The Financial Times and Advertising Age both ran stories today about research sponsored by Catalina Marketing and the CMO Council showing that loyalty to packaged goods brands is suffering as consumers modify behavior during the recession. A bit over half (52%) appear to be less loyal and around a third of the “highly loyal” have gone adrift – those previously allocating 70% or more share to “their” brand. Their brand, of course, had typically been a premium brand (Cheerios, Coca-Cola Classic, Tylenol and others featured in the study) that may struggle under price and promotion competition in a tough economy.
Image By Irina Souiki
Some of the reader comments on these stories (Ad Age) suggest brand loyalty is a thing of the past. This notion is something I suggested a few years ago in an article for a UK marketing publication. The premise then was that consumers had gone the way of so many marriages by embracing “serial loyalty” (not cereal, though these are not immune to the affliction) where one is most definitely loyal … until one is not. For consumers, this means migrating through a series of brand choices as needs change and brands evolve. For marketers, this means re-defining markets, brand advantages, and customer-brand relationships in order to adapt to changing environments. Market turmoil, just like competitive advantages, can lead to serial loyalty that helps the fittest to adapt and survive as the (previously) mighty become vulnerable.