Agricultural & Applied Economics Association

Measuring Consumer Brand Preference

Author(s): D. I. Padberg, F. E. Walker, K. W. Kepner
Source: Journal of Farm Economics, Vol. 49, No. 3 (Aug., 1967), pp. 723-733
Published by: Blackwell Publishing on behalf of the Agricultural & Applied Economics
Association
Stable URL: http://www.jstor.org/stable/1236904
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Measuring
Consumer Brand Preference*
D. I. PADBERG, F. E.
WALKER,
AND K. W. KEPNER
A model is presented
which quantifies
the brand preferences motivating
consumer purchases
from
supermarket displays.
This method of
studying
brand preference
uses the
supermarket display
as a laboratory
for
conducting
controlled experiments. Price, quality
of display space, point-of-sale
merchan-
dising, and display
allocation are controlled to isolate the effect of brand
preference upon consumer purchases. Quantitative
estimates of the
percent-
age
of brand-motivated sales and the
proportion
of brand-motivated cus-
tomers with
allegiance
to each brand are
developed.
The effect of
price
differentials upon
the brand-preference pattern is also investigated.
The
model is applied
to fluid milk sales through supermarkets in a midwestern
metropolitan
market.
NE of the distinctive features of modern
marketing
is the extensive
tOJ use of brands
by
manufacturers and distributors and the
general
preference
for branded items
by
consumers. In our
marketing process,
brands are an
important
communicator of economic information; they
aid
in
product
identification and tend to
protect buyers
and sellers from un-
certainty regarding product quality.
The
importance
of information
concerning
consumer attitudes toward,
acceptance of, preferences for, and
loyalty
to various brands within a
product
class has
long
been
recognized.
These
phenomena
often mean the
difference between success and failure for individual firms.
They
also have
an
important
influence on the nature of
competition
in
many
industries.
Yet this
important
area of economic behavior has not been
operationally
defined,
and methods of measurement are crude at best.
The desire for status in our
complex
social
system
has a
significant
in-
fluence on consumer
preference
and brand
loyalty.
The
study
of these
social influences has contributed to the
understanding
of the basis of con-
sumer brand
preferences
and
loyalties
in a
general way.
But it has not led
to
quantitative analyses
which allow the isolation of brand
preferences
from other factors
affecting
consumer
purchases,
such as
price, point-of-
purchase merchandising,
or
display-space
allocation.
In
general,
three alternative
approaches
have been
developed
in
studying
consumer brand
preferences
and associated
purchase
behavior. Consumer
surveys
have focused on
developing
a
profile
of consumer attitudes and
*
This article
reports
research conducted at the Ohio
Agricultural Experiment
Station under
Hatch 267, "Selling Strategy
and
Selling
Cost in the Ohio Fluid Milk
Industry."
D. I. PADBERG is associate
professor
of marketing
at New York State College
of
Agriculture,
Cornell
University.
F. E. WALKER is associate
professor
of agricultural
economics and rural
sociology
at the Ohio State
University.
W. K. KEPNER is assistant
professor of agricultural
economics at Purdue
University.
723
D. I.
PADBERG,
F. E.
WALKER,
AND K. W. KEPNER
projecting
the
type
of
purchase
behavior that would be consistent with
these attitudes. Problems arise, however, when consumers are
encouraged
to
explain
motivations which
they
do not understand.
Although
consumers
may
behave in a
systematic way,
it cannot be inferred that
they
are aware
of the behavior
pattern
or that
they
understand the
underlying
motivations.
In addition, questions may
cause consumers to
respond
in a
way
that is
different from
customary
behavior in order to make their actions seem
"rational."
A second
approach
uses
panels
of consumers who record
purchases;
it
projects
behavior on the basis of a
profile developed
from
previous buying
activities.1 But
although
this
type
of research has made
important
con-
tributions to our
professional understanding
of consumer
buying behavior,
numerous
problems
related to such factors as cost, time, voluntary
co-
operation, sampling, recall, fatigue,
and falsification are involved. In addi-
tion,
it does not
provide any
information on the
many
identifiable factors
that influence the
purchase
decision.
