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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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  • Number of pages: 2

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According to Neumeier S (2005), brand as an idea has been around at least 5000 years. However, over the recent years, the importance of brand has gained significant importance because our society has shifted from an economy of mass production to an economy of mass customization. Consumers now have increasing purchasing choices and have become information rich and time poor. As a result, conventional methods such as comparing the products quality and benefit for the company- no longer works. Additionally Todor, Raluca-Dania (2014) also points out that product quality or services alone does not guarantee success for a company and that branding efforts is not an option but a necessity in order to obtain profit.

While previous researches have well documented in its marketing literature the importance of branding and its growing significance over the years, according to (Aaker, 1991) marketers have long been interested in the concept of brand loyalty since it constructs the measure of attachment that a consumer has with the brand. According to Sahin, Zehir & Kitapçı (2011), Brand loyalty is an essential component of a company's business strategy and its success. In fact according to V.Kumar, Denish shah (2004) profitability is linked with sustaining brand loyalty amongst customers. According to Woods (1995), one Delta Airlines' lifetime customer generates $1.5 billion. Additionally Reichheld, in his book, The Loyalty Effect, argues that “In businesses like auto and life insurance and credit card firms, attracting new customers often costs approximately five times what it costs to retain current customers. If companies knew how much it really costs to replace customers, they would make more investments to retain them”. While ‘‘a lot of research in marketing attempts to find the antecedents of brand loyalty, and amongst the significant predictors are customer satisfaction, trust and the view towards the brand'' (Fornell, 1992; Anderson and Sullivan, 1993), limited research has been conducted to study the impact on brand loyalty for inter city travel industry in an emerging market segment. While one of the studies conducted by Tho D. Nguyen, Nigel J. Barrett, Kenneth E. Miller, (2011) does focuses on brand loyalty for emerging markets, the research however only uncovers the relationship between brand awareness and perceived quality and its impact on brand loyalty limited to Thailand and Vietnam market. Additional research conducted by researchers such as Jumiati Sasmita, Norazah Mohd Suki, (2015) and Pedro Marcelo Torres, Mário Gomes Augusto, João Veríssimo Lisboa, (2015) highlight the relationship between brand awareness and brand equity in which they uncover insights that brand awareness predominantly affects brand equity among young consumers and that positive effects of brand awareness on brand equity is mediated by brand loyalty. While Aaker (1991), points out that the first step toward loyalty begins with the customer's becoming aware of the product, validation of the positive relationship between brand awareness and brand loyalty in a travel industry amongst millenials in an emerging market is yet to be tested. Moreover apart from brand awareness, academic research on the relationship between the identified key brand drivers for the travel industry - Brand Trust, Brand Advocacy, Brand Usage and its impact on brand loyalty is limited. Many scholars have however reviewed the link between brand trust and brand loyalty , they revealed that the most important antecedent to brand loyalty is trust (Aydin & Özer 2005; Dehdashti, Kenari & Bakhshizadeh 2012). Scholars have also demonstrated that trust is critical while creating brand loyalty (Morgan & Hunt 1994). Others indicated that brand trust is a key determinant of attitudinal loyalty and behavioural loyalty (Chaudhuri & Holbrook 2001). While impact of brand trust on loyalty has been studied, the lack of studies on the mediating effects of brand trust in the travel industry highlights a potential gap that this research aims to study.

Finally, even though academicians such as Steven Pike, (2005) and Mustafa Tepeci, (1999) “point out the importance of building brand loyal customers in a matured hospitality industry and the complexity of branding in tourism industry”, academic literature in the hospitality industry is largely dominated by specific sub industries and on the technological or digital impact in the hospitality industry. For instance, a study by Xiang (Robert) Li & James F. Petrick (2008) highlights the dimensionality of brand loyalty for a cruise industry and the study conducted by Youjae Yi and Hoseong Jeon (2003) points out how information technology would change the hospitality industry in order to meet customer needs. Addressing this scope of further research, this study extends prior literature through the development of a theoretical framework that measures the impact that key brand drivers for the inter city travel industry has on brand loyalty. Further, this research focuses on one of the emerging markets, India by studying the inter city travel of the Indian millennial segment.

Why is this research important?

According to the World Travel & Tourism Council (2015), global tourism generated $7.6 trillion for the global GDP in 2014, making it one the world's fastest growing and largest sectors. The tourism industry has also become the 4th largest export industry after fuels, Chemicals and food (Tugcu, 2014; Balli, Curry & Balli, 2015). In addition to exports, the study by Ramphul Ohlan (2017) indicates that inbound tourism spurs economic growth in India both in the long & short run and that tourism, economic growth and financial development are cointegrated.

While, according to S Medik (2003) “all tourism includes some travel but all travel includes tourism”, the travel industry itself is booming: according to economic impact research by WTTC (2017) states that the global travel industry grew 4.6% faster than global economy as a whole at 3%. WTTC (2018) also asserts that Indian travel industry is expected to grow by up to 11%-11.5% generating $48 billion by 2020. With rapid growth and as the 7th largest market in travel industry, India forecasts to add 10 million jobs and hundreds of millions of dollars to the economy by 2028, WTTC (2018). Additionally, according to the Economic Times (2017), India is the tenth largest travel market for business and the travel spending for business is expected to grow at a compound annual growth rate of 12% until 2020 and 6% until 2030.

Additionally the millenials market in India has proven to be an important segment for brands. According to the Morgan Stanley report (2017), India will have 410 million millennials, who will spend $330 billion annually, by 2020. That's more than the total population of the US, and more than the total number of millennials (400 million) that China has today. Naturally, every brand owner wants a slice of this pie. The millennial travel survey (2017) conducted by skyscanner showcased that 62% of Indian Millennials typically take a vacation two to five times in a year with 10% of them stating that they travel between 6 to 10 times a year in a combination of shorter breaks to domestic travel and longer international destination. The study goes on to emphasise that majority of Indian Millennials, about 86%, pay more for convenience of flight schedule irrespective of cost. Additionally most of the millennials prefer solo trips, about 31%,  and spend time on activities and experiences, about 53%,  as opposed to food and drinks, shopping and accommodation.

Finally, lack of research has been conducted in the intercity travel space in the Indian market.

With increasing demand and scope in the travel segment amongst the Indian Millennials, this paper aims to uncover the impact of each brand driver on the brand loyalty. This would then help Indian marketiers across different transportation mode: bus, train and plane to evaluate what drivers are most important to build Brand loyalty and thereby effectively channelize their marketing efforts.

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