DETERMINANTS OF BRAND LOYALTY TOWARDS

COSMETIC PRODUCTS IN DHARAN

By
Aashma Limbu
Exam Roll No. 12305/18
TUReg No. 7-2-7-115-2018

A Summer project Report Submitted to

Faculty Of Management, Tribhuvan University
in partial fulfillment of the requirement for the degree of

BACHELOR OF BUSINESS ADMINISTRATION (BBA)

at the
Mahendra Multiple Campus
Tribhuvan University

Dharan, sunsari
February,
 Student’s Declaration

This is to certify that I have completed the report of summer project entitled ‘’
DETERMINANTS OF BRAND LOYALTY TOWARDS COSMETIC
PRODUCTS IN DHARAN’’ under the guidance of Dipendra Karki in partial
fulfillment of the requirement for the degree of Bachelor of Business Administration
at the Faculty of Management, Tribhuvan University. This is my original work and I
have not submitted it earlier elsewhere.

Date:

____________________
Signature:
Aashma Limbu

ii
 Certificate from the Supervisor

This is to certify that the summer project entitled ‘’Determinants of Brand Loyalty
towards cosmetic products in Dharan is an academic work done by ‘’Aashma Limbu
‘’ submitted in the partial fulfillment of the requirements in the degree of Bachelor of
Business Administration (BBA) at Faculty of Management, Tribhuvan University
under my guidance and supervision. To the best of my knowledge, the information
presented by her in the summer Project report has not been submitted earlier.

_________________________

Signature of the Supervisor

Name:

Designation:

Date:

iii
 Acknowledgement

This study is to examine Determinants of Brand loyalty towards cosmetic products in

Dharan. The success and the outcome of the Project required a lot of guidance and
assistance from many People. So, first I would like to offer sincere gratitude to the all
the People of Dharan for providing advice and support while carrying out this study.

I would like to take a privilege for offering my deep sense of gratitude and
indebtedness towards director and deputy director of BBA program and my project
supervisor, Mr. Dipendra Karki, for providing advice, ideas, suggestions and guidance
throughout this project.

My heartfelt thanks are also extended to all the people of Dharan who helped
me during the survey. I would also like to acknowledge my friends who provided me
with their extremely valuable suggestions and contributions. I have taken considerable
help from several articles, books of foreign and Nepalese writers while preparing this
study.

Aashma Limbu

Mahendra Multiple Campus

iv
 Table of Content

Student’s Declaration....................................................................................................ii

Certificate from the Supervisor....................................................................................iii

Acknowledgement.........................................................................................................iv

Table of Content.............................................................................................................v

List of Tables................................................................................................................vii

List of Figures.............................................................................................................viii

List of Abbreviations.....................................................................................................ix

Executive Summary........................................................................................................x

Chapter I Introduction................................................................................................1

1.1Background of the Study.......................................................................................1

1.2 Objectives of the Study........................................................................................2

1.3 Significance of the Study......................................................................................3

1.4 Literature Review.................................................................................................3

1.5 Theoretical Framework........................................................................................5

1.6 Methodology.........................................................................................................6

1.6.1 Research Design............................................................................................6

1.6.2 Population and Sample..................................................................................6

1.6.3 Nature and Sources of Data...........................................................................6

1.6.4 Method of data collection..............................................................................6

1.6.5 Method of data processing and Analysis.......................................................7

Chapter II Data Presentation and Analysis...............................................................8

2.1 Respondent profile................................................................................................8

2.1.1 Classification of respondents by their age.........................................................8

2.1.2 Classification of respondents based on marital status...................................9

2.1.3 Classification of Respondents on the basis of monthly income..................10

v
 2.3 Classification of respondents on the basis of loyalty to specific cosmetic
products....................................................................................................................12

2.4 Data Presentation and analysis...........................................................................13

2.4.1 Brand trust....................................................................................................13

2.4.2 Brand perceived value.................................................................................14

2.4.3 Brand Satisfaction........................................................................................15

2.4.4 Brand price...................................................................................................16

2.5 Findings and Discussions...................................................................................16

Chapter III Conclusions and Recommendations....................................................19

3.1 Conclusion..........................................................................................................19

3.2 Recommendations..............................................................................................20

References...................................................................................................................21

Appendices..................................................................................................................23

vi
 List of Tables

Table 1 Respondent classification based on age............................................................8

Table 2 Respondent classification based on marital status...........................................9

Table 3 Respondent classification based on monthly income.....................................10