The third and
perhaps
most recent
approach
is
designed
to
analyze
be-
havior
directly [3].
Tucker has indicated that "no consideration should
be
given
to what the
subject
thinks or what
goes
on in his central nervous
system;
his behavior is the full statement of what brand
loyalty
is"
[6,
p.
32].
Studying purchase
behavior
directly may
have lower academic
ap-
peal
for some, inasmuch as
only vague
inferences can be made
concerning
the
composite
of
psychological, social,
and economic forces which form the
basis for consumer behavior. However, this
approach may
lend itself to
quantitative analysis
more
fully
than the other two
approaches.
If the
impact
of brand
loyalties upon
consumer
purchase
behavior can be iso-
lated,
such measures will have usefulness in motivation research as well as
in business decisions.
An excellent
laboratory
for
measuring
consumer
purchase responses
to
controlled environmental conditions is
provided by
the
supermarket.
Con-
sumers
shopping
in
supermarkets
make
purchase
decisions from
present
displays
without assistance or bias from store
personnel.
This
"purchase
decision
laboratory"
can be controlled in several
ways.
Factors such as
price
and
display
can be controlled so as to neutralize their effects over re-
peated
tests or varied
systematically
to isolate their influence.
By
neutraliz-
ing
all factors
except
the brand
preferences
which the
shopper brought
in
with her, we make it
possible
to measure the effect of this
preference
vari-
able.
By
responding
to variations in the
merchandising display,
consumers
provide
information
concerning
the relative
importance
of various factors
affecting purchase
decisions. Since
they
are unaware that
they
are
par-
ticipating
in a
test, they do not have to
try
to
explain
behavior which they
do not understand.
1
An extensive bibliography
and an
interesting appraisal
of
problems
of
accuracy
in research
of this
type
are
presented by
Sudman
[4, 5].
724
MEASURING CONSUMER BRAND PREFERENCE
Consumer
response
to brands is of
signal importance
in
shaping
the na-
ture of
competition
between the
large
institutions at the retail level and
the
large
institutions which
process
food items. Food
processors
were the
earliest sector of the food distribution
system
to
apply
advanced technol-
ogy.
As a
result, they developed "big
business"
organizations
and
strong
national brands.
Acceptance
of these brands was based
upon
the
superiority
of the products
identified
by
the brands after account was taken of
price
differences. In recent
years,
retail institutions have
grown large enough
to
integrate
into the technical functions of food
processing. Processing
tech-
nology
is more
widely
known and is
generally
available to
integrating
re-
tailers. The extensive
development
of distributor brands indicates a
general
erosion of the
competitive position
once held
by processors.2
How this
competitive struggle
is resolved will
depend upon
consumer
response
to the
variables involved in their
purchase
decisions. These are outlined below.
Consumer Purchase Decisions
It is
possible
to
identify
five
major
factors which influence the
proportion
of total
product
sales made
by
each brand of a
product
class
displayed
in a
supermarket:
(1)
relative brand
prices,
(2)
the
proportion
of
display space
allocated to each brand,
(3)
the
quality
of
display space,
(4)
point-of-sale
advertising
and
promotion,
and
(5)
consumer brand attitudes and
pref-
erences. The first four of these factors are direct dimensions of the
purchase
environment. The fifth is a residual of
advertising
and
promotion,
habits
and
experience,
which is
brought
to the
purchase
environment
by
the
consumer.
A
primary objective
of this
analysis
is to isolate and
quantify
the fifth
item, namely,
brand
preferences
of consumers. The
procedure
outlined in
the model
essentially
involves
controlling
the other four
aspects
of the
purchase
environment and
thereby isolating
the effect of brand
preferences.
In
many merchandising situations, however, the effects of brand
preferences
and relative brand
prices
work
together
in either a cumulative or a com-
pensating way.
For this reason, it
may
also be of interest to
quantify
the
combined effects of consumer brand
preferences
and differences in brand
prices.
While this is
possible
with the model and is discussed
later, the basic
model is
developed
to fit conditions where brand
prices
are
equal.
