Wednesday, February 20, 2008

Food, Frugality, and Fighting Brand Loyalty

I have a confession. I’ve been writing CHG since last July, yet cooking healthily and staying on budget remain constant struggles. Though I’m learning, and hope you’re enjoying the journey, I’m ultimately not an expert chef, dietician, or personal finance guru.

But I am a media professional. And I know a little bit about advertising. And I know that the brass ring of every ad agency in existence is brand loyalty. And I know that brand loyalty can cost a food shopper (you, me, us, etc.) a lot of cash.

Today’s article focuses on that phenomenon. What is brand loyalty? When does it start? Why is it less than great? How can it be tamed? You might find the piece a bit drier than most CHG posts (in which case, pace yourself by periodically checking into Cute Overload), but it could also be the most important one yet.

(Did that sound good? Yeah? Okay, cool. Let’s get started.)

What it is
Simply, brand loyalty occurs when a consumer uses a product or service over and over again, because A) it works for her, B) it’s habitual, and C) she’s hesitant to spend cash on the unfamiliar. For example, when I buy orange juice, it’s Tropicana, and it has been for as long as I can remember. My mom always bought it, and from what I recall, her mom did, too. I rarely purchase other brands, because it’s been imprinted on my brain (through personal experience and tons of advertising) that they won’t taste as good as Tropicana.

When it begins
One of the most eye-opening moments of my professional career occurred about five years ago, when I had a meeting in a room just used by Nickelodeon. If you’re not familiar with Nick, it’s a television channel whose major target demographic is children between the ages of 4 and 11. One of their employees left a marketing presentation printout on the conference table. In it, kids (again, ages 4 to 11) were referred to as “consumers.” Yikes.

Like Nick, many (if not most) corporations start building consumer brand loyalty from birth. (It would begin at conception if zygotes could read.) Advertisers spend billions of dollars each year to promote directly to toddlers and school-age children through magazines, television shows, movies, clothes, billboards, music, commercials, and … well, you name it. The earlier marketing begins, the more ingrained the product is, and the longer those kids will be customers.

In fact, the National Institute of Media and Family estimates that “Children as young as age three recognize brand logos, with brand loyalty influence starting at age two.” If anyone has a little girl obsessed with Disney Princesses (as many of my mom-friends do), you know what they’re talking about.

Why it costs you more
Once you become loyal to a brand, that company counts on your repeat business throughout the course of your lifetime. As a result, prices can be jacked up because it’s assumed you’ll continue to pay a premium out of allegiance. What’s more, you’ll ignore competing items, no matter what advantages they present. Wikipedia puts it best: “For example, if Joe has brand loyalty to Company A he will purchase Company A's products even if Company B's are cheaper and/or of a higher quality.”

Think of it this way: there are three types of oatmeal on sale - Quaker, McCann’s, and Generi-oats. They contain mostly the same ingredients, and are essentially the same shape, color and consistency. Quaker goes for $3 a box. McCann’s is $2 after a coupon. Generi-oats runs a mere $1.50. Since it’s habit and your dear ol’ Dad always did it, you buy Quaker without thinking twice. You’re down at least $1.50 because of brand loyalty.

Now, multiply that $1.50 by the number of items in your shopping cart. How much does brand loyalty cost you per trip? Per month? Per year?

What does this have to do with the “Healthy” part of “Cheap, Healthy, Good”?
Well, advertisers throw a LOT of resources into marketing processed food, meaning you have a better chance at becoming brand-loyal. Those products are generally less nutritious than whole foods like meats, produce, and dairy, which aren’t pushed as hard in commercials and print ads. So, not only do brand-name processed foods cost more, they can crowd fresher, healthier foods out of your shopping cart.

How to fight it
While advertising and some brand loyalty are nearly impossible to avoid, there are steps you can take to minimize their influence:

EVERYDAY LIFE: Flip off the TV. Mute commercials. Try to minimize advertising found around the home. Don’t prioritize brand names, especially in front of kids. Promote media literacy. Stress variety and try new things.

