Marketplace Scratch Pad

Brand disloyalty

Scott Jagow Jun 22, 2009

When the going gets tough, people buy generic. A new study says brand loyalty took a big hit last year as normally loyal customers ditched their favorite toothpaste or cereal, presumably for the cheapest thing on the shelf.

From Advertising Age:

Among the big losers of loyalists last year were Procter & Gamble Co.’s Crest toothpaste, ConAgra Foods’ Hunt’s canned tomatoes, Clorox Co.’s PineSol cleaners, and Johnson & Johnson’s Tylenol, each of which lost more than a third of their highly loyal consumers, according to the study.

Companies that advertise heavily tended to fare better against the disloyalty wave. And:

Brands that dominate their categories also tend to do better at holding loyalty, he said, pointing to Kraft’s Philadelphia Cream Cheese and McCormick spices, which have relatively little competition from other national brands. “In those categories where there are many viable brands and reasonable substitutes, there’s more churn.”

Even the most rock solid brands saw less loyalty. 25 percent of Coke Classic buyers were less loyal during the study period.

One product that has actually gained highly loyal customers during the recession is Cheerios. Maybe more people are eating cereal for dinner.

I would think it’d be easier for food products to hang on to customers because that’s literally a matter of taste. I know I usually go with the store brand of deodorant or headache medicine or whatever if they’re cheaper.

How about you? You have any favorite brands that you’re clinging to even in recession? Or does brand loyalty go out the window?

We’ll have more on this tonight on Marketplace.

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