Brand preference being challenged

Abstract

The past decade has witnessed significant shifts in both the macro and micro environments, which have impacted all forms of marketing. The main objective of this study is to examine whether consumers' preference for manufacturer national brands today is as strong as it was, say, a decade ago. Initial findings from a large-scale survey across multiple product categories indicate a decreasing preference amongst consumers for manufacturer-originated national brands. Interestingly, this is accompanied by a non-trivial increasing preference for the No Preference option in consumer questionnaires. Similar results were found when the authors delved deeper into three specific categories - cereals, cosmetics and OTC allergy medications. To validate and explain these results the study used two other data sources, the Customer Loyalty Engagement Index from Brand Keys and the brand value measures from BAV Consulting. Alternating measures and different methodologies only confirmed the initial findings. We found in both these data sources that consumers increasingly evaluate supposedly different brands in the category as being more and more similar. In other words, brands are operating in a smaller competitive space and consumers are finding it increasingly difficult to differentiate among and between them. In short, most brands, and particularly those in the three categories that used data from three sources, face a high risk of 'commoditization'. © 2014 Macmillan Publishers Ltd.