Table 4 Respondent classification based on frequency of buying same product.........11

Table 5 Respondent classification based on loyalty to specific cosmetic products.....12

Table 6 Classifications of respondents based on Brand trust.......................................13

Table 7 Classifications of respondents based on Brand perceived value.....................14

Table 8 Calculation of respondents based on Brand Satisfaction................................15

Table 9 Calculation of respondents based on brand price............................................16

vii
 List of Figures

Figure 1 Theoretical framework of determinants of brand loyalty towards cosmetic

products in Dharan.........................................................................................................5

Figure 2 Bar graph of respondents based on age...........................................................9

Figure 3 Bar graph of Marital status of respondents....................................................10

Figure 4 Bar graph of respondents based on average monthly income.......................11

Figure 5 Bar graph of respondents based on frequency of buying the same product. .12

Figure 6 Bar graph of respondents based on the loyalty of specific products.............13

viii
 List of Abbreviations

BBA : Bachelor of Business Administration

SPSS : Statistical Package for Social Science Wi-Fi Wireless Fidelity
& : And

ix
 Executive Summary

The general objective of the research was to examine the determinants of brand
loyalty towards cosmetic products in Dharan on the basis of brand trust, brand
perceived value, consumer satisfaction and brand price. The specific objectives were
to assess the effect of brand trust on brand loyalty, to establish the effect of perceived
value on brand loyalty, to establish the effect of brand satisfaction on brand loyalty
and to determine the effect of brand price on brand loyalty. Similarly, this research
was conducted to understand the perception of consumers towards the cosmetics and
examine the most affecting factors of brand loyalty among the consumers in Dharan.

Research design used in this research was descriptive design and the Sample
taken was 65 among the total Population. The researcher adopted mixed approach
including quantitative and qualitative data. Both primary and secondary data were
used for data collection. Journals and research papers were taken as inference to get
some empirical knowledge. The collected data were edited, coded, tabulated and
analyzed. Mean method had been used for analyzing the data. Data are presents
through table and bar diagram.

From the study the overall impression of the respondents is that brand trust,
brand perceived value, brand satisfaction and brand price influence their cosmetic
products buying decisions. From the research conducted, the respondents considered
brand perceived value as the most influential factor in determining brand loyalty
towards cosmetic products in Dharan with weighted mean at 4.048 agreement level.
Brand price as a factor determining brand loyalty was rated the second highest with
weighted mean at 3.808 agreement level. While brand trust was considered a distant
third in determining brand loyalty at weighted mean at 3.752, while brand satisfaction
was rated the lowest factor at weighted mean at 3.238. with all the factors being
agreed as an indicator that influence brand loyalty of cosmetic products. The study
supports the view that brand trust, brand perceived value, brand satisfaction and brand
price remain prime focus for the organization to maintain market share in today’s
competitive business environment.

x
 1

Chapter I
Introduction

1.1 Background of the Study

Brand Loyalty is an important concept in brand marketing world. Kotler & Keller,
(2006) defines Brand loyalty can be defined as the extend of consumer faithfulness
towards specific brand & this faithfulness is expressed through repeat purchases and
other positive behaviors such as mouth of advocacy, irrespective of the marketing
pressures. Brand loyalty occurs when People have the Perception that the brand offers
the right features, images or the level of quality at the right Price. The Perception
translates into the repeated behavior resulting in Brand Loyalty. David A. Aaker
defines Brand Loyalty as the measure of attachment that a customer has towards the
brand. According to him, Brand Loyalty reflects how likely a consumer will be
switched to brands when that brand makes a product change either in price or product
features.

The success of a firm largely depends upon its ability to attract customers
towards its brands. It plays a crucial role for the survival of the Brand. Firm selling
Brand with high rate of consumers have a competitive advantage over the other firms.
It is found out the Brand loyal customers increases the profit by encouraging repeat
business reducing operating cost for a business. Moreover, many studies reveal that
Brand loyal customers are willing to pay any prices and are less price sensitive,
Krishnamurthy& Raj (1991). In sum, Loyalty to firms brand represents a strategic
asset which has been identified as a major source of Brand equity.

Cosmetic is any product or substance to clean, improve or change the

complexions, skin, hair, nails, teeth. It includes beauty preparations (makeup,
perfume, skin, cream) and grooming aids (soaps, shampoo, shaving cream,
deodorant). These products are in great demand because of its self-consciousness,
self-personality aspects which are closely linked with human life.

