1. Brand Loyalty and Customer Retention: A Case Study
on Bata India Ltd
Arijit Basu*,
Abstract
World today is facing a new period of transition; an evitable change that challenges all concepts
and beliefs of today. Its, “We” who are changing dramatically! The middle class and snobbish
thinking are all eradicating, and the most affected sector due to this is the “Organized retail
sector”. Organized retail is growing at a rapid pace in India. Although Indian market is very large
and seems promising, but organized retailers are finding it tough to be profitable. Somehow or
the other they are not getting their basics correct. They often tend to forget “it costs five times
more to attract a new customer than to retain one”. In the age of – integrated marketing
communications, relationship marketing and branding every transaction; “Life Style Retailing” is
the new concept. With open economy in full action, Indian soil is full of opportunities and
competition keeps on increasing. This study focuses on finding out the most innate relationship
between “Customer Retention and Brand Loyalty”. Hence the plot weaves the relationship
between “Factors that influence customers intention to continue purchasing from a particular
organization” and “psychology that conceptualizes human personality and emotionally makes
one brand loyal”. All this takes place with the backdrop of a very popular multinational footwear
brand. Here footwear is considered to ascertain the topic’s homogeneity in terms of – new to this
genre, for this subject is never exploited in the findings of footwear industry before anywhere in
the world.
Keywords: Brand Loyalty, Customer Retention, Excitement, Loyalty Incentives, Customer
Empowerment.
Arijit Basu*,
PGDM, Regional College of Management Autonomous, Bhubaneswar
Email id: arijit_bs@yahoo.co.in,

2. Introduction
Brand differentiation is now becoming an important tactic for combating competition in the
hostile marketplace. A viable solution for establishing the distinctiveness of a brand is through
brand personality. Attaching personalities to brands contributes to a differentiating brand
identity, which can make brands more desirable to the consumer. Jennifer Aaker developed a
specialized brand personality scale, the five dimensions of the scale being sincerity, excitement,
competence, sophistication, and ruggedness.
In this empirical study, an attempt is made to understand the relationship between brand
personality dimensions and brand loyalty. A popular clothing brand in India is examined to test
the impact of its brand personality dimensions on brand loyalty.
“It is said to costs five times more to attract a new customer than to retain one”
Retention is clearly action-oriented. Yet most customers’ service management and customer
service measurement, no matter how comprehensive is constructed around achieving the highest
levels of satisfaction, not retention.
So, in this study, an attempt is made to study the importance of customer retention management.
Structure of World Footwear Industry: Global Consumption.
It is axiomatic to say globally, the footwear industry has an expanding market. World
population increasing, living standards getting elevated, rapid urbanization becoming the demand
driver of the footwear industry.
GLOBAL FOOTWEAR CONSUMPTION
Table 1
Region Millions of Pairs % of Total
China 2,768 22.20
Asia (excluding China) 2,706 21.70
Europe (all) 2,544 20.40
North and Central America 2,381 19.10
Middle East, Africa, 1,172 9.40
Oceania
South America 898 7.20
Total 12,469 100

3. Bata as a Brand
The Bata Shoe Organisation was founded in August 1894 by, Tomas Bata, in Zlin, a small town
in the erstwhile nation of Czechoslovakia.
In less than two decades, this company was identified in expertise in mass
manufacturing of footwear
Today, it is the undisputed global leader in the footwear industry with its products
having a significant share in the World Shoe Market.
In January 1934 it acquired a plot of 155 acres from the Calcutta Port Trust and
from adjacent landowners.
Bata India Limited has established itself as one of Asia’s largest footwear retailer.
It has cornered a 35% market share in the organized sector and 8.5% of the total
footwear market.
About 95% of the company’s revenue came from domestic sales and the rest from
exports.
Bata India currently sells over 45 million pairs of shoes every year and has an
annual sales turnover of more than Rs 800 crore (U.S $ 180 million.)
In Bata, new collections and designs are built regularly with a focus on global, regional and
local fashion trends. The emphasis is on introducing exciting products, which are comfortable,
competitively priced and provide customers “Value for Money”.
LITERATURE REVIEW
Organized retailers have of late realized the potential of customer retention and targeting the
quality conscious and convenience-seeking people. These customers have more disposable
income, and seeking greater convenience, better service, wider assortment and most importantly
– all of these at competitive prices. As a result, various organized retailers are following the suit
of diversification, uniqueness and strategies to gain a competitive edge by skillfully managing
their POD and POP.
According to study of Telang et al. (2007) they found out that convenience, enjoyment and price
are the three important factors that motivate customers to purchase from an organized retail
store. Convenience is defined as a customer’s perception of savings in time and effort, related to
transactions with a vendor ( Berry et al 2002). Enjoyment is defined as the extent to which the
activity of purchasing from an organized retail store is perceived to be enjoyable in its own right.
It encompasses loyalty incentives and henceforth determines the continuous purchasing