FOOD: Buy generic. Experiment with brands besides the ones you regularly use. Shop with coupons, which offer savings on a different brand each week. Use the circular, which varies discounts throughout the year. Cook from scratch. Purchase foods found around the perimeter of the supermarket. Cut back on brand-based cookbooks.

A caveat
You know what? Though they’re nearly twice the price, I find Ghirardelli chocolate chips tastier than Nestle. Inarguably, they make my cookies better. I’ve developed a brand loyalty to them. On the same note, I’m highly hesitant to switch my contact lens solution. Other products dry out my eyes, and I have an annoying habit of walking into sharp things when I can’t see.

There’s nothing wrong with brand loyalty if a product works for you, especially if you’ve tried the alternatives. It’s when that devotion is uninformed and automatic there can be an issue.

In the end
Brand loyalty isn’t catastrophic, and it won’t ruin any lives or hopes for the future (like say, smoking or riding the M Train naked). While it can be costly, both nutritionally and wallet…ally, knowing the facts and shopping smart is a stellar way of addressing concerns. If you’re interested in learning more, check out these resources:
  • Answers.com provides a deeper explanation of brand loyalty.
  • For hardcore shopping statistics, there’s this About.com article, and more from the Grocery Manufacturers of America.
  • For lots of somewhat frightening information on kids and advertising, check out the National Institute on Media and Family’s fact sheet.
(Photos courtesy of Global Package Gallery, The Wooden Porch, and Flickr member aqualilflower.)

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14 comments:

Daniel Koontz said...

Great post--thought provoking.

We've found that in many instances we can't tell the difference between generic and branded products, and in some instances the generic products are actually materially better.

Of course, Procter & Gamble prints 22-23% operating margins, so it's a highly profitable strategy for companies like that to spend heavily on advertising and then sell us overpriced food.

But that doesn't mean we as consumers have to play along.

Dan
Casual Kitchen

jimmerjim said...

I just discovered your blog a few days ago and I have enjoyed what I have read so far.

I have very, very few brand loyalties, but I totally agree on the Ghirardelli chocolate. They really are about the best. We use the bars for baking and ice cream making and always have good results.

The only other brands I can think of that I am loyal to are Dawn dishwashing liquid, and REAL Parmigano Reggiano cheese (at $20.00/lb-ouch).

Other than those three examples I generally go for store brands or those items on sale.

The only thing that stands out in my mind as really bad are canned tomatoes from Albertson's. I once bought a case when they were on sale and they had to be the most pathetic canned tomatoes ever. A few cans had NO tomatoes in them, only juice.

MCM Voices said...

Kris, this is such an interesting article - thank-you for the insider information! But not for suggesting that Ghirardelli might taste better than Nestle while costing more :(

I'm not sure how this happened but for me, a brand has to earn my loyalty and it can lose it if something better comes along that costs less and tastes better or even good enough. I certainly notice that the children are very brand-focussed though, despite my efforts (and no, I can't mute the commercials - I'm a voice actor so I have to listen :) )

Love the notion of zygote-oriented advertising!! You may be onto something.

Hops said...

Yikes! Keep this up and you're going to have some very angry marketers on your hands.

Oh, and the cute overload link is messed up.

Jaime said...

Amen. I tend to be generic-averse, but I try to at least *try* the generic. Sometimes (and almost always at Whole Foods) I discover a fantastic new cheap option. Sometimes (zip-top bags, aluminum foil, frozen berries) it's lesson learned and back to my loyal brand.

I think it's important to differentiate, though, between blind brand loyalty and trial-and-error. If you're loyal to Ghirardelli because they're better, that's not what I'd consider "brand loyalty." It's more "quality loyalty." Brand loyalty is just "my mom bought Nabisco, it's all I've ever eaten, so I'll buy it, too."

Great post.

Kris said...

