Brand loyalty

I guess I ve just grown accustomed to using [this brand]. I ve had good success with it, feel like it s a good product, it s worked well. So, I d just stick with that out of brand loyalty. 

Henry Grabowski John M. Vernon, Brand Loyalty, Entry and Price Competition In Pharmaceuticals After the 1984 Drug Act, 35 J. of Lnw Boon. 331-50 (Oct. 1992). 

A key driver of success in the OTC market is the ability to capitalize on the brand loyalty enjoyed by the prescription product. The number of category shifts to OTC status approved by the FDA has grown over time. At the same time, there are many therapeutic categories where this is not as viable strategy because they would not meet the FDA s requirement on safety for self-medication (e.g., mental health and cancer drugs). The FDA has also declined several product requests for shifts to OTC status, such as anticholesterol drug agents. 

These are obviously extreme examples, most products behave much more closely to what is termed unit elasticity— which is defined as being when a 1% reduction in price will cause a 1 % increase in demand (sales). The equihbrium price can then be defined as the price at which supply=demand (Figure 13.9 b and c). Of course the actual price will vary with the grade of product made and thus its end use, examples include pharmaceutical or technical grade chemicals, or potable or fuel alcohols. Obviously the price-demand behaviour of inelastic products demonstrates their vital importance to some consumers, especially when unchallenged by other producer companies or competing products. This class of products is obviously attractive, not least because of the relative ease with which high R D costs can be recovered. The demand, or lack of demand for products and also other considerations, such as brand loyalty on the part of the consumer and restrictions in supply due to companies exploitation of their patents tend to distort precise descriptions of market behaviour. 

Brand loyalty is the preference of a consumer for a particular brand of the same foodstuff, but this has implications as described in SCOOP (Report EUR 17528EN). The exposure for a brand loyal and non-loyal consumer could vary significantly if there were, for example, a different food additive present in one brand compared to another, for example, present in biscuit X but not Y or Z. Do brand loyal biscuit X consumers eat biscuit X at the same level as brand loyal biscuit Y consumers eat biscuit Y and do the aggregated (non-brand loyal and brand loyal) biscuit consumers (biscuits X, Y and Z) eat biscuits at the same levels as the brand loyal consumers of biscuits X and Y If the additive is only present in say biscuit X, then the aggregated biscuit consumption would under-estimate the exposure to the additive for the brand loyal consumer who only ate biscuit X, but would over-estimate the exposure for the consumer who only ate biscuit Y, but would be most representative... 

Another factor, which may influence the realistic concentration data, is store loyalty, which is in reality a sub-set of brand loyalty. This applies in those situations where for whatever reasons, such as lack of mobility, the consumer is effectively forced to purchase from a local store. If they purchase own brand foodstuffs and if these foodstuffs have a different concentration of the migrant data set compared to the overall concentration data compiled during a survey, such as the FSA BADGE survey (2000), then it is necessary to ensure that if the concentration data are higher the consumers who purchase only own brands are protected. It could be argued that if the concentration data are lower, then these data should also be used. 

Where it is not possible to reformulate or develop combination products, the response in the marketplace to the loss of a patent can be very dramatic. In the UK particularly, and to an increasing extent in the US, the entry and penetration of generic competitors into the market can be very swift. In other European countries there tends to be much more brand loyalty and the penetration of the market by generic competitors is much slower. As example of how rapidly the market in the UK can change following patent loss is given by (enalapril) Innovace (Figure 10.10) where, within a few months, prescription volumes for the branded product had fallen to a fraction of their pre-patent loss level. 

Roche also said that like Pfizer, Marion Merrell Dow would seek to build patent brand loyalty to its Cardizem products. In addition, Roche said, Cardizem products will constitute SO percent plus of the... 

Unlike a patent, the duration of a trademark is not limited to a fixed term. Hence, a trademark can be a valuable tool to help protect and maintain a market long after patent protection has expired. Individuals accustomed to buying a trademarked product during the life of a patent (when the patent owner or his licensee may be the only one offeringthe product) often will continue to seek that same product after the expiration of the patent. Such product and brand loyalty, along with its... 

Brand loyalty plays a significant part in panel results for many products including coffee (Moskowitz 1985), and beer (Allison and Uhl 1964). Brand-... 

The use of color in labeling and packaging is obviously widespread in consumer products and many industrial products. Color is used in such labels primarily because of its emotion-mood related characteristics which can, if effectively integrated into the design of label and package, contribute to the enhancement of attention processes and favorable image building qualities. Obviously, these tend to improve the probability of product trial and brand loyalty development. 

H. Grabowski and J. Vernon, Brand loyalty, entry and price competition in pharmaceuticals after the 1984 Drug Act, Journal of Law and Economics (October 1992). 

Product substitutabihty is closely related to brand loyalty. When brand loyalty is low, product substitution is likely and intensive distribution is required. Firms place a premium on point-of-purchase displays in high-traffic areas. To gain support firom wholesalers and/or retailers, the producer may offer higher-than-normal margins. Selective or exclusive distribution meikes product support easier. 

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