Brand loyalty is measured by a customer's willingness to purchase a particular brands offering regardless of price. It is the emotional experience that customers attach to that brand or its products and services. It encompasses intangibles and tangibles. And most importantly, it represents the various touchpoints between the customer and the company during the delivery and consumption of the product or service. In its most complete form, it is relevancy and trust based on a relationship that delivers rewards to both partners.

What role do brands play when you make a purchasing decision? Do you have a favourite one that conjures up a certain image or expectation in your mind, one that you will go out of your way to purchase? Or are you like many other consumers, confused by brand parity. Do you even care? Brand equity and loyalty, in this era of retailers and distributors playing the gate keeper role to the marketplace, continues to decline in importance and relevancy in the consumer purchasing decision tree.

Unless you have a brand that commands and defines a category, such as iPod, consumers simply arent as brand loyal as in years past. Even then there are private label or unbranded alternatives for most product categories, particularly those that have become commoditized. With far too many me-too products and services, indistinguishable benefits, access to off-shore production and hence low cost options, most barriers to market entry have been eliminated and competition for the consumers wallet is fierce.

I would also add that it varies by category or consumer segment, and the relative health of the category:

Is it a commodity, habitual, essential, experiential or aspirational purchase?

What is the relative equity of the national brands in the category?

What pressures do retailers inflict on manufacturers to supply exclusive assortments or brands?

Is the segment in an introductory, growth or mature stage, or one in decline?

Is it promotion driven?

Does speed to market impact the length of product life cycles?

Do private label options assume key shelf positions?

Are manufacturers really delivering unmet needs or are features and benefits simply added in the race to "add value"?

Impact on Margins

As differentiation possibilities fade and pricing assumes a greater role in market penetration, margins are squeezed for both manufacturer and retailer. (Although one can successfully argue that retailers are better able to protect theirs, while manufacturers are often left holding the bag.)

To regain lost margins, manufacturers main pursuit then becomes cost savings sought through either production or logistical means, staff reduction or budget cutbacks. It doesn't take an accountant to be able to figure out that all this translates into diminishing dollars to reinvest into the business. Less dollars in, less dollars out.

So what suffers? Innovation. Product differentiation. Advertising and marketing dollars. Market research. Brand equity. With declining price points, the consumer may initially win the first round, but ultimately they end up losers when product or service options suffer.

Yes, value for all dollars spent is paramount in any purchasing decision whether the consumer finds themselves on the lower end of the disposable income strata or at the higher end. Think of the variety of shoppers you find at Winners or HomeSense. Or the plethora of other discount shops or on-line sites that offer high end brands at significantly lower prices.

And yes, while we continue to trade down for low-priced but high value items, we also trade up for prestige or image-setting goods. Brands do indeed enjoy a higher stake in the trade up game, but trading down represents double the retail sales in todays marketplace*. In essence, price then assumes a more prominent role, usurping that of brand. Consumers arent really compromising; they are simply weighing the cost against benefits, and making their choice based on the value they attach to that particular item at the ticketed price. Recognized brands or not.

In fact, in some categories retailers own market positioning pulls consumers into their stores, at which point the consumers then shop the brands on shelves, often based on price. Again, think of which stores you frequent, why that is and how you decide which items to shop on-shelf or on-line. Compare that with the number of times you have shopped from store to store, or web-site to web-site looking for a particular brand.

Not surprisingly, manufacturers ability to speak directly to the consumers is compromised. So is education on how and what exactly sets your brand apart from the competitors. Less direct communication means less awareness. Couple that with the sheer number of available brands (and hence options), and you have the confusion that is No Brand's Land.

Reminder: Choose your retail or distribution partners accordingly; redefine brand and its execution; build and deliver trade equity through multiple vehicles.