With
equal
brand
prices,
equal
display quality conditions,
and no
point-
of-sale
advertising
or
promotion,
it is
hypothesized
that the sales of each
brand would be
proportional
to the
display space
allocated to each if all
buyers
were indifferent
concerning
brand choice.
Conversely,
it is
hypoth-
esized that if all
buyers
had a brand
preference
there would not be
any
relationship
between the
percentage
of total sales for a brand and the
2
See Technical
Study
10 of the National Commission on Food
Marketing [2 ] for a discussion
of
private-label operations
of food retailers and measurements of
magnitude of
private-label
business.
725
D. I.
PADBERG,
F. E.
WALKER,
AND K. W. KEPNER
percentage
of
display space
allocated to it. In the latter situation, the sales
of each brand would
correspond
to the
percentage
of
buyers
that had a
preference
for each one. These situations
represent
what
might
be termed
the extremes of consumer behavior with
regard
to brands. That is,
all
buyers
could be
completely
indifferent or all could have a definite and
pronounced
brand
preference.
In
reality,
one finds that sales of each brand
are a combination of these two extremes. That is, a
portion
of sales is de-
rived from consumers who exhibit a brand
preference,
and the
remaining
portion
is attributed to the amount of
display space
allocated to the brand.
The
following
model of consumer behavior with
regard
to brands is based
upon
these
hypotheses.
The Model
If these identified
purchase patterns realistically
describe the consumer
buying
behavior that leads to total sales of a
product class, the model em-
bodying
these
hypotheses
can be used to obtain estimates of
(a)
the
per-
centage
of
buyers
who have a brand
preference, (b)
the
percentage
of these
buyers
who
prefer
each brand, and
(c)
the effect of
display-space
allocation
on sales of each brand. Let P be the
percentage
of all
buyers
who have
a
preference
for some brand and
Fi
be the
proportion
of those who have a
preference
for brand i. As a
percentage
of total
product sales, brand i sales
derived from those consumers who have a
preference
is P times
Fi.
Let
Si
be the
proportion
of total
product display space
allocated to brand i. Since
(100-P)
is the
percentage
of
buyers
who do not exhibit a brand
preference,
(100-P) percent
of total sales will be divided
among
the brands
according
to the
proportion
of total
display space
allocated to each brand. Thus,
as a
percentage
of total
product sales,
brand i sales attributable to those
buyers
without a brand
preference
are
(100-P)
times
Si.
Total brand i sales as a
percentage
of total
product
sales
(Yi)
are the sum of the two
components:
(1) Y,
=
PFi +
(100
-
P)Si.
Figure
1 is a
graphic presentation
of this model for two brands
(X
and
Y)
and for P, Fx,
and F,
equal
to 50, 0.8, and 0.2, respectively.
If P=
100,
none of the total
product
sales will be attributable to
display space
alloca-
tion; conversely,
if
P=0,
all sales will be attributable to
display-space
allocation. In the latter situation, the line
representing
sales of brand X
would be drawn from the lower left to the
upper right
corner.
A feature of this model is that
Yi
is a linear function of
Si
and of the
parameters,
P and
Fi,
which can be written as
(2) Yi
=
a
+ bSi
where
b is the
percentage
of sales affected
by space allocation,
or 100
-
P,
and
a
=PFi.
726
MEASURING CONSUMER BRAND PREFERENCE
Percentage
of Proportion of Total Display Space Percentage of
Total Sales
(Brand Y)
Total Soles
(Brand X) (Brand Y)
I.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0
100
I I I I i I I I
Fixed
Sales,
Brand Y- PF,, 50 x 0.20-0.10.
90 10
Variable
Soles,
Brand Y 100
-
P)
Sy-50
S
80
-
20
70- -T
-
so
60- ,
>
40
50-
S50
.Varlable Sales,
Brand Xs 50
Sx
Fixed Soles, Brand X
PFx-50
x 0.80=40'
30- - 70
20 -
- 60
10- -90
0 I I I I I I I 1I 100
0 o.I 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0
Proportion of Totol Display Space
(Brand X)
Figure
1.