Dan: great point about the profit margin. I'd love to know how Pepsi, General Mills, etc. profit, as well. Oh - and the reason I used the oatmeal example in the post is because I really do prefer the generic brand over Quaker. So you're right on about that, too.

Jimmerjim: Thanks for coming over, and I'm with you 100% on real parm. The canned stuff is a sin against nature.

MCM: I think the kids aspect is the most difficult part. There's something seriously wrong when advertisers WANT to attract the buying power of a two-year-old. Maybe that's another article? How can we reduce the impact on kids? (Also - yay on the voice artistry! That's so neat.)

Hops: link fixed. Thanks for the heads up.

Jaime: I totally agree in regards to differentiation. Preferring quality should never be a bad thing. And as for Whole Foods - YES. Their generic brands pretty much rule. I'm finding that the Union Square Trader Joe's is excellent, as well, and the prices tend to be at least competitive. Now, if only there weren't those lines...

Jaime said...

The lines at TJ terrify me. They make the store impossible to navigate. Until I, like, live in Union Square, or don't work regular hours and can go in the middle of a weekday, I'm gonna have to stay away from that place.

LJ said...

This is a fantastic article!

I recently wrote about toy manufacturers and how they are targeting toddlers and it makes me ill and I do everything I can to avoid advertising for my kids.

I think after so many ads are thrown into your face, you just start following along with it. OK, Quaker is better, I just buy it, I recognize it from commercials and magazine ads, so it must be the best.

A lot of the food I buy is local or generic or some oddball off brand I find on sale, I cannot taste the difference in about 99% of the food, but I can see the cost difference!

I agree with chocolate-only the best will do once you have tried it. I think the same goes for certain personal stuff, like I have used the same face lotion for years, it works, I like it better than other brands and I won't switch.

I think everyone needs to test out other options periodically and they may be surprised how much better other, less expensive brands are.

And, I think that ads targeting children are horrendous and they make me sick, I hate that everything I ever buy my kids has ads for 10 more items on it. So annoying!

Thanks for this great post, more people need to know that brand names don't always mean better quality!

Take Care

LJ

VixenOnABudget said...

Have you ever read "Branded"? It's a book completely about the marketing and branding aimed at 'consumers' under the age of sixteen. It's an amazing read.

Also, I beg to differ on the chocolate chips. Have you tried Trader Joe's semi-sweet chocolate chips? They are heaven in a tiny morsel.

Chief Family Officer said...

Great post, Kris! I am still, in some ways, loyal to the brands my parents used when I was growing up. I have largely switched to generics, but I've concluded, for instance, that their dedication to Charmin was justified. On the other hand, I've also discovered that even if I didn't like a generic the first time, I should try it again a couple of years later because they may have changed the formula.

@Jaime - I love TJ but can only stand to go first thing in the morning. I have to be out of there by 11:00 or the parking lot will drive me insane!

Julia said...

Thank you for this piece. You make some great, true points. It reminds me of my most recent trip to the grocery store: I was standing there in front of the dishwashing detergents with a bottle of Cascade in my hand, looking at the "sale" price of about $6.59, and then looking at all the other brands priced at around $3.00 (not on sale, mind you).

And you know what? I actually hesitated to put down the Cascade and go for a cheaper brand. Luckily, I did.

My dishes are still clean.

Carol M said...

Very thought-provoking piece.

I am also brand loyal to Ghirardelli, and I think their cookie mix is actually cheaper than buying the separate components. And the brownie mix they sell at Costco in a three-pack is a winner.

Marcus Aurelius said...

Sometimes the brand is important sometimes it is not.

Aspirin for instance. Is Bayer a superior aspirin to the generic big cheap bottle on the bottom shelf? No they are identical products except for the label and the price.

However, there is a national furniture chain near our place. The furniture in the place is absolute junk and we have various Amish furniture stores too, the brands are very different.

MommySecrets said...

Very well written & thought provoking. I'm glad the motherload blog sent us to read your article!