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Is cross-category brand loyalty determined by risk aversion?

Nadja Silberhorn and Lutz Hildebrandt

SFB 649 Discussion Papers from Humboldt University, Collaborative Research Center 649

Abstract: The need to understand and leverage consumer-brand bonds has become critical in a marketplace characterized by increasing unpredictability, diminishing product differentiation, and heightened competitive pressure. This is especially true for fast moving consumer goods (FMCG) manufacturers and retailers. Knowing why a customer stays loyal to a brand in multiple product categories is necessary for deriving suitable marketing strategies in the context of a brand extension, yet research on the motives, characteristics, life styles and attitudes of cross-category brand loyal customers has been investigated only in a limited number of studies. We will fill a gap in the literature on cross-category brand choice behavior by analyzing revealed preference data with respect to brand loyalty in several categories in which a brand competes. Provided with purchase and corresponding survey data we investigate the product portfolio of a leading nonfood FMCG brand. We segment consumers on the basis of their revealed brand preferences and, focusing on consumers’ risk aversion, identify cross-category brand loyal customers’ personality traits as determinants of their brand loyal purchase behavior.

Keywords: cross-category brand loyalty; risk aversion; share of category requirements; customer segmentation (search for similar items in EconPapers)
JEL-codes: C51 M31 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2009-12
New Economics Papers: this item is included in nep-ind, nep-mkt, nep-neu and nep-upt
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