Hypothetical
model of the
relationship
between brand sales
and the
proportion
of
display space
allocated to brands
Consequently,
since a and b can be estimated from observed sets of
values
(Yi, Si) by
the
least-squares method, the
parameters,
P and
Fi,
can
be estimated.
Under this
model, there are two basic
assumptions
about consumer
buy-
ing
behavior. First, it is assumed that some
buyers
have a brand
preference,
that
they purchase
on the basis of this
preference,
and that the
percentage
of
display space
allocated to a brand will not affect their
purchases. Second,
it is assumed that all other
buyers
have no brand
preferences
and that their
brand
purchases vary directly
with the
percentage
of
display space
allocated
to each brand. Standard statistical
concepts
can be used to measure
and/or
test the
validity
of these
assumptions.
A test of the null
hypothesis
that the
slope, b,
of the
regression
function fitted to
equation (2)
is less than or
equal
to zero is
equivalent
to
testing
the
hypothesis
that
P, the
percentage
of
buyers
who have a
preference
for some brand, is
greater
than or
equal
to
100.
Further,
a test of the null
hypothesis
that the
intercept, a, of
equation
(2)
is zero is a test of the
hypothesis
that brand sales made to those
buyers
with some brand
preference
are zero.
At least two brands must be
present
in the
display
if these estimates are
to be obtained. This
places
some limits on the relevant
range through
which
observations can be taken. For
example,
if
eight frontages
are devoted to
the
product
class under
study,
the smallest
possible space
allocation is
0.125. While
space
allocations of 0 or 1 have no
meaning
with the model,
the basic
parameters
of consumer behavior can be estimated within the
727
728 D. I.
PADBERG,
F. E. WALKE, AND K. W. KEPNER
range
of
space
allocations which
permit
a consumer choice between brands.
In
regression analysis,
the coefficient of determination
(r2)
is used as a
conventional measure of the
degree
of
relationship
between the
dependent
and
independent
variables. Even
though
the
slope
(b=100-P)
may
be
zero, this model
may
still
support
valid inferences
concerning
brand-
preference
behavior. That is, when P
equals 100, all sales of a brand are
made to
buyers
who have some brand
preference.
The
regression
line in this
instance is horizontal and r2
goes
to zero. Therefore, for the cases in which P
approaches 100, the coefficient of determination is not an
appropriate
mea-
sure of the
reliability
of the model. The measure which will be used is
Q,
a transformation of the standard error of the estimate.
If observations of the intersections of S, and
Yi
were
completely
random
in
nature, the mean of
Yi
would be 50 and
S,j,
would be 34.14. This ran-
dom
type
of behavior is identified in the index
Q
as a zero fit. On the other
hand,
a
perfect
fit would be identified as the
limiting
case where
S,sj
goes
to zero. The
following
transformation of
Sy,ii
sets
up
the index
Q
as a mea-
sure of fit in which a
perfect
fit is identified as 100 and no fit is identified
as zero:
(3)
Q
=
100
-
(2.93,Sv,,).
This measure is useful in
going beyond
r2. It
separates
the case in which
the data conform
closely
to the model with a zero b value from the random
behavior case-both of which would have zero r2 values.
The model
presented
has been
developed
to isolate and
quantify
the
manner in which consumers' brand
preferences
affect
purchase
choices. To
this
point
in the
analysis, price
does not influence the outcome because the
price
of each
competing
brand is assumed to be the same. A
question
of
paramount importance, however, is,
To what extent do these observed
brand
preferences
neutralize or
compensate
for
price
differences? For ex-
ample,
Bain's definition of
product
differentiation as an
entry
barrier in-
volves the
concept
of a difference in
price by
which the established com-
petitor may
sell above
production
costs due to
product
differentiation with-
out
incurring
the
entry
of
potential competition [1, p. 239].
This definition
has been useful as a
concept; however,
it has not been
operational.
It is
possible
to
get
some
empirical
measure of the effect of
price
relative
to brand
preference by
use of the model
given
here. For
example,
if
prices
of brand
pairs
are made
equal,
a measure of the effect of brand
preference
alone
may
be obtained. The effect of
price
differentials with the same brand
pairs
can next be
analyzed.
