Brand Loyalty vs. Loyalty to Product Attributes

Abstract

Typically, in a specific category, a product or service can be defined not only by the brand it bears but also by multiple other attributes (e.g., pack size, price level, product formulation): a total of ten attributes for our example, detergents. While many papers have been devoted to brand loyalty, very few have been devoted to loyalty to other attributes: Is a household loyal to a certain pack size? To a certain price level? To a certain product formulation? These questions have important managerial implications in terms of the design and management of a brand’s product line. In this paper, we propose a systematic comparison of brand loyalty against loyalty to other attributes. We show that the two common measures of behavioural loyalty, share of category requirements and repeat rate, have problematic validity, due to the confounding influence of market share and purchase rate. In contrast, we argue that the Polarization index avoids these confounds and is therefore a better measure of loyalty. On the example of detergents, we show how to use Polarization to compare behavioural loyalty across attributes (e.g., are households more loyal to brands or to price levels?) and across different levels of one attribute (e.g., are consumers more loyal to high price levels than to low price levels?).