Question

(1) Select a service offering.

(2) Discuss the reasons why personal sources of information are more important for the consumer of the selected service offering.

(3). How, if at all, do the sources of personal information affect brand loyalty of a service offering? Feel free to discuss a specific example to support your position.

Answer 1

The service selected is a herbal massage therapy using oriental oils.

The personal sources are more preferred by the consumers of this service because a positive endorsement assures them of quality, reliability and cost worthiness of the service. The most distinguishing feature of the personal sources are that they have no vested interests in the business of the service provider and the reviews and information is usually based on the own experience and are unbiased. The other benefit is that the review is up to date. Given the nature of the service, listening straight from the horse's mouth is what a potential customer wants, and there is no better person than the one who has just availed it.

The information from personal sources is based on their own experiences with the service provider and the it is in form of an endorsement and is direct consequence of brand loyalty of the information provider. However, if the receiver of the information already has brand loyalty to other service provider, he /she might like to give the new company a chance only when he /she finds a scope of improvement in the service offered by his previous brand to which he /she is loyal. For die hard fans, who have strong brand loyalty, even the personal information does hardly matter, and in such cases, the personal information does not affect brand loyalty. It also depends on the cost of shifting and ease of coming back to older brand.

An example is Apple's iPhone. The die hard Apple users might settle for some less features as compared to a feature laden Chinese handset, even if it is recommended by their close aids, because of their strong brand loyalty. However, someone with a brand loyalty for McDonalds would not mind to try a competitors's product with new features if endorsed by a friend.