Measuring Customer Loyalty to Product Variants

Abstract

This. paper. measures. patterns. of. loyalty. for. variants. of. a. product,. such. as. different.pack.sizes.or.flavour ..Unlike.brands,.product.variants.are.functionally. highly.differentiated ..The.study.undertakes.large-scale.analysis.of.panel.data.and. the. results. shows. that. product. variants. can. attract. markedly. different. loyalty. levels ..However,.these.different.loyalty.levels.are.closely.related.to.big.differences. in. the. variants’. market. shares. –. higher. loyalty. predictably. goes. with. higher. sales .. Some. variants.were. found. to. be. very. popular,. and. some. are. bought. by. only. a. fraction.of. the.market ..However,. neither. large. nor. small. variants. seem. generally. to. attract. a. special. or.unusually. loyal. customer.base ..The. functional. differentiation. embodied. in. product. variants. therefore. affects. consumers’. preferences. but. not. the. persistence. of. these. preferences,. i .e .. loyalty ..The. study. also. illustrates.a.methodological.basis. for. the.analysis.of.consumer.panel.data .. The.mathematical.model.used.here.provides.benchmarks.for.the.variants’.loyalty. measures ..The.study.has.practical.implications.in.analysing.market.performance. of. variants,. customer. switching. behaviour,. and. understanding. the. relationship. between.product.differentiation.and.consumer.choice .