Professional Documents
Culture Documents
December 2000
Copernicus
The Marketing Investment
Strategy Group
RESEARCH STUDY OBJECTIVES
There once was a time companies like P&G relied on their brands to command
such high loyalty that consumers purchased them without first checking prices.
As A. Gary Shilling wrote recently in Forbes:
Mr. Shilling’s conclusion begs the question, are major American brands in
decline and, if so, why?
During the past year, we have seen three different industry-wide research
studies, which have suggested that many American brands are in decline. The
indicators of decline employed in these analyses vary: from sales and profit
trends to reputation and brand power ratings. Yet none of these studies have
provided conclusive evidence that this phenomenon is occurring and, equally
important, why it is occurring.
The principals of Copernicus have long suspected, however, that many brands
are in decline—or should be—for good reasons. Among them:
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© Copernicus 2000
© Market Facts 2000
To test the hypothesis that many branded product categories are beginning to
look like commodities, Copernicus and Market Facts designed a research study
to examine:
1. Whether consumers perceive the leading brands in product and service
categories as becoming more homogeneous or heterogeneous
2. Whether consumers perceive all brands in product and service categories
as becoming more homogeneous or heterogeneous
3. Whether price or brand-driven attributes are more important when
making a purchase within a product or service category.
Copernicus designed the questionnaire and conducted the analysis of the data,
while Market Facts fielded the questionnaire and processed the data.
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© Market Facts 2000
METHODOLOGY
In the Fall of 2000, Copernicus and Market Facts undertook a joint research
study among a nationally-representative sample of 615 men and women, age
18 or older, from Market Facts’ Consumer Mail Panel. The study investigated
the performance of 48 pairs of leading brands and 51 different product and
service categories—both Old and New Economy businesses—in terms of
whether brands in these categories are becoming more similar and commodity-
like over time.
The questionnaire employed three different measures. For the first measure,
respondents evaluated whether the two leading brands based on industry
ratings in a category have become more similar or more different by rating
each on a five-point scale whose endpoints were “much more similar” and
“much more different.” The second measure used the same response scale, but
queried respondents about the brands in the category as a whole, rather than
specifying brand names. For the third measure, respondents indicated the
relative importance of low price and brand name in their purchasing decisions
within a product or service category by choosing a value on a five-point scale
whose endpoints were “Low Price is much more important” and “Brand
Name is much more important.” See Appendix for the questionnaire.
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RESEARCH RESULTS
The pairs of brands perceived as having become the most similar fall in a broad
spectrum of categories: consumer services (Visa/Mastercard); retail stores
(Staples/Office Depot); e-tailing and Web reference sites
(Pets.com/PetsMart.com; Maps.com/MapQuest.com); consumer goods
(L’Oreal/Clairol hair care products); and catalog clothing brands (L.L.
Bean/Land’s End).
At the opposite end of the spectrum, the four pairs perceived as becoming
more different are: colas (Coke/Pepsi); soap (Dove/Dial); and the
aforementioned political parties (Democrats/Republicans) and religious
denominations (Protestant/Catholic).
The rank order of categories is very similar to that from the previous question.
The categories where most consumers perceive brands are becoming more
homogeneous are credit cards, office supply stores, bottled water and
bookstores.
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The only categories where brands are perceived to be maintaining (but not
increasing) differentiation are: jewelry, religious denominations, and political
parties.
The categories with the highest percentage of consumers basing their purchase
decision on price more than on brand name are: online bookstores; rental cars;
office supply stores; bookstores and bottled water. The only categories for
which brand name outweighs price (and this is by a modest margin) are
automobiles, liquor and beer.
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CONCLUSION:
Brands are Becoming Less Differentiated
These findings suggest the need for companies to reevaluate current branding
efforts and learn how to develop truly differentiated brands that are set apart
from competitors in the minds of their customers.
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© Market Facts 2000
Table I
Similarity Scores of Leading Brands*
Similarity
Score
Price
Importance
Score
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© Market Facts 2000
APPENDIX
2971-02
Please give this questionnaire to the adult male head in your household. (This may be
you!)