4. intention. Perceived price is defined as a customer’s subjective perception of the observed price,
compared to the reference price.
To examine how the relationship between brand and human personality may drive preference,
Aaker (1997) indicates that two types of brand personality scales can be used. The first type is ad
hoc scales, typically composed of a set of traits ranging from 20 to 300 in number. However,
though useful, these scales tend not to be theoretical in nature often having been developed for
the purposes of a specific research study. As a result, key traits may be missing from such scales.
Furthermore, the traits that are selected often are chosen arbitrarily, which casts doubt upon the
scales’ reliability and validity. The second type of brand personality scales are those that are
more theoretical in nature, but are based on human personality scales that have not been
validated in the context of brands (e.g., Bellenger et al., 1976; Dolich, 1969 as cited in Aaker,
1997). Some dimensions (or factors) of human personality may be mirrored in brands whilst
others might not. As a result, the validity of such brand personality scales often is questionable,
leading researchers to argue that “if unequivocal results are to emerge (in the literature on the
symbolic used of brands) consumer behaviour researchers must develop their own definitions
and design their own instruments to measure the personality variables that go into the purchase
decision” (italics in original, Kassarjian 1971). It was against this setting that Aaker (1997)
developed a brand personality scale by isolating these distinct dimensions, further treating brand
personality as a ‘unidimensional construct’ and demonstrating how different types of brand
personalities can be distinguished. This has resulted in the perception that there are multiple
ways in which the brand personality constructs can influence a consumer’s preference, and has
provided investigators with tools so that these may be better understood
Brand
Brand is well associated with the word “Brand Equity” today. Brand is nothing, but the value
added on products and services – reflected in a way that consumers think, feel, and act with
respect to the brand. Consists of – a name, term, symbol, or design or group of them to give them
a uniqueness in status and differentiating from the competitors.
Research Methodology
The survey method was used for this study. The data was collected from 12 retail stores of Bata
located throughout Kolkata City. From the 12 Flagship Stores of Bata which we have visited the
following qualitative Analysis can be done on the pretext of Customer Interviews and Store
Manager’s view points.

5. BRAND LOYALTY
The success of most business is dependant on creation of loyal customers. Selling to brand loyal
customers is far less costly than creating new customers because finding a customer in a first
place is a costly affair whereas loyal customers can act as ambassadors for the company by the
“word of mouth” system. There is a strong correlation between “likely to recommend” and
“customer loyalty” towards the brand. There can be no greater measure of loyalty than a satisfied
customer who says “I strongly recommend you to buy this brand”. In addition brand loyalty
provides firms with strong competitive weapons. Brand loyal consumers are less price sensitive.
Loyalty reduces sensitivity of consumers to marketplace offerings, which gives the firm time to
respond to competitive moves (Aaker 1991).
PARAMETERS TO MEASURE BRAND LOYALTY:-
Sincerity: It is defined as genuine, fully oriented and committedness and trustworthiness. This
relationship is similar to one that exists between a teacher and his sincere student. If an
individual feels the brand is tailor-made to suit his/her personality and is satisfied by the
performance of the same the individual becomes loyal to the brand.
Hypothesis 1 (H1): “Sincerity”- the brand personality parameter lead to Brand Loyalty.
Excitement: Excitement refers to free-spirited, young, enthusiastic attitude and outgoing
personality. If an individual associate himself/herself with such characteristics then he/she will
associate with such brands that will fulfill such characteristic.
Hypothesis 2 (H 2): “Excitement”- the brand personality parameter lead to Brand Loyalty.
Competence: It manifests the expertise power of the individuals’ personality. If an individual is
competent, people rely on him/her on the basis of his/her competence.
Hypothesis 3 (H 3): “Competence”- brand personality parameter will lead to brand loyalty.
Relationship Length: Loyalty grows over time, as the customer gets familiar with the product. The
customer would have got positive experiences with the product, which might also be the reason
why the customer buys the product again. If the customer’s relationship length is higher, it shows
that the customer is loyal. Hence, length of relationship will also have impact on brand loyalty
Hypothesis 4 (H 4): Relationship Length will increase brand loyalty.
CUSTOMER RETENTION
Why customers are more important for any business over a period of time? There are number
of reasons for this. To begin with, to acquire a customer a company incurs promotional costs
like advertising, sales promotion etc. It is said that “it costs five times more to attract a new
customer than retaining one”. The operating cost decreases when a customer stays. Services
being rich in experience and credence qualities, it takes some time for customers to get

