The Role of Brand Parity in Developing Loyal Customers

Abstract

Perceived brand parity is the belief in the consumers mind that major offerings in a product category are similar. The current article presents the results of a study indicating that high parity perceptions inhibit a company s ability to develop loyal customers. Whether that is good or bad depends on the type of competitive strategy a firm has chosen. With a differentiation strategy, advertising should be used to fight parity perceptions. However, with a low price strategy, parity perceptions should be fostered in an attempt to discourage brand loyalty. Thus, a starting point for many advertising campaigns should be a clear understanding of both the parity perceptions in the marketplace and the need to either develop or fight brand loyalty.