Today I have some questions for you about various brands in different product and
service categories. Please keep in mind that we are most interested in your
personal opinions and habits, not what others may think. Your input will be helpful.
Most of the questions can be answered by simply placing an "X" in the appropriate
box or boxes. In the questions where I have asked you to write in answers, please
be as specific as possible.
When you have completed the questionnaire, please return it to me in the enclosed
postage-paid envelope.
Once again, thank you for your time and hope you have a pleasant day!
Cordially,
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© Copernicus 2000
© Market Facts 2000
SECTION 1: BRAND SIMILARITY
Some people feel that many products, services, and brands are becoming more similar over
time, while others think that they are becoming more different.
1. Let’s start with some specific products and services. Below you will see a list of pairs of
brands in different product and service categories. For example, McDonald’s and Burger
King in the Fast Food category. For each pair listed, please tell us whether in your
opinion, based on everything you have read, heard, and experienced, you think these
brands are becoming more similar or more different over time.
On the scale below, “5” indicates that the two brands are becoming much more similar to each other in
the past few years and “1”indicates they are becoming much more different.
5 = The two brands are becoming much more similar to each other in the past few years
4 = The two brands are becoming somewhat more similar to each other in the past few years
3 = The two brands have not changed in the past few years in how different or similar they are to
each other.
2 = The two brands are becoming somewhat more different from each other in the past few years
1 = The two brands are becoming much more different from each other in the past few years
Please indicate your opinions by X’ing one box across for each of the following categories.
"X" “Don’t Know” only if you are completely unfamiliar with either brand listed in each
pair.
Much
Much Somewhat Somewhat More
Over time, the two brands are More More No More Differen Don’t
becoming...................................................
Similar Similar Change Different t Know
5 4 3 2 1 6
1. Hair Care Products:
L'Oreal /Clairol...............................................
b1 b2 b3 b4 b5 b6 (16)
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8. Health & Fitness Clubs:
Bally’s/Gold’s Gym ................................
b1 b2 b3 b4 b5 b6
9. Long-Distance Telephone Service:
AT&T/MCI .....................................................
b1 b2 b3 b4 b5 b6
10. Gas Stations:
Mobil/Shell ....................................................
b1 b2 b3 b4 b5 b6
11. Athletic Shoes:
Nike/Adidas ...................................................
b1 b2 b3 b4 b5 b6
12. Cigarettes:
Marlboro/Camel.............................................
b1 b2 b3 b4 b5 b6
13. Online Travel Sites:
Travelocity.com/PriceLine.com...................... b 1 b2 b3 b4 b5 b6
14. Laundry Detergents:
Tide/All ..........................................................
b1 b2 b3 b4 b5 b6
15. Internet Search Engines:
Yahoo/MSN ...................................................
b1 b2 b3 b4 b5 b6
16. Soap:
b1 b2 b3 b4 b5 b6 (32)
Dove/Dial .................................................
17. Newspapers:
b1 b2 b3 b4 b5 b6 (33)
Wall Street Journal/NY Times..................
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SECTION 1: BRAND SIMILARITY (continued)
25. Diapers:
b1 b2 b3 b4 b5 b6
Huggies/Pampers ................................
26. Cars:
b1 b2 b3 b4 b5 b6
Chevrolet/Ford ...........................................
27. Toothpaste:
b1 b2 b3 b4 b5 b6
Colgate/Crest.............................................
28. Motor Oils:
b1 b2 b3 b4 b5 b6
Mobil/Pennzoil............................................
29. Cosmetics:
b1 b2 b3 b4 b5 b6
Revlon/Cover Girl................................
30. Department Stores:
b1 b2 b3 b4 b5 b6
Sears/J.C. Penney................................
31. Beer:
b1 b2 b3 b4 b5 b6
Budweiser /Miller................................
32. Cars:
b1 b2 b3 b4 b5 b6 (48)
Mercedes-Benz/BMW ................................
33. Bottled Water:
b1 b2 b3 b4 b5 b6
Aquafina/Evian ..........................................
34. Brokerages:
b1 b2 b3 b4 b5 b6
Merrill Lynch/Fidelity ................................