6. accustomed to it and once they are used to the product and are satisfied with the service
provider ,they tend to purchase more over a period of time.
Considering the importance of retaining customers in footwear business, Reichheld & Sasser
coined a term ‘Zero Defection’. They highlighted that companies can boost profits by almost
100% by retaining just 5% more of their customers. Further, it is also very important to
understand the life time value of a customer. Further, if by a positive word of mouth, he
brings just one more customer to the organization, his value to the organization doubles.
Therefore, it is important for all the employees in the organization to understand the life time
value of their customers. Once they understand it, they will treat the customer accordingly and
will focus on building relationship with the very people who keep them in business.
PARAMETERS TO MEASURE CUSTOMER RETENTION PHILOSOPHY:-
Continuance Intention: The basic motive of a rational customer is to seek benefits from
purchase of a particular product. If he/she is particularly satisfied with the experience with the
product; then there is basically a point of trust established. Hence he continues to satisfy that
particular need of that particular product from that organization only.
Hypothesis 5 (H 5): Continued patronage leads to customer retention.
Loyalty Incentives: Loyalty incentives or “Customer Based Relation Maintenance” is the
new mantra of today’s retail marketing. Considering factors like – Product Life Cycle,
Competition, Sales Maximization etc. forces organized retail sector to allow attractive
discounts to attract all kinds of customers. Like Pantaloons, “Green Card” concept and
Sreeleathers, “Bonus Points for Rewards” not only helps to make or attract new and old
customers but also have a valuable customer data base; that helps an organization to learn
about customer demographics and changes over time.
Hypothesis 6 (H 6) : Loyalty incentives are positively related to customer retention strategy.
Value for Price: Customers prefer to conduct such transactions with vendors whose products
offer maximum value. Customers evaluate different prospects based on the value of each
prospect. Particularly, they weigh the value of each purchase in order to continue purchasing
from a particular vendor. Empirical results (e.g.; Zeithaml, 1988; and Dodds et al., 1991) also
support the view that “Perceived value leads to customer intention to continue purchasing from
an organized footwear manufacturer.
Hypothesis 7 ( H7 ): Perceived value positively influences customer intention to continue purchasing
from organized retail stores.
Convenience: Convenience is defined as a customer’s perception of savings in time and effort
related to transactions with a vendor (Berry,2002). Convenience is one of the most important
benefits of shopping from an organized retail store (Telang ;2007). It finally helps in proper
utilization of mental and physical energy expended in buying. Hence all these factors together
increase value in purchasing from an organized store.

7. Hypothesis 8 (H 8): Convenience positively influences customer intention in purchasing from particular
vendor.
Hence, these are the important factors considered in the study. The hypothesis is aptly defined where
we wish to prove that :- “Brand Loyalty incremental strategies helps in customer retention / Customer
retention management increases brand loyalty”.
Research Model – Hypothesis Flow Chart
.
Thus, this is how we formulate our goal – which we prove by both qualitative and
quantitative findings.

8. Data Collection
The empirical data was collected from Flagship store over a week. With due permission from
the owners of the store, the data was collected through mall intercept survey method. We
collected 210 valid responses via the questionnaire survey. For this specific study a
Questionnaire was designed which would fulfill the criterion required for our study. The
questionnaire was a Personally Administered Questionnaire. The Questionnaire was designed
to study the Brand Loyalty and Customer Retention Management of Bata India Limited. The
table shows the demographic characteristics of the customers.
Questions included in the Questionnaire are closed-ended questions. The entire questionnaire
was designed with the aid of a 5 scale method to suit the statistical analysis used in the project.
Thus these were the findings from the 12 store visit in Kolkata for the qualitative analysis of
the topic. These are the suggestions and findings from the “Customer” survey conducted through
specific questionnaire.
Quantitative Analysis
This part of the research deals with the questionnaire analysis through SPSS 17.0. The sample
size collected for the study is 210. Further study reveals the characteristics of the consumer
psychology.
Descriptive Analysis
This study is carried out to find whether the data is normally distributed or not. This is carried
out with the help of “Frequency Study”.
Table 2 : Characteristics of Respondents
Particulars Frequency Percent
Gender
Male 132 62.90
Female 78 37.10
Age
0 – 20 18 8.60
20 – 30 162 77.10
30 - 40 15 7.10
41 and above 15 7.10
Education
No formal Education 9 4.30
Matriculate 3 1.40
College level 84 40.00
Post graduate 75 35.70
Professional education 39 18.60