According to Kumar et al. (2006) defined, cosmetic industry is very lucrative,

innovative, fast paced industry. Cosmetic Industry has progressively been successful
in attracting large number of people from all around the World. Cosmetic Industry has
generated revenue of 135 billion dollars in the global market. Cosmetic Industry ranks
 2

Second to the Automobile Industry in United States. (Economist,1995). The highly

competitive environment in the cosmetic Industry makes it valuable area to study
brand Loyalty in Cosmetic products. cosmetic industry is a lucrative market and has
experienced a dramatic market growth with the highest prime targets for worldwide
expansion to majority of beauty players. owing to its originality, innovativeness and
technological advancement, it is essential to reveal the factors that influence the
Brand Loyalty by examining determinants of the Brand loyalty, which provides
marketing managers with the insights of establishing a more inclusive business
strategy.

In the context of Nepal, the market for the cosmetic products has been
growing significantly over the last few years. They are mainly imported from abroad.
Nepal gets its cosmetic products from number of different countries. Most of them are
manufactured in India. There are hundreds of Cosmetic shops set up in every nook
and corner of the various places of Nepal including Dharan. From Beauty parlors to
different departmental stores, there is no death of Cosmetic products for Potential
customers.

The domestic market features products of around 80 cosmetic brands including

international brands like Lakme, Loreal, Garnier, olea, Lotus and Aroma Magic.
Along with the growing market for Cosmetic Preference is changing drastically. The
rise in “awareness” due to media has forced traders to bring in Products to satiate the
need of demanding customers. The traders need to appreciate the constant changes in
customer buying behavior.

1.2 Objectives of the Study

The main objectives of this study is to identify the factor affecting brand loyalty
amongst consumers of cosmetic Products in Dharan. Other Specific objectives are as
follows:

i. To identify whether brand trust influences brand loyalty in cosmetic products

in Dharan
ii. To identify whether the perceived value influences brand loyalty in cosmetic
products in Dharan
iii. To examine the relationship between consumer satisfaction and the loyalty in
cosmetic Products in Dharan
 3

iv. To examine the relationship between brand price and brand loyalty in
cosmetic products in Dharan.

1.3 Significance of the Study

The significance of the study lies in its potential to provide insights into the important
factors that influence customer satisfaction and loyalty in the cosmetic industry. By
identifying the significant dimensions of brand image attributes and benefits, this
study can help the marketing professionals gain a better understanding of the factors
that contribute to the formation of brand loyalty.

These insights can then be used to develop effective marketing strategies that
can enhance customer satisfaction and loyalty, ultimately driving business growth. By
identifying the key factors that impact customer satisfaction and loyalty, cosmetic
industry companies can develop more targeted and effective marketing campaigns
that are more likely to resonate with their customers and enhance their overall brand
appeal.

Additionally, this study can also help business owners gain a better
understanding of the factors that contribute to the customer loyalty. By identifying
these factors, business owners can make informed decisions that drive growth and
development in their companies.

Moreover, this Findings of the study could contribute to the body of knowledge
in marketing and form part of future learning materials. Oher researchers interested in
marketing can use the findings of this study to identify further areas of the study that
could enhance knowledge in the cosmetic industry.

Overall, the significance of this study lies in its potential to provide valuable
insights to various groups in the cosmetic industry, drive business growth and
contribute to the development of marketing knowledge in the field.

1.4 Literature Review

It is extensively acknowledged that the brand loyalty is one of the ways with which
consumer expresses his or her satisfaction with the performance of the product or
service received. (Bloemer & Kasper, 1995). There are many studies depicting the
relationship between satisfaction and loyalty, where latter has been approached as
repurchase intention (Oliver, 1980).
 4

A comprehensive literature review of the factors influencing brand loyalty towards

cosmetic products has been identified key determinants. Product quality has been
shown to play a crucial role in the development of brand loyalty, with the high-quality
products generally resulting in increased brand loyalty among consumers (Baloglu &
Tasci,2009).

The image and the reputation of a brand also impact brand loyalty, with consumers
more likely to be loyal to brands that are perceived as having a positive image (Grier
& Keen. 1971).

Brand reputation is known to be vital for crafting and depicting strong image,
principally for cosmetic brands. Lau and lee (1999) found that the reputation of a
brand is indispensable for building consumer’s trust in the brand.

The concept of brand trust is also regarded as the important mediator to customer
commitment and even loyalty. Ha (2004) conceptualizes brand trust as consumer’s
intention to rely on brand and their belief that the brand is capable of achieving the
promised benefits it acclaims.

