Videogamer article: Why the PS3 doesn't need a price cut...

[Kasz216]

Dallinor said:

Kasz216 said:

If Consumers have the time to research things, brand loyalty's effect is GREATLY reduced because people know what products actually fit their needs instead of what they perceive best fit their needs.

I've already dicussed this to a great extent in my last reply but you still don't seem to have taken the point. There is almost a "processing stage" a consumer goes through in order to become brand loyal.

Brand recognition > Brand Preference > Brand Loyalty

Basically a consumer is brand loyal directly BECAUSE the brand suits their needs/tastes so well.

Uninformed consumers making uninformed decisions does not make them brand loyal. They are simply purchasing a product without prior information. They are not purchasing it over another product becuase of their loyalty to the brand.

People become brand loyal through their own personal research, experience and emotional exposure with the brand. Their overall satisfaction with the company, customer care, the price, the features etc.

Your using product choice as an arguement for brand loyalty which is a backwords approach. For example, few people would be interested in a economic car made by a brand known for high quality products. Only the most hardcore brand loyalists are going to forgo all other information to pick up this new car.

Strong brand loyalty... like the kind the article is talking about IS more or less a blind loyalty. Brand Loyalty is when you buy only said product, and it is MOST prevelant among those that have less time to do research. Or you do research but mostly biased research, for example if you do all your research and playstation sites. This is also the brand loyalty you were talking about. People who only buy one brand of product.

Again, why? you still haven't offered any concrete evidence for this.

If you don't have strong brand loyalty then the featuers of the products are going to matter between at least two or three different companies. Which... there are only 2 or 3 companies in the console buisness.

If you need any proof. Look at the N64.

You seem to be mistaking the strength of brand loyalty. Not all past consumers are going to be brand loyal.

The N64 probably still sold to thousands, if not hundreds of thousands of hard core Nintendo loyals.

That doesn't mean it was enough to stop the PS1's success as a tide of switchers, shifting loyals, and new consumers moved to the new PS system.

Or your own article, for that matter. Which doesn't say brand loyalty is important. It just says having a brand is imortant. Which once again is a non factor since these are all household companies. There isn't a "Savelot brand" console.

Having a strong brand is very important. As is brand loyalty. Especially amongst the home consoles. Companies make their most profits off the hard core loyals of their brand, and their brand advertising is usually directed at this crowd.

People are likely going to trust something they've heard of before vs something they haven't or that just came from the supermarket and they don't know anything about.

Lesser brand loyalty. Or Brand equity as it were is just a minor part of the equation. In some cases it can be negative if the product your selling is different from the other products you sell. Which is somewhat the case when it comes to the PS3 vs the rest of the playstation brand.

One of the chief boons for the PS3 is having a hard core loyal crowd. Also I would say that the PSP and PS3 are in the same boat, both being cutting edge in terms of technology, both are perhaps quite similar to the rest of Sony (the message and image of the brand), if not the past PS brand.

"You learn that creating customer loyalty is neither strategic nor tactic; rather, it is the ultimate objective and meaning of brand equity. Brand loyalty is brand equity.” Daryl Travis

Basically there are hard core loyals for almost every major brand (these are considered the most important consumers for that brand).

It would appear that "lack of research" has very little to do with the reasons people become brand loyals. It has more to do with personal tastes, desires and habits that build into an overall preference for the said brand.

With the new and easy access to information (internet etc) people can now make more informed decisions regarding almost all products. However these people, who perhaps bought products without much knowledge in the past, were never brand loyals to begin with.

Also to return to the original point, that "brand loyalty is most prevalent amongst the poor."

"Findings indicate that, like brand loyalty, service loyalty has some demographic correlates, but they are few and weak"

Also China and India, two up-and-coming, but still undeniably poor countries for the most part, have very little brand loyalty, even for homemade products.

It's hard to find any other information of the demographic breakdown of brand loyalty. I'm actually now convinced that for the most part brand loyalty favours no section of society over the other. At least not to any degree that it counts.

Once again you've got it backwords and doubly backwords when it comse to the whole point of the article.

What you are emphasizing isn't brand loyalty.

If what best suits me is a candy bar with marshmellows and almonds... and Hershey's is the only company that makes that, i'm not brand loyal because of that.

To have brand loyalty you MUST at least sometimes put the companies good ahead of your own. For example is a Marshmellow and Almond candbar suits me at the moment but instead I don't buy it and buy a Dove bar because i love Heshey so must. Or buying a PSP just because I like sony.

It means more then just buying one product consisatantly because it best fits you. It's buying that product when it doesn't fit you best.

As for why I haven't offered concrete proof of it yet? Well everything i've learned about Brand Loyalty came from my teacher mostly. He learned most of what he knew from starting his own pretty successful private company who is currently one of the biggest consumer research companies in Cleveland.

As such, all the concrete proof is paid for by companies and politicians and kept for them.

I also disagree with your ascertion that the most money is made off the hardcore brand loyalists in the videogame sector. Once again i'd say that while you make the most money per brand loyalist. You make way way more money from everyone else in combined revenue.

The PS2 made way more money off of non brand loyalists then it did brand loyalists in any words.

As for China and India... now your making cross cultural comparisons which are completly pointless. If you compared rich chinese people and poor chinese people, then you'd have a point. However culutre does effect brand loyalty as it effects EVERYTHING in consumer psychology. If you look for example at the consumer history of china it's easy to see why they don't have strong brand loyaltys like we do. They don't have big companies like we do... and just have had a different economic system for a while.

For example, people in russia LIKE lines do to back when communism was around. You knew what products were good during communism because their was a line. This is something that became ingrained in their culture.

Brand Loyalty in China is strongest among the rich however, because the rich are those who get the most advertising, as advertising is set in the rich and middle class developed areas.  In otherwords the places where capitalism's influence is being felt the strongest.