9. Marital Status
Married 39 18.60
Single 171 81.40
Family Size
0-3 66 31.40
4-6 108 51.40
6-10 30 14.30
10 & above 6 2.90
Monthly Income
Less than Rs 10000 60 28.60
Rs 10000 - 15000 99 47.10
15000 - 20000 36 17.10
More than 25000 15 07.10
Occupation
Student 102 48.60
Service 90 42.90
Business 3 1.40
Others 15 7.1
Here we have our vital frequency distribution – showing all vital information required for the
statistical analysis.
Reliability Analysis
The reliability of each scale was assed via ‘item to total correlation (a method used to understand
the reliability of a particular measure wherein the responses of individual item in the measure
and the sum total of the responses of all the items in the same measure are tested for correlation)
and Cronbach coefficient alpha. The results of the reliability analysis are as follows:-
Table 3 : Reliability Analysis Results.
Scale Items Items to Scale mean Scale Cronbach
Total variance Alpha
Correlation
Sincerity Quality 0.604 7.36 2.642 0.582
Comfort 0.656 7.37 3.134 0.551
Lasting 0.435 7.36 3.102 0.792
Excitement Affordable 0.225 11.66 11.279 0.793
Stylish 0.611 11.90 8.818 0.657
Occasion 0.577 11.91 9.294 0.673
Accessories 0.612 11.73 9.242 0.661

10. Fashion 0.543 11.89 8.800 0.684
Competency Elated 0.396 11.66 6.284 0.831
Reliable 0.729 10.81 5.520 0.687
Faithful 0.747 10.91 4.873 0.660
Durability 0.581 11.06 4.906 0.756
Relationship Personality 0.330 17.16 10.095 0.689
Length Satisfaction 0.460 16.81 10.229 0.644
Innovation 0.340 17.29 10.483 0.681
Preffered 0.497 17.11 9.518 0.629
Location 0.371 17.14 10.630 0.670
Reffered 0.570 17.27 9.041 0.602
Continuance Continue - 0.521 3.01 0.818 *
Intention Discontinue -0.521 3.07 1.014 *
Loyalty Incentives 0.306 2.54 0.824 *
Incentives Patronage 0.306 2.97 0.975 *
Perceived Time worth -0.264 6.20 1.797 0.269
Value for Value 0.151 5.96 0.989 -1.402 *
Price Cost -0.196 5.87 1.692 0.025
Convenience Save Time 0.640 6.34 2.591 0.685
Effort/Gains 0.561 6.22 2.916 0.768
Hassle 0.664 6.30 2.575 0.658
All the scales having passed the CRONBACH Alpha test except two scales – “Continuance
Intention” & “Loyalty Incentives”. This means that these parameters are somehow failing to
support the reliability of “CUSTOMER RETENTION”. It is evident that with changing customer
mindset both “Continuance Intention” & “Loyalty Incentives” should be properly defined.
Factor Analysis
All the items of all the measures were factor analyzed together to test convergent and
discriminate validity of the measures. The items were subjected to principal component analysis
(with Varimax Rotation). The factor loading represented the correlation between the items with
the construct (Hair et al, 1992). In component analysis, only the factor having Eigen values
greater than 1 was considered significant (Hair et al, 1992). A minimum value of 0.50 was used
to indicate the loading of any factor. The results of factor analysis are presented here:-
Before doing a Factor Analysis; one must test the total variables considered through a K.M.O.
test. This test shows us whether we have data adequacy for factor analysis or not. i.e whether
factor analysis is possible or not. Again we also take into account the Bartlette’s Test for
Sphericity. This studies about the sample adequacy.The results for this test are as follows:-

11. Table 4 : KMO and Bartlett's Test
The K.M.O value of 0.708
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .708
indicates that the condition is
Bartlett's Test of Sphericity Approx. Chi-Square 3.517E3
“good” for further tests to be
df 406 carried out.Now we have the
Sig. .000 SCREE PLOT showing the Eigen
values according to the
Components that are being considered for the Factor Analysis :-
Table 5: Factor Analysis – Rotated Component Matrix.
Component
1 2 3 4 5 6 7 8 9
Monthly Income .053 .109 .111 -.160 .050 -.083 .165 .723 -.067
Quality .137 .064 .830 .189 .120 .196 .053 .185 -.012
Comfort .358 .101 .731 .101 .024 .131 -.040 .145 .082
Lasting more than .519 -.091 .195 .204 -.126 .488 .064 .130 .067
others
Affordability .069 .065 .056 .097 .257 .032 .062 -.018 .821
Stylish .102 .706 .142 .254 -.077 -.207 .058 -.154 .210
Special Occasions .224 .743 -.107 -.112 .310 .041 .052 -.083 .096
Accessories -.013 .586 .005 .401 .167 -.086 .225 .175 .312
Latest Fashion -.008 .799 .333 .001 .210 .000 .010 .139 -.186
Elated .233 .184 .373 .085 -.077 .000 .704 .056 -.011
Reliability .737 .021 .219 .301 .147 -.081 .160 .165 .083
Faithfulness .868 .051 .173 .098 .193 -.153 .062 -.047 .034

