The Role of Brand Parity in Developing Loyal Customers

Rajesh Iyer and James A. Muncy

Journal of Advertising Research, 2005, vol. 45, issue 2, 222-228

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.

Date: 2005
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