Gauging the scope of building alternative models of brand inertia

Abstract

In today’s rapidly changing world, the consumers who stick with products for life is bare minimum. Exposure to never ending advertisement campaigns complemented with an increased feeling of independence has created consumers that will switch products or brands as soon as they feel the need to do so. So the companies look for the aspect of creating “Brand loyalty” in the customers. But there are instances where a household consistently makes a repurchase of a brand as the customer is habituated to the brand, although not loyal. This phenomenon is termed Brand Inertia and is our current area of study. The paper starts with presenting a clear picture of what brand inertia stands for, how purchase decisions are made, differentiating it with brand loyalty. A brief of how variety seekers do switch brands is given, as it paves a way for arriving at a company’s marketing strategies. We try and understand the concept of a consideration set, the set of brands that the customers consider seriously while making a purchase decision from the huge set of products available. An evaluation cost model is used to arrive at an optimal consideration set analysing through the consumption utility and the decision cost of the brand. From among the products chosen in the consideration set, the most important criteria in choosing a brand for majority of the customers is the price factor, hence we study and analyse how certain factors like advertising and price promotions, given a price improve the brand’s repurchase. A detailed understanding of brand inertia and variety seeking extends to the concept of hybrid behaviour of customers, where an individual cannot be classified under any of a single behaviour as the same individual can exhibit the notions of inertia and brand switching at different times depending on his/her purchase history across different brands, followed by generating observed marketing implications for inertial behaviour.