Additionally, the price of product can impact brand loyalty, with consumers often
more loyal to brands that offer good value for money (Kotler & Armstrong, 2010).

Effective marketing and advertising can create strong brand associations, increasing
brand loyalty among consumers. (Keller, 2003).

Personal recommendations can also impact brand loyalty, with consumers more likely
to be loyal to be loyal to brands recommended by friends, family, or influencers
(Richardson & Dass, 1999).

Good customer service is also important, as it build trust and satisfaction among
consumers leading to increased brand loyalty (Paraskevas & Katsikeas, 2006).

Finally, product differentiation has been shown to play a role in brand loyalty, with
unique or superior products often leading to increased brand loyalty (Aaker, 1991).
Understanding these key determinants can help companies develop effective
strategies to increased brand loyalty among their customers.
 5

1.5 Theoretical Framework

Theoretical framework is the foundation or basis upon which the entire study is
established. It is within the framework of this theory that the entire study proceeds. In
this stud the relationships between customer satisfaction, perceived value, brand trust
n price is considered as independent variable and their influence on brand loyalty as
dependent variable. According to this framework, customer satisfaction, price,
perceived value and brand trust are the determinants that can impact a customer’s
loyalty to brand. The relationship between brand loyalty and these dependent
variables suggests that a higher level of brand loyalty leads to increased customer
satisfaction, perceived value, brand trust and price. This framework suggest that
brands can increase brand loyalty by improving customer satisfaction, providing
higher value, established brand trust and setting reasonable prices.

Figure 1
Theoretical framework of determinants of brand loyalty towards cosmetic products
in Dharan

Independent variable Dependent variable

Brand trust

Perceived value
Influence on brand
loyalty
Customer satisfaction

Price
 6

1.6 Methodology

Methodology is the collection, analysis and interpretation of facts before arriving to

the conclusion. The following methodologies are used in the study:
1.6.1 Research Design

Research design refers to the overall plan or strategy that a researcher develops to
answer a research question or test a hypothesis. In order to achieve the objective of
the study online questionnaire method was used to collect the data. Defined questions
were asked to the cosmetic consumers of Dharan. This research design is developed
with the aim to know the determinants of Brand loyalty towards cosmetic products in
Dharan. Both qualitative and Qualitative methodologies were used in the research.

1.6.2 Population and Sample

A population is the entire collection of observations of interest for the research. And
the portion of population selected for the study is called sample. The population of the
study comprises of cosmetic consumers of both the genders in Dharan. The sampling
design is convenient sampling. It includes consumers of cosmetic products in Dharan.
All together 65 samples were taken from Dharan.

1.6.3 Nature and Sources of Data

The sources of data used in this method is primary. Since the report has been carried
out as an effort to understand the influence of various factors of determinants of brand
loyalty in cosmetic products, most of the information in this regard has been collected
through online questionnaire. As secondary source, the data has been collected
through websites and previous research papers.

1.6.4 Method of data collection

Data were collected through primary and secondary sources. Primary data was
collected through standard structured, multi choice, multi choice, Likert scale, closed
ended questionnaire which is designed effectively to collect the adequate truthful facts
and factors from the respondents. All together 65 respondents were taken through
online questionnaire. They were assured that their responses would be kept
confidential. Secondary data were collected from the websites, previous research
papers and the other sources.
 7

1.6.5 Method of data processing and Analysis

In order to obtain the meaningful result, data must be processed. So, all the collected
data and information are categorized, edited, coded, tabulated and analyzed in tables
using statistical package for social science (SPSS) was used.
 8

Chapter II
Data Presentation and Analysis

This Chapter covers the data presentation, data analysis and interpretation of the
results. The main purpose of this chapter is to present the data collected from
Questionnaire in tabular, graphic and descriptive form regarding my topic
‘Determinants of Brand loyalty towards Cosmetic Products in Dharan’.

2.1 Respondent profile

This topic shows personal information of respondents which are gathered from some
questions of the questionnaire. This topic helps to know the determinants of Brand
loyalty towards cosmetic products in Dharan based on age, marital status, average
income etc. In order to achieve research objectives sixty-five questions were returned.