This
process
allows measurement of the effect
upon
consumers'
purchasing
habits and choices of the two influences com-
bined-brand
preferences
and
price
differentials.
By comparing
the results
of brand
preferences
alone to the results of brand
preferences
combined
with
price differentials,
we can see some indication of their relative im-
portance.
MEASURING CONSUMER BRAND PREFERENCE
Empirical Analysis
Data were obtained in a
large metropolitan
market on the sales of
various
pairs
of fluid milk brands from
supermarkets
with
varying display-
space allocations, under conditions of controlled brand
prices
and
quality
of
display space
and no
point-of-sale advertising
or
promotion.3
The dis-
tribution of fluid milk in the market is dominated
by
sales
through
retail
food
stores;
brand
competition
within stores is
primarily
between a manu-
facturer brand and its
corresponding
distributor brand.4 In each instance
where distributor and manufacturer brands were in
competition,
the dis-
tributor brand was
priced
a few cents
per
unit below the manufacturer
brand.
For this
analysis,
four
pairs
of brands were observed, selling
from six
retail food stores.5 One brand which was advertised
nationally
was common
to each
pair.
In two
instances, the sales of one
pair
of brands were observed
in two
supermarkets,
one located in a
relatively high
and the other in a
relatively
low income area. In
addition, the sales of one
pair
of brands were
observed under two sets of conditions:
one,
a
price
differential of two cents
per
half
gallon
between
brands,
and the
other, equal
brand
prices.
Sales of
another
pair
of brands were observed in
varying types
and sizes of container:
glass
half
gallons, paper
half
gallons,
and
glass gallons.
These combinations
yielded
12
separate
series of data
by
which brand sales could be related
to the
proportion
of
display space
allocated to each brand. The data were
then used to test the
brand-preference
model. The results are summarized
in Table 1. Measures of statistical
reliability
are included. In the two cases
for which the coefficient of determination was small, the index
Q
of the
standard error of estimate was
high, indicating
that the data fitted the
model
closely.
In
general,
the values for r2 were
high
(with
the
exception
of
the two cases with
price differences),
and the values of
Q
were all
high.
This
suggests
that the
reliability
of the model for
explaining
observed values
is
very good.
The model
generally
indicated that when there were no
price
differences
between brands,
40 to 55
percent
of fluid milk
buyers
had a definite brand
preference.
Of this
group,
80 to 100
percent preferred
the
nationally
ad-
3
Display space
variations were measured in terms of the
proportion of the total
display
area that was allocated to each brand. The total
display
area allocated to fluid milk was held
constant in each store. The
quality
of
display space
was controlled
by rotating
the
position
(in terms of store traffic
flow)
of each brand in the
dairy case. Each
sample
which served as the
basis for one sales observation consisted of the sale of 100
quart-equivalent
units of fluid milk.
4
"Manufacturer brand and its
corresponding distributor brand" indicates that the milk
is
processed and
packaged by the same firm for both brands.
5
This
analysis
relates to a market environment
involving only two competing
brands. In
this
case, the
parameters
for Brand A are estimated and the other brand is residual. The
model is
equally applicable
to situations where several brands are in competition.
729
Table 1. Estimated
brand-preference parameters
of fluid milk
buyers
in an Ohio
metropolitan
area
Proportion
of
Percentage of
Percentage of
Percentage of buyers with pref- prnd A
based
buyers basing Statistical
reliability
coefficientsb
buyers with erences that pre- r e purchases on dis-
preferences
fer Brand A - on
prefe1rc
r
play exposurea
(P) (Fa) (PFcol.
