Segmentation of brand lovers based on perceived financial constraints, financial anxiety, debt avoidance and perceived financial risk

Abstract

Brand lovers are known for their intense loyalty to their loved brands, and their behaviours are usually predictable under stable market conditions. With the current global economic crisis, however, their predictability has become uncertain. This study aims to gain insight into brand lovers in marketplaces affected by economic crises. To get a closer look at this market and better understand brand lovers, they are divided into segments based on how they react to financial factors. In this segmentation, brand lovers’ perceptions of their financial constraints, their anxiety levels around their finances, their tendencies to avoid debt, and their perceptions of financial risk when it comes to continuing to purchase their loved brands are taken into account. Demographic factors such as age, gender and income are also considered. This study will be the first segmentation study of brand lovers. Hierarchical and K-means cluster analyses are performed for segmentation, and six statistically significant groups are identified: wealthy brand lovers, cautious brand lovers, indifferent brand lovers, reckless brand lovers, sensible brand lovers, and brand lovers in distress. Based on the research findings, some high-income brand lovers are hesitant to continue purchasing their loved brands during the crisis due to perceived financial risk. On the other hand, it has been determined that some low-income brand lovers do not perceive financial constraints, feel anxious, and do not find it financially risky to maintain brand loyalty. By analysing the characteristics of each group, inferences are drawn that will contribute to both brand love and consumer finance literature, as well as the development of competitive brand strategies practically.