Brand Loyalty and Variety-Seeking within a House of Brands

20 Pages Posted: 30 May 2017

See all articles by Anthony Koschmann

Anthony Koschmann

Emory University, Goizueta Business School, Students

Date Written: May 24, 2017

Abstract

Brand managers are concerned with maintaining customer relationships through brand loyalty. Previous research has shown that customer loyalty is fairly prevalent in the face of competitors (Koschmann and Sheth 2016a) and even when the choice is sibling brands (i.e., a ‘branded house’ in which branded variants share the same core brand name: Koschmann and Sheth 2016b). Given the focus on brand equity – while also appealing to differing consumer segments – the company may launch differently named brands within the same category so as to not diminish any existing brand equity (i.e., a ‘house of brands’). This research examines whether the use of multiple brands maintains consumer loyalty or encourages variety-seeking across brands. Using household panel data of five brands – all owned by the same parent company – in a commonly purchased consumer good (laundry detergent) over a two-year period, the results show that switching rates vary by brand from 41.8% to 90.7% in the next shopping occasion. Furthermore, switching rates are asymmetric: any switching from another brand is most likely to go towards one brand in particular (Tide). The research concludes with implications for managers and academics alike.

Keywords: house of brands, brand loyalty, variety-seeking, Markov chain

JEL Classification: M31

Suggested Citation

Koschmann, Anthony, Brand Loyalty and Variety-Seeking within a House of Brands (May 24, 2017). Available at SSRN: https://ssrn.com/abstract=2973636 or http://dx.doi.org/10.2139/ssrn.2973636

Anthony Koschmann (Contact Author)

Emory University, Goizueta Business School, Students ( email )

1300 Clifton Road
Atlanta, GA 30322-2722
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
107
Abstract Views
542
rank
281,105
PlumX Metrics