CHICAGO—(BUSINESS WIRE)—In the CPG world, brand loyalty is the golden ring for which everyone     strives. However, attaining and holding onto the loyalty of shoppers is     very difficult, and only a few will succeed. It takes more than luck to     bring success; it requires skill to understand consumer needs and     determination in precise communication that a product will deliver on     those needs. SymphonyIRI Group’s current Times & Trends Report, “Brand Loyalty: How Understanding Brand Equity Impacts Brand Loyalty and     Delivers to the Top and Bottom Line,” uncovers insights into what     drives consumers to seek out their preferred brands and highlights     recommended strategies for winning the hearts and minds of today’s     savvy, conscious shoppers.

An environment marked by consumers strapped for cash and current events,      such as the S&P downgrade of the U.S. credit rating, make addressing     brand loyalty even more complex than normal. Consumers numb from a     vacillating economy have embraced frugal ways and continue to make     purchases deliberately and cautiously. Despite a period of prolonged     economic difficulty, brand loyalty is strong and growing across a number     of CPG categories.

“While most retailers and manufacturers will instinctively pull the     lever to compete on price, it’s important to understand that     consistently leading with price has significant negative impacts on     brand equity,” says John McIndoe, senior vice president, Marketing,      SymphonyIRI. “Rather, CPG leaders must harness the power of value. The     battle for the shopper’s loyalty should not be dictated by low price,      and winning CPG marketers are clearly getting this message.”

In fact, brand loyalty has actually increased across 45 of the top 100     CPG categories during the past three years. For instance, brand loyalty     is quite high, 87.6 percent, in the sports drink category. During the     past three years, loyalty increased 6.5 points despite economic     conditions and conservative purchase patterns.

Categories with Largest Increase in Brand Loyalty
   

Point Change
2011 vs. 2008

 

% Brand Loyal Consumers
2011

Sports Drinks   6.5   87.6%
Diapers   4.4   58.3%
Batteries   3.9   73.5%
Shelf-Stable Dinners   3.7   66.9%
Household Cleaners   3.5   50.9%
Dry Packaged Dinners   3.2   59.3%
Cleaning Tools/Mops/Brooms   2.8   72.4%
Shampoo   2.8   65.9%
Food & Trash Bags   2.6   35.0%
Cat/Dog Litter   2.5   62.2%

*Source: SymphonyIRI Consumer Network™, 52     weeks ending July 3, 2011.

**This report utilizes the following definition for brand loyal:      Greater than 50 percent of buyer’s total purchasing is of a single     brand, not including private label.

“Interestingly, nearly all of the categories in which brand loyalty     gains were highest already have fairly high levels of brand loyalty,”      says Susan Viamari, editor of Times & Trends, SymphonyIRI. “In fact,      loyalty is more than 50 percent in nine out of 10 categories shown—a     striking reminder that true loyalty can survive even prolonged economic     upheaval.”

Brand Loyal Consumers Less Sensitive to Price Increases

Across categories where loyalty fell most sharply, private label loyalty     has grown. The notable exception is the creams/creamers category, where     loyalty has been negatively impacted by increased brand switching     behavior. Today, 14 percent creams/creamers buyers make less than half     of their category purchases from a single brand versus 8 percent in 2008.

Categories with Largest Decrease in Brand Loyalty
   

% Brand Loyal
Consumers
Pt. Chg.
2011 vs. 2008

 

 

% Chg. Avg. #
Unique
Brands
Purchased

2011 vs. 2008

 

% PL Loyal

Consumers

2011

 

% PL Loyal Pt
Chg.
2011 vs.
2008

 

Rfg Salad/Coleslaw   (22.1)   +6.0%   26.9%   +19.1
Gastrointestinal Tablets   (11.0)   (5.5%)   42.7%   +12.8
Cold/Allergy/Sinus Tablets   (7.2)   (7.1%)   43.9%   +10.3
Internal Analgesics   (6.9)   (10.5%)   51.5%   +11.5
Sugar   (6.5)   (5.3%)   64.1%   +7.4
Pastry/Doughnuts   (5.2)   (2.6%)   24.8%   +6.9
Creams/Creamers   (5.2)   +15.4%   26.5%   (0.3)
Mexican Foods   (5.1)   +6.9%   11.4%   +2.5
RTD Tea/Coffee   (4.9)   +3.7%   5.2%   +3.8
Butter   (4.7)   (2.7%)   68.2%   +5.2

