Effect of Sales on Brand Loyalty
AbstractAlthough many theoretical industrial organization models are based on the existence of a critical mass of exogenously â€œbrand loyalâ€ consumers, we find little empirical evidence supporting these assumptions in the orange juice retail market. There are very few loyal consumers. More importantly, the frequency with which stores conduct sales affects the share of loyal types so that loyalty is endogenous rather than exogenous. Householdsâ€™ demographics have statistically significant but economically minor effects on switching behavior. Switching across frozen and refrigerated states is very common, leading to more complicated substitution patterns and less loyalty than one observes looking at each state separately.
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Date of creation: 01 May 2006
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loyalty; sales; Social and Behavioral Sciences;
Other versions of this item:
- Huang Rui & Perloff Jeffrey M & Villas-Boas Sofia B, 2006. "Effects of Sales on Brand Loyalty," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 4(1), pages 1-26, July.
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