Brand Perceptions & Customer Loyalty

If there's any one thing that probably demonstrates the power of effective marketing, it very well might be the over-the-counter drug industry. The way new drugs are introduced is that the founding company is able to file a patent for their specific type of drug, in which they get to reap the dividends for their innovation and profit off of it. The caveat, though, is that the patent lasts for 20 years. After the expiration date, any company is free to make a knock-off version of the drug and sell it on the market.

With this being said, after 20 years, there is nothing preventing companies from replicating an exact carbon copy of a drug and masking it as its own product. This is exemplified by pain killing over-the-counter drugs such as Advil, with many stores such as Target selling their own "Target brand" product that is literally the exact same product in reality. The catch is that these store brands and other knock-offs will sometimes cost half as much as it would to purchase the Advil brand, despite receiving identical benefits from either one. Despite this, lots of consumers still buy Advil and other similar "name brands". Why is that?

I think you can tie this into what we have read and talked about regarding brand equity. A specific section of "In Search of True Brand Equity Metrics: All Market Share Ain't Created Equal" talks about customer loyalty, the ultimate driver of the repeat purchase behavior that marketers desire so greatly. According to Reynolds and Phillips in their article about brand equity, "loyal customers are defined by the strength of their quality and price perceptions, and how those perceptions relate to purchase behavior". Clearly, brands like Advil have acquired loyalty through reputation, being a top-of-the-mind brand if you have any kind of aches or pains. This contributes to their overall brand equity, supporting the sustainability of their sales and continued success. What's interesting to me is the bit about price. Strength of price perception in this situation would imply the implication that consumers are getting a higher quality painkiller when buying Advil over a knock-off or store brand, considering they are paying a premium in comparison. However, as we know, this is not at all the case. The overarching point here is the power of brand reputation and tradition when considering brand equity. Even when a known brand charges a higher price for a product literally without any competitive advantage at all, many consumers stay loyal to the brand's reputation and perceived high quality because of the historic trust they have in the product to relieve them of pain. All you can say is hats off to companies who market products like Advil, who are successfully tapping into an important aspect of brand equity and profiting as a result without the benefit of actually selling a better product.