The collected data are shown as follows:

2.1.1 Classification of respondents by their age

Table 1
Respondent classification based on age

Age Frequency Percentage

20 & below 11 16.9
21-30 46 70.8
31-40 7 10.8
51& above 1 1.5
TOTAL 65 100.0
Note. field study 2023
 9

Figure 2
Bar graph of respondents based on age

The above table and figure show the percentage of respondents as per different age
group. Out of 65 respondents, 16.9 % falls under 20 & below, 70.8 % falls under 21-
30 years, 10.8 % falls under 31-40 years and 1.5 % falls under 51 & above.

2.1.2 Classification of respondents based on marital status

Table 2
Respondent classification based on marital status

Frequency Percentage
unmarried 57 87.7
married 8 12.3
Total 65 100
Note. Field study ,2023
 10

Figure 3
Bar graph of Marital status of respondents

The above table and figure show the percentage of respondents as per marital status.
Out of 65 respondents, 87 % of the respondents are unmarried whereas 12.3 % of the
respondents are married likewise there is zero respondents of a divorced or widow/
widower.

2.1.3 Classification of Respondents on the basis of monthly income

Table 3
Respondent classification based on monthly income

Frequency Percent
4999 and below 37 56.9
5000 to 9999 8 12.3
10000 to 14999 2 3.1
15000 to 19999 4 6.2
20000 and above 14 21.5
Total 65 100
Note. Field study 2023
 11

Figure 4
Bar graph of respondents based on average monthly income

The above table and figure show that 56.9 % of the respondents earn 4999 & below
while 12.3 % earns that is 5000-9999 while 3.1 % earn 10000 to 14999 while 6.2 %
earn 15000 to 19999 and 21.5 % earn 20000 and above.

2.2 Classification of respondents on the basis of frequency of buying product of

same brand

Table 4
Respondent classification based on frequency of buying same product

Frequency Percentage
once a month 48 73.8
twice a month 9 13.8
three times a month 5 7.7
more than three times a 3 4.6
month
Total 65 100
Note. Field study 2023
 12

Figure 5
Bar graph of respondents based on frequency of buying the same product

This above table and figure show that 73.8 % of the respondents buy the product of
the same brand once a month while 13.8 % of the respondents buy the product of the
same brand twice a month while 7.7 % of the respondents buys the product of the
same brand three times a month and 4.6 % of the respondents buys the product of the
same brand more than three times a month.

2.3 Classification of respondents on the basis of loyalty to specific cosmetic

products

Table 5
Respondent classification based on loyalty to specific cosmetic products

Frequency Percentage
Brand awareness 18 27.7
Brand image 5 7.7
Brand trust 25 38.5
Brand commitment 1 1.5
Brand loyalty 16 24.6
Total 65 100
Note. Field study 2023
 13

Figure 6
Bar graph of respondents based on the loyalty of specific products

This above figure and table show that 27.7 % of the respondents are loyal to specific
brand based on Brand awareness while 7.7 % of the respondents are loyal to specific
brand based on brand image while 38.5 % of the respondents are loyal to specific
brand based on brand trust while 1.5 % of the respondents are loyal to specific brand
based on brand commitment and 24.6 % of the respondents are loyal to specific brand
based on brand loyalty.

2.4 Data Presentation and analysis

2.4.1 Brand trust

To establish the relationship between brand trust and brand loyalty the respondents
were asked a number of questions were asked as analyzed hereinafter:

Table 6
Classifications of respondents based on Brand trust

N Mean Std. Deviation

Brand reputation influences brand loyalty? 65 4.20 0.666
Brand predictability influences brand loyalty? 65 3.74 0.796
Brand competence influence brand loyalty? 65 3.75 0.751
Peer influences brand loyalty 65 3.58 0.768
Switching cost influences brand loyalty? 65 3.49 0.850
Weighted mean 3.752
Note. Calculation using SPSS
 14

The table indicates that all respondents agree that several factors, including brand
reputation, predictability, competence, peer influence, and switching cost influence
brand loyalty. Additionally, the weighted mean indicates that all respondents agree
that brand trust as a determinant of brand loyalty.

