This document summarizes a presentation on challenges facing brands from retailers and the importance of consumer loyalty. It discusses how brand equity compares to retailer equity over time. It also examines how consumer search behavior impacts brand versus retailer power online, with some categories seeing more branded search than generic. The document analyzes purchase behavior with and without prior search, finding over half of purchases involve searching three or fewer sites. It discusses challenges for brands in managing distribution coverage and preventing price erosion online.
Science City Kolkata ( Call Girls ) Kolkata ✔ 6297143586 ✔ Hot Model With Sex...
Power of Brand in the Multichannel World: The Good, the Bad, and the… Best
1. Kusum L. Ailawadi
Charles Jordan 1911 TU’12 Professor of Marketing
Tuck School at Dartmouth
Back in the Classroom
Tuck Reunion, October 2013
2. The Power of Consumer Loyalty
Assortment
Access
Service
Private Label
Competing Channels
Consumer
Data
Willingness to search
for preferred store
Consumer
Loyalty
Channel Power
Legal/Institutional
Norms
Product quality
Advertising
Technology
Competing Brands
Willingness to
search for preferred
brand
Brand Power
3. Challenges for brands….
Brand equity vis a vis retailers
Managing distribution coverage
Preserving loyalty when search is costless
Preventing price erosion online
4. Challenges for brands….
Brand equity vis a vis retailers
Managing distribution coverage
Preserving loyalty when search is costless
Preventing price erosion online
7. Retailers and their PLs
The brand equity of CPG retailers’ PL continues to
be low.
A useful contrast: Kenmore and Craftsman have
higher brand equity than their retail owner. Now
in Costco and Ace Hardware.
Another useful contrast: Trader Joe’s had a pure PL
strategy, now bringing in national brands
How much PL power do US retailers have and are
they “using it up”?
8. Challenges for brands….
Brand equity vis a vis retailers
Managing distribution coverage
Preserving loyalty when search is costless
Preventing price erosion online
10. Convexity of curve in CPG
Consumers don’t search – likely to switch if preferred
brand is unavailable in the store.
Large retailers stock multiple brands but last few
points of distribution carry only a few.
Of course, large brands also get more distribution.
Increasing returns drive pressure to expand coverage.
Distribution
Share
Source: Reibstein and Farris, Marketing Science 1995
11. But, in other contexts?
Consumers search for durables
Search is easy online
But, higher preference + WTP at branded and
previously visited websites (Brynjolfsson & Smith
2000)
If these are also the sites with good SEO and search
advertising, curve can be VERY concave
Brands can get most of the market share returns at the
first few points of online distribution
12. Challenges for brands….
Brand equity vis a vis retailers
Managing distribution coverage
Preserving loyalty when search is
costless
Preventing price erosion online
14. Branded vs Generic Search
Direct ROI on branded keyword paid search ads >
generic (more clicks & conversion, lower cost/click).
Generic search can spill over to branded through
“awareness of relevance” (Rutz and Bucklin 2011),
increasing generic ROI.
But, what is the volume of branded vs. generic search?
Google Insight/Trends data 2007-2012
15. Categories where Search is Branded
"Ereader"
120
100
80
60
40
20
0
ereader sony
kindle
ereader
nook ereader
nook
best ereader
ereader
books
kobo
kobo ereader
pandigital
ereader
pandigital
"Power Tools”
120
100
80
60
40
20
0
hitachi tools hitachi power
tools
hitachi
dewalt
dewalt tools dewalt power electric power chicago
chicago tools bosch power
tools
tools
power tools
tools
17. Categories where search is generic
"Digital Cameras"
120
100
80
60
40
20
0
camera
digital
camera
best digital best cameras canon digital
cameras
cameras
canon
cameras
sony cameras sony digital nikon digital
cameras
cameras
nikon
cameras
"Electric Toothbrush"
120
100
80
60
40
20
0
electric
toothbrush
best
best
toothbrush
electric
toothbrush
sonicare
sonicare
sonicare
toothbrush
toothbrush
reviews
electric
toothbrush
braun
electric
toothbrush
reviews
braun
toothbrush
oral-b
toothbrush
18. Branded versus Generic Search
Varies across categories:
Brand Relevance in Category (Fisher, Volckner & Sattler 2010),
Repeat purchase categories
“Technical feature” categories
More branded search => focus on harvesting rather than
generating demand
More branded search for high equity brands
Higher brand equity => Higher “search equity”=> More
control over where the clicks and purchases go online
19. Extent of search before purchase…
Based on web sessions in which consumer purchased:
Shoes, bed & bath, baby supplies, tools etc., handheld
devices, audio/video, office supplies, sport & fitness, health
& beauty products.
20% of purchases are at first site visited, 37% at first two,
and 51% at first three. Little difference across categories.
Among purchases made at first site visited, Amazon 22% of
the time, Wal-Mart 9%, QVC 5%, Amway 4%, JCP 3%
Significant differences across categories…….
Source: comScore, Inc. 2011 data for random sample of ≈ 70K panelists
20. Purchase without Search
Category
#1
#2
#3
Audio/Video
Walmart 35%
Amazon 19%
Best Buy 16%
Baby Supplies
Amazon 30%
Walmart 19%
ToysRUs 12%#
Bed & Bath
Walmart 15%
JCP 12%
Amazon 11%
Handhelds
Amazon 53%
Walmart 13%
Apple 10%
Health & Beauty
Amazon 23%
Amway 13%
QVC 8%
Office Supplies
Walmart 24%
Amazon 16%
Office Depot 13%
Shoes
JCP 8%
Zappos 7%
QVC 7%
Sport & Fitness
Amazon 44%
Walmart 12%
Cabelas 7%
Tools
Amazon 40%
Sears 12%
Home Depot 10%
Walmart, JCP, QVC drop with search
22. Where do consumers search?
Which is the biggest online “shopping mall”
Google vs. Amazon
Which consumer segments search at Amazon
Which segments do you want to capture online?
23. Challenges for brands….
Brand equity vis a vis retailers
Managing distribution coverage
Preserving loyalty when search is costless
Preventing price erosion online
24. Prices and Price Sensitivity Online
Prices levels are lower online
“Integrity” in posted prices common among mulitchannel
retailers
Pure-play prices lower than multichannel prices
But price dispersion is greater
high share e-tailers don’t have the lowest prices
And price sensitivity is not!
Specially in presence of additional service and information on
non-price attributes
WTP higher at branded and familiar websites
=> Can/should limit price erosion with distribution control
Sources: Lynch & Ariely 1998; Brynjolfsson & Smith 2000; Smith & Brynjolfsson, 2001;
Ancarani & Shankar 2004
25. Distribution and pricing control
Brands that are not on Amazon
RPM
MAPs and UMAPs
Product control
26. Power of Brand Online
Brand Equity
More price and
image control
Fewer
distribution
points
Lower e-tailer
dependence
Branded Search
More clicks,
lower cost/click
+SEO+Affiliates
= Search Equity