Examining the Impact of Contextual Factors in Brand Relationship Initiation and Maintenance: Evidence from Bottom of Pyramid Markets

Abstract This study examines the impact of contextual factors on brand trust, brand loyalty and cross-buying from the perspective of the bottom of pyramid rural consumers in India. Two important contextual factors – distribution intensity and outshopping orientation – were used as the contextual factors. Effects of distribution intensity in the initiation and maintenance of consumer–brand relationships are first examined. Further, it explores the moderating role of in versus outshopping orientation in the formation and maintenance of long-term relationships between consumers and brands in bottom of pyramid markets. Data collected from 478 consumers in three villages in Gujarat, India, were analysed using structural equation modelling technique to test the hypothesized relationships using IBM AMOS 23 software. Distribution Intensity was found to positively influence brand trust. Brand trust was found to mediate the relationships between distribution intensity and brand loyalty and distribution intensity and cross buying. The importance of distribution intensity in relationship initiation was more pronounced for consumers who shopped from local retailers than those who did not. The study underlines the importance of distribution intensity of brands a relationship-based marketing strategy, especially in those products, where the switching costs are low. This study establishes the role of contextual factors in the formation and maintenance of consumer–brand relationships in the bottom of pyramid markets.