The Behavioral Economics of Consumer Brand Choice: Patterns of Reinforcement and Utility Maximization

Within marketing science, the analysis of brand choices for fast-moving consumer goods, based on aggregate data, shows that most individuals tend to purchase a variety of brands within a product category. More specifically, such results indicate that, in steady-state markets: (a) only a small portion of consumers buy just one brand on consecutive shopping occasions, that is, few consumers remain 100% loyal to one brand; (b) each brand attracts a small group of 100%-loyal consumers; (c) the majority of consumers buy several different brands, selected apparently randomly from a subset of existing brands; (d) existing brands usually differ widely with respect to penetration level and not so much in terms of average buying frequency (i.e., how often consumers buy it during the analysis period); and (e) brands with smaller penetration levels (or market shares) also tend to show smaller average buying frequency and smaller percentages of 100%-loyal consumers (i.e., “double jeopardy”). These results have been replicated for some 30 food and drink products (from cookies to beer), 20 cleaning and personal care products (from cosmetics to heavy cleaning liquids), gasoline, aviation fuel, automobiles, some medicines and pharmaceutical prescriptions, television channels and shows, shopping trips, store chains, individual stores, and attitudes toward brands (cf. Dall’Olmo Riley et al., 1997; Ehrenberg, 1972; Ehrenberg et al., 1990; Ehrenberg & Scriven, 1999; Goodhardt et al., 1984; Uncles et al., 1995).