The Behavioral Economics of Consumer Brand Choice: Establishing a Methodology

It is well established by marketing research that only comparatively few buyers of a product category (such as baked beans or breakfast cereals) are entirely loyal to a single brand (Heinz or Kellogg’s Frosties, for instance). Most buyers practice multi-brand purchasing over a period of, say, three months, selecting apparently randomly among a small subset (“repertoire”) of tried and tested brands (Ehrenberg, 1988). Data on buyer behavior for ready-to-eat breakfast cereals in the US, reported by consumer panel members are typical: “The average Shredded Wheat buyer in the year buys it about 4 times in that year, and buys other brands about 37 times. About 12 million US households [buy] Nabisco’s Shredded Wheat in the year. But it is not obvious whether these households are to be thought of as Shredded Wheat customers, or as other brands’ customers who/occasionally bought Shredded Wheat” (Ehrenberg & Goodhardt, 1977). Similar patterns are apparent for the vast majority of fast-moving consumer goods in steady-state markets (i.e., those with only a slight upward year-on-year trend in sales) in most affluent, consumer-oriented economies. Each brand attracts a relatively small proportion of the buyers of the product category who purchase that brand exclusively during the period under review: as that period lengthens, this proportion declines. Multi-brand purchasing is the norm to the extent that even the heaviest purchasers of a given brand buy other brands within the category much more than they buy their favorite brand over the course of say a year.