The effect of luxury fashion brand customer equity drivers on customer loyalty-Differences among segmented markets based on purchasing patterns

Abstract: To generate future profits, luxury brands need to recognize and understand customers as individually impor-tant and analyze the impact factors that improve specific customer equity. With the growing recognition that customer equity is a key strategic asset, this study empirically investigates the effect of customer equity drivers on customer loyalty based on the study of Vogel et al.(2008) which expanded the Rust et al.(2000)’s study on customer equity. We empirically examine if the customer equity drivers have a different impact on customer loyalty. This study hypothesizes that the rel-ative effect of customer equity drivers would be different depending on the purchasing behavior of consumers and exam-ines the effects of them on the relationship of the drivers of customer equity and customer loyalty. We use stepwise multiple regression analysis to empirically test the relationship of value equity, brand equity, and relationship equity and customer loyalty. Relationship equity influences customer loyalty more strongly than value equity and brand equity. Cus-tomers seem to build loyalty based on the careful assessment of all costumer equity drivers (value equity, brand equity, and relationship equity). In addition, their relative impact is different depending on the purchasing behavior of consumers. A company cannot maintain all customer equity drivers at a high level with limited marketing resources; therefore, mar-keting investment for all customer equity drivers need to be allocated differentially depending on the purchasing behavior of consumers. Key words: luxury fashion brand(럭셔 리 패 션 브랜드), value equity(가치자산), brand equity(브랜드자산), relationshi