The Power of Brand Loyalty in Creating Enterprise Value

Introduction

Brand is an aggregate of concepts that represent an organization. The concept of the brand is inclusive of all details product quality, its association that rings in people’s minds, characteristics of the target market, the identity of the company, and consumers addressed (Cop and Bas, 2010). In order for a brand to be different from its competitors, a number of elements are used, namely, a symbol, a logo, a slogan, brand identity, brand personality etc. In addition, after utilizing these elements, institutional reputation management takes its turn to impress the attitudes and behaviors of the internal and external target markets and distinguish the brand from its competitors. Institutional reputation is of great importance for organizations. The mass of inner market is also the potential customers. A strong organization and brand reputation in the eyes of employees will enable the company to reach the external target market because a healthy internal communication will result in happy employees. This happiness, then, finds its way to external stakeholders through word of mouth. So, both the internal and external stakeholders will contribute to the reputation and image of the organization in the eyes of the target market.

In their communication with the external target market, companies strive to draw the target market’s attention in terms of how the companies, their activities, and the quality of their product services are viewed from outside. Therefore, anything that serves to improve company reputation will contribute positively to the company image. This, in turn, will lead to the provision of brand loyalty. Institutional reputation, in a nutshell, is defined as a general opinion, fame, good name, esteem and the like that are formed as a result of superiorities or deficiencies of a person, group, organization, institution, and company (Unlu, 2015). In addition, institutional reputation is the reward for being a company “liked and admired” by society. This is why companies are organizing activities to reinforce and strengthen their institutional reputation. Those companies which are aware of the importance of institutional reputation are always one step ahead of others, which is why they always act in a coordinated and planned way because institutional reputation is a serious issue and it should not be done otherwise. That the company has a strong reputation creates a positive image in the internal and external target groups. It increases the trust felt for the brand.

An increase in the reputation of the company and the brand helps build brand loyalty in customers because customers always prefer a brand or a company that is reputable, well-known, and reliable. Building and growing loyalty benefit the company financially, too. To mention brand loyalty briefly, one can define it as the intention to buy, to be willing to pay more, and to recommend the brand to those around them. As far as this definition is concerned, it is the interest shown by customers to the brand or company. It can also be called as a connection that is formed between the two parties in time. Customers and brands are attached toward each other emotionally, and customers redesign their lifestyle on the basis of features assigned to their brand.