12. Durability .758 .068 .152 .021 .006 .236 .189 -.117 -.189
Depicts personality .191 .088 .597 -.085 .235 -.042 .416 -.271 -.083
Satisfaction .751 .151 .060 .291 .077 .000 .000 .173 .138
Innovative -.013 .719 .067 .181 -.257 .239 .167 .268 -.052
Highly Preferred .068 .430 .438 .041 .228 -.003 .074 .330 .222
Location .183 .213 -.172 -.019 .404 .173 .704 .112 .100
Highly Referred .414 .346 .232 .367 .159 -.039 .143 .243 -.149
Continue Bata .230 .312 .544 .504 -.093 .166 -.027 .100 .192
Discontinue Bata -.215 -.024 -.146 -.721 .053 -.174 -.041 -.154 -.192
Incentives -.052 -.027 .137 .040 .139 .849 .078 -.028 .037
Reward for patronage -.171 .267 .072 -.322 -.023 .343 -.325 -.254 .472
Time worthy -.236 -.086 .022 -.660 -.215 .061 .076 .205 .049
Value worthy .216 .084 .235 .172 .036 .378 -.314 .601 .019
Cost worthy .216 .199 .206 .574 .224 .093 .068 -.216 -.161
Time saving .125 -.035 .053 -.010 .825 .094 .199 .045 .128
Minimum efforts .091 .325 .213 .112 .627 .382 -.143 .100 .083
Minimum hassle .102 .154 .130 .390 .752 -.144 .026 -.010 .131
Rotation Method – Verimax with Kaiser Normalization.
Extraction Method – Principal Component Analysis.
The above results of factor analysis shows the entire variables we have used for studying brand
loyalty and customer retention is reduced to nine factors. Which have been extracted by Principal
Component Analysis. The same is shown by scree plot.
Customer Retention in Footwear Industry
Customer Consulting:-
Customer consulting is becoming an indispensable factor in today’s stiff competitive world.
Customer consulting refers to data, information systems and advice services that seller offer to
buyers.
Bata being a footwear company should use the customer consulting process to give a personal touch
to customers by answering their queries and informing them about the pros and cons about the
product they wish to purchase.
Customer Empowerment:-
Customers are becoming more sophisticated with their purchase and services. Customers should be
made to feel special .Their complaints and grievances are to be attended by the company without
much delay. 90 percent of dissatisfied customers report they share their story with friends.

13. Hypothesis Testing
Table 5 provides the results of hypotheses H1, H2, H3, and H4. All these hypotheses were tested using
multiple regression with the help of SPSS 17.0. If the company promotes these personalities in their
advertisement campaigns, they will lead to loyal customers. There were other factors which were
also considered during the study like sincerity, excitement, ruggedness and length of relationship,
which have positive impact on brand loyalty. All these hypotheses were tested using multiple
regressions with the help of SPSS 17.0.
Table 5 provides the results of hypotheses H1, H2, H3, H4 .These hypotheses indicate how brand
personalities and length of relationship can lead to brand loyalty. The results of hypothesis H5, H6,
H7 and H8 studies about customer retention.
Hypothesis Testing

14. Conclusion and Suggestions:
References:
1
Berry L.L, Seiders K and Grewal D (2002). “Understanding Service Convenience”, Journal
of Marketing, Vol.66, No.3, PP.1-17
Bhattacherjee A (2001), “An Empirical Analysius of the Antecedents of Electronic
Commerce Service Continuance”, Decision Support Systems, Vol.32, no.2, PP.201 – 214.

15. Carlson D S, Kacmar K M, Williams L J (2000). “construction and Initial Validation of a
Multidimensional Measure of Work-family Conflict”, Journal of Vocational Behaviour,
Vol.56, No.2, pp.249-276.
Sweeney J C and Soutar G N (2001), “Consumer Perceived Value: The Development of a
Multiple item Scale,” Journal of Retailing, Vol.77, No.2, pp.203 – 220.
Thaler R H (1985), “Mental Accounting and Consumer Choice”, Marketing Science, vol.4,
no.3, pp.199-214.
***