by Paul Herbig

Created on: May 15, 2009   Last Updated: May 16, 2009

BRAND LOYALTY
Does it Exist and Where is it Going?


INTRODUCTION
As consumers, we all have heard of giant companies such as Coca-Cola, Proctor and Gamble and H.J. Heinz. However, how many of us are familiar with the lucrative, rapidly expanding, Loblaw's Company, Merico Incorporated, Perrigo, and the Japanese company Daiei Incorporated? These latter companies all have one thing in common - they are all private-label brands. During the eighties, the trend was to buy top notch items regardless of the quality or the price. Brand names provided people with the image they were looking for. The nineties have changed the way consumers are shopping. The brand name is losing some of its clout, and private label brands are sweeping the marketplace. This report analyzes the affect the new trend has on brand name manufacturers, and ways to tackle the problem of lost sales.

BACKGROUND INFORMATION
Brand names can be defined as " a word, letter, or a group of words or letters" (1 271). Branding means the use of this name combined with other synbols or designs that identify the product. Branding was first invented during the Middle Ages. Guilds were formed to control the quantity and quality of product made and sold. Every producer put their mark on their products, so quantity could easily be reduced, and poor quality could be traced. This is the beginning of the association between brand names and good quality or reliability. Although this laid the foundation for the contemporary beliefs of consumers, people now use brands for identification (1 272). Brands also make shopping easier for the consumer. The choices of products can be narrowed down easier, and the customer usually knows what they are purchasing.

In addition to benefitting the customer, it also benefits the producers. " A good brand speeds up shopping time for the customer - and thus reduces the marketer's selling time and effort. Sometimes the brand name is the only method of differentiation that a company has. Good brand names also make the introduction of new products easier for companies.
For some types of products, it is essential to establish a brand to differentiate it from the competition. Establishing a respected brand is not as easy as it may seem. There are several conditions that should apply when forming a new brand.
1) product should be easily identifiable
2) quality is the best value for the price
3) dependable and widespread availability
4) demand for the product class is large
5) demand is strong so

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