2)
(100-P) 2
(1) (2) (3) (4) (5) (6)
Brands A & B
Equal price
High-income area 40.9 .822 33.6 59.1** 74.7 .643
Low-income area 38.6 .845 32.6 61.4** 82.8 .808
Price differences
High-income area 102.0 .399 40.7 -2.0 95.3 .088
Low-income area 97.3 .283 27.5 2.7 93.2 .065
Brands A & C 54.0 .975 52.7 46.0** 91.4 .939
Brands A & D 56.6 1.028 58.1 43.5** 89.6 .767
Brands A & E
High-income
area
Paper half gallon 58.8 .742 43.6 41.2** 91.8 .958
Glass half gallon 53.6 .808 43.3 46.4** 88.0 .928
Glass gallon 44.3 .889 39.4 55.7** 63.5 .551
Low-income area
Paper half gallon 46.6 .936 43.4 53.6** 87.2 .929
Glass half gallon 16.4 1.430 23.5 83.6** 93.5 .937
Glass gallon
31.0 .849 26.3 69.0** 85.2 .903
a
In testing the hypothesis that
(100- P)
<0,
*
indicates statistical
significance at
5%
level,
**
at
1%
level.
b
Q
is a transformation of the standard error of estimate into an index where 100
represents
a
perfect
fit and zero represents random be-
havior.
c0
)I'd
t
td
m
1.8
171
m
t',
0
41.
t4
t
pq
MEASURING CONSUMER BRAND PREFERENCE
vertised manufacturer's
brand,
Brand A. These estimates seem reasonable
and consistent in the
light
of market observations of and
experience
with
the distribution of fluid milk.
Only
one
exception
to these reasonable
brand-preference parameters
was noted. For the
comparison
of
glass
half
gallons
between Brands A and
E in the low-income
area, the model indicated that a
relatively
small
por-
tion, 16
percent,
of the fluid milk
buyers
had a brand
preference,
but that
of those with a
preference,
143
percent preferred
Brand A. An examination
of the actual
space
and sales data indicated the cause of the unreasonable
estimate. At one
space allocation, the sales of Brand A were
greater
than
one would
anticipate
on the basis of the sales at the other three
space
allocations. This set of
atypical
observations increased the
slope
of the
regression line, which then resulted in an underestimate of the
proportion
of
buyers
that had a brand
preference
and a
corresponding
overestimate
of the
proportion
with a brand
preference
that
preferred
Brand A. It is not
clear whether this
atypical
behavior was caused
by
some external influence
or resulted from an error in
recording.
Since all other estimates of
parame-
ters were within tolerances
explainable by sampling error, this
unexplained
purchase
behavior was not considered as a serious malfunction of the model.
This
analysis displays
some
interesting
observations
concerning
the rela-
tionship
between consumer
preferences
and
price
differentials as a motiva-
tion of consumer
purchases.
In the
analysis
of Brands A and
B, it can be
noted that about 60
percent
of the sales of both brands result from
display
exposure
in both
high-income
and low-income situations when
prices
were
equal.
Of the sales of Brand
A, about 32 to 34
percent
of the
consuming
population
based their
purchases
on a brand
preference.
When a
price
dif-
ferential was
imposed,
the share of the
population purchasing
Brand A
based on
preference
became smaller in low-income areas and increased in
high-income
areas. The
major effect, however, upon
Brand A of a
price
differential in favor of the
competing
distributor brand was that all of the
sales which had been made at random on the basis of
display exposure
were
lost to Brand B. This
implies
that a
completely
unknown
brand, if sold at a
lower
price,
could
expect
substantial sales if it were
displayed
in a
high
proportion
of the total
product display
area. This
may explain the rapid
and
widespread acceptance
of distributor-branded milk and other
products.
The
pattern
of consumer
preference by
income seems to be a rather
complex
one. In five
comparisons
made between
high-income
and low-
income
areas, the
percentage
of consumers with a
preference for some brand
was
always higher
in the
high-income
area. On the other hand, among
these
preference-motivated customers, the
proportion
with
allegiance to the
nationally
advertised brand was
highest
in low-income areas in four of five
cases. Where both of these factors were taken into
account, the share of the
milk
purchases motivated
by preference for the national brand was
slightly
731
D. I.
PADBERG,
F. E.
WALKER,
AND K. W. KEPNER
higher
in the
high-income
areas. It was
markedly higher
in the
high-income
areas when the
price
difference was
against
the national brand.
This
suggests
that
many high-income
families
purchase the local brand
at
equal prices
while
preference
for the national brand increases where it is
sold at a
premium.
