Thursday, June 25, 2009

Quote of the Day

There's no brand loyalty that the offer of a "penny off" can't overcome it.

~A Marketing Aphorism, and opening quote of Chapter 3: "Demand Analysis and Optimal Pricing," in Managerial Economics by Samuelson and Marks


At 6/25/2009 11:24 AM, Blogger bobble said...

"There's no brand loyalty that the offer of a "penny off" can't overcome it."

except for Coke. people will accept no substitutes.

that they consistently get folks to pay $1 for 2 cents worth of sugar water is the 8th wonder of the world

At 6/25/2009 2:14 PM, Blogger OBloodyHell said...

> There's no brand loyalty that the offer of a "penny off" can't overcome it.

Not true.

There are both brand loyalties which it would cost a lot more than "a penny" to remove, and brand "rejections" which "a penny" isn't enough to overcome.

There are companies for which no reasonable discount is worth risking.

Cisco/Linksys is such a company. Others would have to give me their product almost for free before I'd give up Cisco's top-notch service. In reality, the competition cannot lower their price enough that I'm going to risk giving up Cisco's excellent service -- because sooner or later, I'll need it.

Taco Hell is the other kind. You can drag me there, but I'll never vote to go there or go there of my own accord. Bad service, bad attitude, and I've been offended by subtleties in their commercials more than once (in particular, some years back, they said to kids, quite clearly, "hey, kids, go ahead and sneer at your parents, who feed you and clothe you and give up their lives for you... just because they 'aren't cool'". -- yes, kids are going to do that somewhat anyway, but it doesn't need to be reinforced as "okay" by a commercial). All around, I'd have to be broke and starving to use their services voluntarily.

Bad service attitudes are inexcusable in service organizations.


And as far as bobble's assertion, I'll buy either Coke or Pepsi, whichever is on sale, though I'm one of those who prefer Pepsi.

And I can tell the difference between them. As a matter of fact, some friends who did not believe I could, did a blind test with me with Coke, Pepsi, RC, and two store-brands. I identified all five correctly, though the two store brands weren't recognized by taste but by knowing that one was a "cheaper", lower-quality brand, and recognizing which one tasted crappiest.

At 6/26/2009 3:18 AM, Anonymous Ian Random said...

I heard that was a problem in Japan that brand loyalty was so great that no one would switch at any price.


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