are utilized meaningfully to frame strategic techniques that are more productive and efficient. Market research activities enable a meaningful and deeper sense of knowledge about the product as a company frames its positioning strategies.

However positioning is not a static exercise and although a positioning statement may be relevant for some time, clear signs develop when the time comes to reposition. Such signs pertain to reducing sales, new entrants in the competitive environment, shifts in the markets, new procedures and change in the treatment paradigms.

Nevertheless, as firms gain experience they become prepared in shifting gears at the opportune time in creating higher levels of utilities and providing better services to their clients in order to create brand loyalty. It is required to keep watch and conduct regular checking which improves and proves to be informative in regard to the available marketing decisions and choices.

For firms that are launching new products in the jewellery market in Taiwan It is thus important to have knowledge about the different levels of importance placed by consumers to specific brands in the context of democratic and national perceptions. There is need to have adaptation and summaries in the context of strong academic structures that are aligned with realistic issues pertaining to brand purchases.

The firms stand to gain in having detailed action plans that offer examples and strategies pertaining to more innovations and efficient marketing campaigns. It is known that, almost half the consumers recognize that there is a lot of choice available to them while making purchase decisions.

However customers also understand that they have to be open-minded in trying new experiences with new products. Brand loyalty increases with age, and the purchase process is driven in being influenced by the introduction of new products by the same company. On the one side, experimental and promiscuous customers get encouraged to try new products, while customers that are hard pressed for time have no choice but to continue buying their trusted brands.

The new jewellery brand has to tap this segment of customers that are open in trying out new brands. In the light of the findings of this research paper, it is evident that branded and imported fine jewellery dominates the local Taiwan market and industry experts have estimated that fine jewellery imports will continue to increase consistently in the coming few years.

The ultimate measure of brand loyalty in the jewellery sector is not the repurchasing pattern for any product because customers can be influenced in other ways such as the absence of alternatives for the given product. But this is not so in the jewellery industry where brand loyalty implies different strategies and becomes possible when companies successfully create emotional attachments for customers with their brands.

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