The Formation of Consumer Brand Preferences
Brands and brand capital have long been theorized to play an important role in the formation of the industrial market structure of consumer goods industries. We summarize several striking empirical regularities in the concentration, magnitude and persistence of brand market shares in consumer goods categories. We then survey the theoretical and empirical literatures on the formation of brand preferences and how brand preferences contribute to our understanding of these empirical regularities. We also review the literature on how brand capital creates strategic advantages to firms that own established brands.
We are grateful to Tülin Erdem, Elisabeth Honka, Carl Mela, Sridhar Moorthy, Robert Sanders, Brad Shapiro, Andrey Simonov, and Stijn Van Osselaer for comments and suggestions. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Bart J. Bronnenberg & Jean-Pierre Dubé, 2017. "The Formation of Consumer Brand Preferences," Annual Review of Economics, vol 9(1), pages 353-382.