2.4.2 Brand perceived value

To establish the relationship that exist between brand perceived value and brand
loyalty, the result is presented and analyzed below:

Table 7
Classifications of respondents based on Brand perceived value

N Mean Std. Deviation

Does consistency in quality affect brand 65 4.23 0.806
loyalty?
Does attractive packaging affect perceived 65 3.89 0.732
value of cosmetic brand?
Do you think Standard of quality affects the 65 4.12 0.696
perceived value of cosmetic brand?
Does brand competence of a product influence 65 3.80 0.733
brand loyalty?
Does past usage experiences influence brand 65 4.20 0.733
loyalty?
Weighted mean 4.048
Note. Calculation using SPSS

The table indicates that respondents strongly agree that consistency in quality affect
brand loyalty likewise respondents agree that factors including attractive packaging,
quality standard, brand competence and past usage experience affect brand loyalty.
Additionally, the weighted mean indicates that all the respondents agree Brand
perceived value as a determinant of brand loyalty.
 15

2.4.3 Brand Satisfaction

To establish the relationship between Brand Satisfaction and brand loyalty, the result
is presented and analyzed below

Table 8
Calculation of respondents based on Brand Satisfaction

N Mean Std. Deviation

Does past interaction with a cosmetic 65 4.11 0.687
product influence brand loyalty?
Does brand reliability influences brand 65 3.94 0.659
loyalty in cosmetic product?
Do you think peer approval affect brand 65 3.74 0.853
loyalty in a cosmetic product?
Do you think that the information quality 65 4.08 0.645
affects the brand loyalty in a cosmetic
product?
Do you think that perceived quality 65 4.06 0.808
influences brand loyalty in a cosmetic
product?
Weighted mean 3.986
Note. Calculation using SPSS

The table indicates that all respondents agree that all factors including Past
interaction, brand reliability, Peer approval, information quality and perceived quality
influence brand loyalty. Additionally, the weighted mean indicates that all
respondents agree Brand satisfaction as a determinant of brand loyalty.
 16

2.4.4 Brand price

To establish the relationship between Brand price and brand loyalty, the result is
presented and analyzed below:

Table 9
Calculation of respondents based on brand price

N Mean Std. Deviation

Does the cost-effectiveness of a cosmetic 65 4.02 0.780
product price affect brand loyalty?
Do you think that the last purchase price 65 3.65 0.738
affect brand loyalty?
Do you think that the price consistency of 65 3.82 0.864
a cosmetic product influences loyalty to
it?
Do you think that value for money of a 65 3.75 0.919
cosmetic product influences the loyalty to
it?
Do you think that competing price affects 65 3.80 0.870
the brand loyalty?
Weighted mean 3.808
Note. Calculation using SPSS

The above table indicates that all respondents agree that several factors including
cost-effectiveness, last purchase price, price consistency, value for money and
competing brand price influence brand loyalty. Additionally, the weighted mean
shows that all respondents agree Brand price as a determinant of Brand loyalty.

2.5 Findings and Discussions

The study is based on descriptive research design which is aimed to establish the
determinants of brand loyalty towards cosmetic products in Dharan. Questionnaire is
used as the major tools for data collection.

i. The result interprets that all the respondents agree that brand loyalty is
influenced by several factors, including brand reputation, competence, peer
influence, and switching cost. Moreover, the weighted mean shows all
 17

respondents agree that brand trust is considered as a determinant of brand

loyalty by all the respondents.
ii. The above findings indicates that the majority of respondents strongly agree
that brand reputation as one of the major factors affecting brand loyalty
whereas Switching cost as being least agreed factor affecting brand loyalty.
This implies that Switching cost is considered less important factor than brand
reputation as Reputation is seen as a key driver in enhancing brand trust
among consumers in Dharan.
iii. The result interprets that the respondents strongly agree that consistency in
quality has a significant effect on brand loyalty. Additionally, they agree that
factors such as attractive packaging, quality standards, brand competence, and
past usage experience also influence brand loyalty. Furthermore, the weighted
mean indicates that all respondents agree that brand perceived value as a
determinant of brand loyalty.
iv. The above findings indicates that the majority of respondents strongly agree
that consistency in quality as one of the major factors affecting brand loyalty
whereas brand competence as least agreed factor influencing brand loyalty.
This implies that consistency in quality is considered a significant factor in
influencing brand loyalty as compared to the brand competence. This means
customers are more likely to remain loyal to brands that meets their
expectations even if it lacks competence in some area
v. The result interprets that all respondents agree that all factors including past
interactions, brand reliability, Peer approval, information quality and
perceived quality influence brand loyalty. Additionally, weighted mean
indicates that all respondents agree brand satisfaction as a determinant of
brand loyalty.
vi. The above findings indicate that majority of respondents strongly agree with
past interaction with a cosmetic product influence brand loyalty whereas peer
approval as a least agreed factor to affect brand loyalty in a cosmetic product.
This implies that past interaction with a cosmetic product has a significant
impact on brand loyalty when a customer has a firsthand experience with a
product, it creates a sense of trust and loyalty towards brand than the
recommendations from friends, family, influencers towards the brand.
 18

