In our class there is a section where we talk about brand loyalty and brand value. We show a video that highlights how people add meaning to different brands, therefore increasing the value not only in the eyes of the consumer, but also in the price.
Brand loyalty is great for businesses because they can add a premium to the price, boosting the profit.
When brand loyalty is low, and consumers do not see the difference between product A and product B, it is tough to add that premium of brand equity.
In that same class, we tried to demonstrate that with a low-end cola product and one of the name brands (we're in the south, so you can imagine which cola we chose) and asked the group of 35 15–17-year-olds which one they would prefer. Oddly enough, the majority of the class went for the low-end cola, for the sole reason that it was cheaper. The situation remained the same if they were paying for it, if their parents were paying for it, or if a friend was paying for it.
Now this group of kids had some of their formative years during the Great Recession, so with that in their minds, maybe it swayed their thinking. But also, with the amount of drinks out there, competing on cost erodes that intangible "value" that so many notable brands have achieved.
Now we refuse to join the "Brand Loyalty is Dead" crowd, but brands need to be able to revive brand advocacy in order to create more value than the quality of the good and service they provide, or the cry above may be more realistic than we all think.
Dwayne W. Waite Jr. is partner and principal at JDW: The Charlotte Agency, a marketing and advertising shop in Charlotte, NC. He enjoys consumer behavior, economics, and football.
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