From brand to basket loyalty

From all accounts, in a fast-changing consumption environment, brand loyalty is not a given


Last fortnight, Nestlé India launched a digital media campaign comprising three short videos on its official YouTube channel Meri Maggi to keep its noodles brand alive in public memory. The videos were shared on Twitter with the hashtag #WeMissYouToo, even as the Swiss packaged food company fought hard to get a clean chit from the courts and the regulatory authority for Maggi, banned by the food regulator three months ago. On 5 June, the Food Safety and Standards Authority of India asked Nestlé India to “stop further production, processing, import, distribution and sale” of nine variants of Maggi with immediate effect, saying they had been found unsafe for human consumption.

Even though the Bombay high court in August set aside the food regulator’s nationwide ban and asked Nestlé to get the popular snack retested in government-approved labs before resuming sales, it will be a while before the multinational company can bring the brand back to the shelves.

In its absence, yoga guru Baba Ramdev’s packaged consumer goods company Patanjali has launched atta noodles. Groceries retail chain Reliance Fresh is also pushing its masala noodles private label. That is not all. ITC’s Sunfeast Yippee noodles brand has revved up promotions with a heavy dose of television advertising.

Nestlé is bound to feel the heat in light of these developments. Especially since the Indian consumer has changed. He is fickle and open to experimenting.

Conversations with marketing experts and brand custodians around consumer behaviour are revealing. From all accounts, in a fast-changing consumption environment, brand loyalty is not a given. It may, in fact, be an outdated term. Experts claim that the concept of loyalty to brands is wearing away.

One of the key reasons for dwindling brand loyalty is the chaos unleashed by the increasing number of messages that a consumer receives in a day. Earlier, the messages came only through traditional media. Today, a bewildering array of messages from new media comprising digital news sites, Facebook, Twitter et al, are bombarding him, seeking his time and attention.

Then there is the most obvious reason for dilution in brand loyalty: the sheer breadth of choice. A consumer has many more options in most product categories. Spoilt for choice, he finds it difficult to stick to a particular brand.

Besides, loyalty is now replaced by value. N. Chandramouli, chief executive officer at Trust Research Advisory, a brands insights company that brings out the Brand Trust Report, will have you believe that consumers are constantly looking for greater benefits. The quest for better deals is what drives their transactions. He cites the story of his three-year-old niece who dumped her “best friend” in six months and acquired a new one as the old friend did not help her any longer. It’s the same with brands, he says. Consumers are seeking better paybacks.

To be sure, the younger generation has grown in an age of plenty. Most of their relationships are fleeting and their value systems have changed; that’s not to say they have declined. On the face of it, they are dealing with many more brands today and even their human interactions have expanded, thanks to social media. But such interactions may be at the cost of depth in relationships.

The new-age consumer is exposed to so many mobile phone brands that he changes his handset every year. Brand allegiance is not his forte, although mobile is probably not an apt example as the category itself is booming with new entrants cramming the space every day.

However, even the mature consumers are more alert and no longer die-hard brand loyalists. In their case, brand loyalty has been replaced by basket loyalty—or allegiance to a basket of brands. If I do not find a Coke, I will drink 7Up or Mirinda. But that’s about it. If I don’t get an Arrow shirt, I will settle for a Louis Philippe or Zodiac. So there is a semblance of loyalty, but to a wider range of brands. And this holds true for a variety of categories—retail stores, food and beverage or apparel brands.

To be fair, consumer won’t change brands as long as they’re not given a reason to do so. Among mature customers, loyalty is the result of a combination of familiarity and inertia. But one wrong move by the brand causes ripples. The faith in Maggi was unshakeable. Yet, it failed its customers in keeping the second brand promise in its tagline—Taste bhi, Health bhi.

Today there may be Maggi customers who may have already made new choices. Some will wait for its return and re-engage with the brand. There may be others who may have moved out of the category altogether.

So when Maggi is back—and it may be back with a bang, blowing up big bucks on advertising, allaying fears—it will be interesting to see how these consumers behave. That could be a case study in itself.

Shuchi Bansal is Mint’s media, marketing, and advertising editor. Ordinary Post will look at pressing issues related to all three. Or just fun stuff.