vii. The result interprets that all respondents agree that several factors including
cost effectiveness, last purchase price, price consistency, value for money and
competing brand price influence brand loyalty. Additionally, the weighted
mean shows that all respondents agree brand price as a determinant of brand
loyalty.
viii. The above finding indicates that majority of respondents strongly agree with
cost effectiveness of a product to influence brand loyalty whereas last
purchase price as least agreed factor to influence brand loyalty. This implies
that cost effectiveness has a significant impact because it reflects the overall
value that a product offers, while last purchase price maybe more likely to
influence short term purchase decision based on perceived value for money.
 19

Chapter III
Conclusions and Recommendations

3.1 Conclusion

The main purpose of the study is to examine the determinants of brand loyalty
towards cosmetic products in Dharan. The findings of the research confirmed that
factors such as brand trust, brand perceived value, brand satisfaction and brand price
of a cosmetic product play a very important role in strengthening customer brand
loyalty. Long-term success and sustainable reputation of an organization depends on
customer loyalty. This study supports brand trust, perceived value, brand satisfaction
and price should remain prime focus for the organization to maintain the market share
in today’s competitive business environment.

From the data analysis we can conclude that today’s customer has much
awareness of whether a product is giving some sort of value to them or not. To retain
the customer for a longer period business should focus on how to increase the loyalty
of their customers.

A customer who is satisfied with the offerings and services would be the most
loyal customer to the product. Companies should create an atmosphere where if
customer shifts to the products of other company, he/she used initially. A business
which gives importance to relationships with customers always enjoy long term
customer retention. Based on the study Brand perceived value has the highest rating
as determinants of brand loyalty in cosmetic products in Dharan. The analysis
indicated that brand loyalty has a positive influence on the purchasing behavior of the
customers and customers are more likely to purchase the products which they are
accustomed to through a strong image and exceeding expectations.

The analysis also indicated that when customers perceive a brand to offer high
value, they are more likely to remain loyal to their brand, even in the fac of
competitive pressures. High perceived value can be created through variety of factors
such as consistency in quality, attractive packaging, quality standard, brand
competence and past usage experience. Therefore, companies that want to build
strong brand loyalty in the cosmetic industry in Dharan must focus on creating high
perceived value through the combination of these factors. By doing so, they can build
 20

a loyal customer base that will continue to purchase their products and recommend to
others.

3.2 Recommendations

If the Cosmetic business in Dharan wants to enjoy good profits, it should work hard
on increasing brand loyalty through importance made on the brand perceived value. It
will help the business to increase customer retention and decrease the customer
defection. After the study of the collected data and analysis of collected data from the
questionnaire distribution, I would like to give following recommendations to
cosmetic businesses.

i. The Cosmetic business in Dharan should focus on building trust among their
customers as it has been identified as a key determinant of brand loyalty. This
has been achieved through consistency in quality, brand reputation, and
competence.
ii. The Cosmetic business should prioritize their brand reputation as it has been
identified as a significant factor influencing brand loyalty. Consumers in
Dharan value reputation of the brand and it is seen as a key driver in
enhancing brand trust among consumers.
iii. The cosmetic business should maintain consistency in their product quality as
it has been identified as a significant factor influencing brand loyalty.
Customers are more likely to remain loyal to brands that meet their
expectations even if they lack competence in some areas.
iv. The cosmetic business should focus on cost effectiveness as it has been
identified as the most significant factor influencing brand loyalty in terms of
brand price. Brands should strive to offer value for money to their customers
v. The cosmetic business also should consider other factors that influence brand
loyalty, including attractive packaging, quality standards, and past usage
experience, among others. Brands that offer these additional benefits are more
likely to build strong brand loyalty among their customers.
 21

References

Kotler, P., & Keller, K. L. (2006). Marketing management. (12th ed., pp. 238-240).
Pearson Prentice Hall.

Aaker, D. A. (1991). Managing brand equity: Capitalizing on the value of a brand

name. Free Press.

Krishnamurthy, S., & Raj, S. P. (1991). An empirical study of the impact of

advertising and promotional expenditure on brand loyal and price sensitive
customers. Journal of Marketing, 55(4), 56-71.

Kumar (2006). The evolution of the cosmetics industry: A global perspective. Journal
of Micromarketing, 26(2), 183-196.

Economist. (1995). Industry ranks second to the automobile industry in United States.
The Economist, 335(7915), 86.

