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1. Introduction
Generation Y consumers are becoming a very important segment in today's market because of their large size, their current significant amount of spending power and their potential for huge amounts of future spending power ([102] Wolburg and Pokrywczynski, 2001). The size of generation Y is argued to be somewhere around 31-70 million people world-wide ([19] Cui et al. , 2003; [97] Tsui and Hughes, 2001; [102] Wolburg and Pokrywczynski, 2001). Generation Y includes people born between 1980 and 1994 ([17] Chung et al. 2009). They currently spend around US$153-$155 billion a year ([15] Bush et al. , 2004; [19] Cui et al. , 2003; [54] Lippe, 2001; [97] Tsui and Hughes, 2001). Choosing to ignore this segment could be risky for companies considering that they are the future dominating segment of the market ([67] Neuborne and Kerwin, 1999).
Generation Y consumers as a target market present a particular challenge as they are resistant to traditional marketing efforts and difficult to capture and retain as loyal consumers ([15] Bush et al. , 2004; [60] Megehee et al. , 2003; [102] Wolburg and Pokrywczynski, 2001). They are notoriously disloyal to brands, and continued repeat purchase is difficult to secure ([84] Sebor, 2006; [103] Wood, 2004), unlike generation X consumers which are very loyal and committed to brands ([80] Richie, 1995). Understanding the approach of generation Y to brands is key to any branding strategy targeting this segment ([83] Saxton, 2007).
Branding as a concept has been well established, but the generation Y consumer segment responds to brands in ways that are previously unseen ([76] Phau and Cheong, 2009; [6] Bakewell and Mitchell, 2003). Brand loyalty has been extensively researched and shown to profit firms by saving them money and creating fringe benefits such as positive word of mouth ([56] Liu, 2007; [38] Gustafsson et al. , 2005; [103] Wood, 2004; [105] Yi and Jeon, 2003; [82] Rundle-Thiele and Bennett, 2001). The literature to date fails to address how to increase the loyalty of the typically disloyal generation Y ([95] Syrett and Lammiman, 2004). In other words, the literature does not identify what marketing tools influence how generation Y consumers perceive brands, develop a relationship with a brand and become loyal to brands. This paper...