6. Conclusions and implications
Because loyal customers are less sensitive to price, brand-loyal car owners are desirable for firms in most industries. In the automotive industry, the level of brand loyalty has mostly been revealed by attitudinal studies; that is, statements from customers on intended repurchase behaviour. Such information is related to uncertainty that is often found in stated preference studies due to customers having an agenda (tactical answering) or in which they do not have complete information on future behaviour (e.g., Sheeran, 2005; Solvoll, 1994). In this article, we study brand loyalty among Norwegian car owners using empirical data on approximately 35,000 car changes in Norway from 1985 to 2013. In contrast to earlier studies on loyalty within this industry that aimed to reveal customer attitudes, our data examine the actual behaviour.
This article addresses two types of brand loyalty: first, a strict version that includes only repurchases of the same brand (consecutive purchases) (P); second, a wider definition includes customers purchasing a brand they have owned at least once in the previous three car ownerships (returning customers) (Q). The last measure is often denoted as an unstable loyalty measure. In the Norwegian data set, the average brand loyalty is 26.4% for the first strict definition and 36.7% for the second wider definition. The prevalent brands seem to have higher loyalty among customers, with the best scores for Toyota, Opel (Vauxhall) and Ford.
The characteristics of brand loyalty in the Norwegian automobile industry are studied in more detail using a logit model. It is clear that older customers and males are more loyal than their counterparts. In contrast, the age of vehicle and low frequency of car changes is related to lower loyalty. The model gives some mixed results regarding the influence of location on loyalty (living in Oslo) and its development over time. The first indicator (P) shows no significant influence of location, whereas loyalty decreased over time. The other loyalty indicator (Q), by contrast, shows significantly the lowest loyalty in Oslo and increasing loyalty over time. Both loyalty measures show, however, moderate annual changes during the period in question.