Brand switching

Brand switching

The objective of some sales promotions is to induce brand switching, i.e. encouraging the consumers to purchase the promoted brand instead of the regular brand that would have been purchased had there been no sales promotion. This type of brand switching is often called ‘aggressive switching’. The second type of promotion effect on brand switching is considered as ‘defensive switching’. In this case, the objective is to retain the customer by encouraging him to buy the same brand as was bought on earlier occasions.

Godrej offered free gifts plus discounts on its washing machines to make consumers shift from newly arrived competition (Samsung). That was an aggressive strategy.

To prevent its customers from shifting to Godrej, Samsung had to launch a similar scheme of free gifts and price discounts. This was a defensive strategy.

The manufacturer’s concern is to compete with other similar brands, while the concern of the reseller is to encourage customers to buy from his store. When a retailer promotes, consumers respond by switching stores, i.e. they purchase from the store that is promoting instead of the regular store.

Promotions offering price deals influence the attitude of consumers towards buying the brand. Much would depend on the size of the discount and the consumers’ sensitivity towards price and how much importance consumers place on price as compared to quality. If the attitude toward the brand has been quite low compared to some other brands, then a price promotion is likely to encourage a switch to the promoted brand. Such price promotions may also encourage consumers to buy an otherwise expensive brand which they could not afford on the normal list price.

Displays at the points of purchase may induce brand switching because they serve as conditioned stimuli associated with price promotions. Over a period of time, consumers get trained to associate displays with price reductions and respond even when the price reduction is not there.

If most of the consumers are inclined towards low prices because of economic conditions, the majority of them are assumed to be buying low priced brands. However, if the price of an expensive item is reduced because of a promotion, some consumers from low quality category will switch to the promoted brand. But when the low quality product is promoted, there is no switching because the consumers have been buying the brand without promotion. The consumers from high-income group are unlikely to switch to low-price brand because of promotion and the sales gains would not be there.