Because the milk of different brands is of
comparable
quality,
this behavior
may
be
explained by
snob
appeal.
Comparisons
available between
glass
and
paper
containers and their
effects on consumer
preferences
indicate that
generally
consumer
pref-
erences are
stronger
for
paper
containers. In both the
high-income
and low-
income areas, the
proportions
of sales motivated
by display exposure
was
higher
for both
types
of
glass
containers than for
paper
containers.
Implications
The estimation of the two brand-preference parameters, P and F, by the
model described here has
many implications,
from the
standpoint
both of
public policy
and of the individual firm. The
importance
of brand
pref-
erences and
product
differentiation in
general
or from an
industry perspec-
tive
depends
on the
percentage
of consumers who are motivated
by
brand
preferences
in their
purchase
decisions. The individual firm is most in-
terested in the
preference
of consumers for its own brand.
The
promotion budgets
of
competitors
at both the
processor
and the re-
tail levels of the food distribution
system
are extensive and
increasing
in
size. For the most
part,
advertisers make these
expenditures
without
enough
information about the
expected
effect. If it is
possible by
use of this model
to determine what
proportion
of the
consuming population
is brand con-
scious and of this
group
what
proportion
have
preferences
for various
brands,
it
may
be
possible
to
identify
the
selling problem
more
accurately
and to conduct more effective
promotion campaigns.
Some
types
of
promo-
tional
activity may
affect the indifferent consumers while other
types
re-
arrange
the
preferences
of brand-conscious consumers. This model
may
be
instrumental in
producing
a better
understanding
of
advertising
and
pro-
motion
response
in
general.
These results also have
implications
for retail food distributors. For ex-
ample,
if a substantial
portion
of the fluid milk
buyers
that
patronize
a re-
tail food firm are indifferent to
brands,
it would be
easy
to
gain
consumer
acceptance
of a distributor-controlled brand. However, the elimination of
all manufacturer brands
might
cause considerable consumer dissatisfaction
if a
relatively large proportion
of the
buyers
of a
product
class have a
definite brand
preference.
Policy
makers should find
knowledge
of these
preference parameters
for
a
large
number of
product
classes
very
useful in
understanding present
competitive
behavior and in
anticipating
future
developments
in the food
distribution
system.
This is
especially
true since the nature of
competition
732
MEASURING CONSUMER BRAND PRI';K:iNCE
between food
processors
and retailers as well as the future structure of the
food distribution
system
will be determined
by
the
processors' ability
to
maintain established and
preferred
brands.
Although
this model has been used
only
on a
pilot
basis and with
only
one
product class,
it seems to offer a
relatively inexpensive
and accurate
method of
finding
out about consumer
food-purchase
motivations. Theoreti-
cally,
the model is
applicable
to
any product
sold in retail stores where
more than one brand is
displayed. Practically, however, the model
may
be
more
adaptable
to some
product
classes than to others. The
products
to
which the model is best
adapted
are
probably
those with
(1)
relatively
large
sales volume
per
unit and
high turnover,
(2)
relatively large display
frontage,
and
(3)
relatively
little difference in the established
prices among
brands.
References
[1] BmN,
J. S., Industrial
Organization, New York, John Wiley
& Sons, Inc., 1959.
[2]
National Commission on Food
Marketing, Special
Studies in Food Marketing, Tech.
Study 10, Washington,
D.
C., U.S. Government
Printing Office, June 1966.
[3] PADBERG, D. I., "The
Space-Sales
Ratio as a Measure of Product Differentiation,"
J. Farm Econ. 46:173-178, Feb. 1964.
[4] SUDMAN, SEYMOUR, "On the
Accuracy of Recording of Consumer Panels: I," J.
Mktg.
Res.
1(2):
14-20, May 1964.
[5] , "On the
Accuracy
of
Recording
of Consumer Panels: II," J.
Mktg.
Res. 1(3):
69-83, Aug.
1964.
[6] TUCKER, W. T. "The
Development of Brand
Loyalty," J.
Mktg.
Res.
1(3):32-35,
Aug
1964.
733