*Source: SymphonyIRI Consumer Network™, 52     weeks ending July 3, 2011

Across the top 100 CPG categories, the largest drop in loyalty is seen     in the refrigerated salad/coleslaw category. While brand loyalty is     strong in this category, at 54 percent, private label loyalty has     increased sharply during the past three years.

Another critical finding of SymphonyIRI’s latest Brand Loyalty research     is that, generally speaking, consumers are less sensitive to price     changes as brand loyalty increases. In sugar and butter, where loyalty     is fairly low, substantial price hikes have led to sharp drops in     loyalty during the past three years. On the other hand, relatively high     loyalty has continued to grow in the blades and dish detergent     categories despite rather sizable price increases.

CPG manufacturers and retailers seeking to protect and grow brand     loyalty in today’s volatile and competitive marketplace should consider     the following action items:

  • Innovation: Manufacturers should innovate in a highly-targeted       manner, addressing specific needs across key and target shopper       segments, such as addressing a specific nutritional need, while       offering a new/experiential flavor and/or texture. Retailers should       constantly evaluate the new product development pipeline, and be on       the lookout for opportunities to bring in highly-targeted products       that address specific needs across key and target shopper segments.
  • Price & Promotion: Manufacturers and retailers should       develop a keen understanding of price elasticity across key categories       and brands, and use that knowledge as the basis for all pricing       strategies, including everyday and promotional strategies.
  • Measure & Monitor: Manufacturers and retailers should       leverage market-level models to understand expected impact of pricing       changes before implementing changes, carefully monitor actual impact       versus expected, and make real-time course corrections as warranted.

SymphonyIRI Times & Trends Webinar

SymphonyIRI is offering a free webinar, entitled “Brand Loyalty: How     Understanding Brand Equity Impacts Brand Loyalty and Delivers to the Top     and Bottom Line,” at 11 a.m. CT on Sept. 15. To register for the     webinar, hosted by Susan Viamari, editor of Times & Trends, please     visit: http://www.symphonyiri.com/NewsEvents/EventsWebinars/TimesTrendsBrandLoyalty/tabid/297/Default.aspx.

About the Report

This month’s Times & Trends Report, “Brand Loyalty: How     Understanding Brand Equity Impacts Brand Loyalty and Delivers to the Top     and Bottom Line,” is a free report available from SymphonyIRI, the     world’s leading innovation partner that enables CPG, retail and     healthcare companies to create and maximize new opportunities. The     findings of this report were compiled based on information from     SymphonyIRI AttitudeLink, SymphonyIRI Attribute Drivers,      and SymphonyIRI Shopper Insights Advantage. To download the report,      visit: http://www.symphonyiri.com/Insights/Publications/TimesTrends/tabid/106/Default.aspx.

About SymphonyIRI Group, Inc.

SymphonyIRI Group, formerly named Information Resources, Inc. (“IRI”),      is the global leader in innovative solutions and services for driving     revenue and profit growth in CPG, retail and healthcare companies.      SymphonyIRI offers two families of solutions: Core IRI solutions for     market measurement and Symphony Advantage solutions for enabling new     growth opportunities in marketing, sales, shopper marketing and category     management. SymphonyIRI solutions uniquely combine content, analytics     and technology to deliver maximum impact. SymphonyIRI helps companies     create, plan and execute forward-looking, shopper-centric strategies     across every level of the organization. For more information, visit http://www.SymphonyIRI.com.

Contacts
SymphonyIRI Group Contacts:

Tim Johnson, 415-397-7600
tjohnson@stearnsjohnson.com
Pam     Njissang, 415-397-7600
pnjissang@stearnsjohnson.com

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