Bloemer, J., & Kasper, H. D. P. (1995). The complex relationship between consumer
satisfaction and brand loyalty. Journal of Economic Psychology, 16(2), 311-
329.

Oliver, R. L. (1980). A cognitive model of the antecedents and consequences of

satisfaction decisions. Journal of Marketing Research, 17(4), 460-469.

Baloglu, S., & Tasci, A. D. (2009). Destination image and its effect on tourism: An
updated research agenda. Tourism Management, 30(1), 13-23.

Lau, G. T., & Lee, S. H. (1999). Consumers' trust in a brand and the link to brand
loyalty. Journal of Market-Focused Management, 4(4), 341-370.

Ha, S. (2004). A comparison of the effects of consumer satisfaction and loyalty

between two types of retail credit cards. Journal of Consumer Marketing,
21(6), 408-420.

Grier, S., & Keen, C. W. (1971). Television advertising and inter-brand competition.
The Journal of Political Economy, 79(3), 437-456.

Keller, K. L. (2003). Strategic brand management: Building, measuring, and

managing brand equity. Upper Saddle River, NJ: Pearson Education.
 22

Kotler, P., & Armstrong, G. (2010). Principles of marketing. Upper Saddle River, NJ:
Pearson Prentice Hall.

Paraskevas, A., & Katsikeas, C. S. (2006). Customer satisfaction and loyalty in the
mobile phone market. European Journal of Marketing, 40(11/12), 1210-1234.

Richardson, J. S., & Dass, S. (1999). A typology of consumer search behavior.

Journal of Consumer Marketing, 16(3), 243-260.
 23

Appendices

DETERMINANTS OF BRAND LOYALTY OF COSMETIC PRODUCTS IN

DHARAN

Dear respondents, I am a BBA student of Mahendra Multiple Campus, Tribhuvan

University. As a partial fulfillment of the requirement for a BBA degree, I am
conducting my summer project on'' Determinants of Brand Loyalty of Cosmetic
products in Dharan''. The questionnaire is aimed to understand the determinants of
brand loyalty of cosmetic products among consumers in Dharan. I will be very much
grateful if you could answer these questions. your responses will be of great
importance.

Thank You

1. Age
 20 & below
 21-30
 31-40
 51 & above

2. Marital Status
 unmarried
 married
 Divorced
 widow/ widower

3. Average monthly income

 4999& below
 5000 to 9999
 10000 to 14999
 15000 to 19999
 20000& above
 24

4. what is your frequency of buying the product of the same brand?

 once a month
 twice a month
 three times a month
 more than three times a month

5. what makes you loyal to specific cosmetic products?

 Brand awareness
 Brand image
 Brand Trust
 Brand Commitment
 Brand loyalty

6. Part I: Brand Trust a determinant of Brand Loyalty

strongly agree neutral disagre strongly

agree e disagree
Brand reputation influences
brand loyalty?
Brand predictability influences
brand loyalty?
Brand competence influences
brand loyalty?
peer influences brand loyalty?
switching cost influences brand
loyalty?

7. Part II: Perceived value a Determinant of a Brand Loyalty

strongl agree neutral disagre strongly

y agree e disagree
Does consistency in quality
affect brand loyalty?
Does attractive packaging
affect perceived value of a
cosmetic brand?
Do you think Standard of
quality affects the perceived
value of a cosmetic brand?
Does brand competence of a
product influence brand
loyalty?
 25

Does past usage experiences

influence brand Loyalty?
8. Part III: Satisfaction a determinant of Brand loyalty

strongly agree neutral disagre strongly

agree e disagree
Do you think past interaction
with a cosmetic product
influences brand loyalty?
Do you agree that brand
reliability influences brand
loyalty in a cosmetic product?
Do you agree that peer approval
affect Brand loyalty in a
cosmetic product?
Do you agree that the
information quality affects the
brand loyalty in a cosmetic
product?
Do you think that perceived
quality influences brand
loyalty in a cosmetic
product?

9. Part IV: Price a determinant of brand loyalty

strongly agree neutral disagre strongly

agree e disagree
Does the costeffectiveness of a
cosmetic product price affect
brand loyalty?
Do you think that the last
purchase price affect brand
loyalty?
Do you think that the price
consistency of a cosmetic
product influences loyalty to
it?
Do you think that value for
money of a cosmetic product
influences the loyalty to it?
Do you think that competing
price affects the brand
loyalty?