The higher the number of perceived service alternatives the: A) ...

[JGIBBSON]

The higher the number of perceived service alternatives the:
 A) higher the level of adequate service expectations.
  B) lower the level of adequate service expectations.
  C) more narrow the zone of tolerance.
  D) higher the level of adequate service expectations and the more narrow the zone of tolerance.
  E) lower the level of adequate service expectations and the more narrow the zone of tolerance.

Question 2

Compare and contrast brand loyalty and brand equity, as well as how these concepts are related. Must a brand possess high brand loyalty in order to possess high brand equity? Explain.

[Viet Thy]

Answer to Question 1

D

Answer to Question 2

Brand loyalty is a positive attitude toward a brand that causes customers to have a consistent preference for that brand over all other competing brands in a product category. There are three degrees of brand loyalty: brand recognition, brand preference, and brand insistence. Brand recognition exists when a customer knows about the brand and is considering it as one of several alternatives in the evoked set. This is the lowest form of brand loyalty and exists mainly due to the awareness of the brand rather than a strong desire to buy the brand. Brand preference is a stronger degree of brand loyalty where a customer prefers one brand to competitive brands and will usually purchase this brand if it is available. Brand insistence, the strongest degree of brand loyalty, occurs when customers will go out of their way to find the brand and will accept no substitute. Customers who are brand insistent will expend a great deal of time and effort to locate and purchase their favorite brand.

The value of a brand is often referred to as brand equity. Another way of looking at brand equity is the marketing and financial value associated with a brand's position in the marketplace. Brand equity stems from four elements: brand awareness, brand loyalty, brand quality, and brand attributes. Brand awareness and brand loyalty increase customer familiarity with a brand. Customers familiar or comfortable with a specific brand are more likely to consider the brand when making a purchase. When this familiarity is combined with a high degree of brand quality, the inherent risk in purchasing the brand decreases dramatically. Brand associations include the brand's image, attributes, or benefits that either directly or indirectly give the brand a certain personality.

Although brand loyalty is only one part of brand equity, it is hard to imagine that a brand could have high equity without high brand loyalty. This is especially true with respect to brands that enjoy high brand insistence. These brands are so vital to customers that they will expend great time and effort to acquire them. As a result, the marketing and financial value associated with these brands is likely to be very high-resulting in high brand equity.