35. Cookies:
b1 b2 b3 b4 b5 b6
Chips Ahoy/Chips Deluxe ..........................
36. Office Supply Stores:
b1 b2 b3 b4 b5 b6
Staples/Office Depot................................
37. Bookstores:
b1 b2 b3 b4 b5 b6
Barnes & Noble/Borders ............................
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38. Online Toy Stores:
b1 b2 b3 b4 b5 b6
ToysRUs.com/eToys.com ..........................
39. TV Networks:
b1 b2 b3 b4 b5 b6
NBC/CBS...................................................
40. Weight Loss Programs:
b1 b2 b3 b4 b5 b6 (56)
Jenny Craig /Weight Watchers ..................
41. Credit Cards:
b1 b2 b3 b4 b5 b6
Visa/MasterCard ................................
42. Personal Computers:
b1 b2 b3 b4 b5 b6
IBM/Compaq ..............................................
43. Rental Cars:
b1 b2 b3 b4 b5 b6
Enterprise/Hertz ................................
44. Cola:
b1 b2 b3 b4 b5 b6
Coke/Pepsi ................................................
45. Banks:
b1 b2 b3 b4 b5 b6
Citibank/Bank of America...........................
46. Cars:
b1 b2 b3 b4 b5 b6 (63)
Toyota/Honda ............................................
47. Political Parties:
b1 b2 b3 b4 b5 b6
Democrat/Republican…………….
48. Religions:
b1 b2 b3 b4 b5 b6
Catholic/Protestant……………….
79[01]80
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© Market Facts 2000
SECTION 1: BRAND SIMILARITY (continued)
2. In this next question, rather than give you specific brand names, we have simply listed
categories of products and services. For each category, please think about the different
brands within that category, and how different or similar these brands are from each other
now compared to a few years ago. Have the brands in this category in general become
more similar or more different?
On the scale below, “5” indicates that brands in this category have become much more similar
to each other in the past few years and “1” indicates they have become much more different.
5 = Brands in this category have become much more similar to each other in the past few years
4 = Brands in this category have become somewhat more similar to each other in the past few
years
3 = Brands in this category have not changed in the past few years in how different or similar
they are to each other
2 = Brands in this category have become somewhat more different from each other in the past
few years
1 = Brands in this category have become much more different from each other in the past few
years
Please indicate your opinions by X’ing one box across for each of the following categories.
"X" “Don’t Know” only if you are completely unfamiliar with any brands in this category.
Hotels ....................................................... b 1 b2 b3 b4 b5 b6
Department Stores................................ b1 b2 b3 b4 b5 b6
Colas ........................................................ b 1 b2 b3 b4 b5 b6
Athletic Shoes........................................... b 1 b2 b3 b4 b5 b6
Weight Loss Programs ............................. b 1 b2 b3 b4 b5 b6
Luxury Foreign Cars ................................ b 1 b2 b3 b4 b5 b6
Rental Cars............................................... b 1 b2 b3 b4 b5 b6
Fast Food Restaurants ............................. b 1 b2 b3 b4 b5 b6
Liquor........................................................ b 1 b2 b3 b4 b5 b6 (26)
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SECTION 1: BRAND SIMILARITY (continued)
Diapers .....................................................b 1 b2 b3 b4 b5 b6
Newspapers..............................................b 1 b2 b3 b4 b5 b6
Auto Insurance..........................................b 1 b2 b3 b4 b5 b6
Pet Supply Stores ................................ b1 b2 b3 b4 b5 b6
Office Supply Stores ................................b 1 b2 b3 b4 b5 b6
Internet Service Providers .........................b 1 b2 b3 b4 b5 b6
Headache Remedies................................b 1 b2 b3 b4 b5 b6 (48)
Jewelry......................................................b 1 b2 b3 b4 b5 b6
Mid-Priced American Cars ........................b 1 b2 b3 b4 b5 b6
Internet Search Engines............................b 1 b2 b3 b4 b5 b6
Bottled Water ............................................b 1 b2 b3 b4 b5 b6
Book Stores ..............................................b 1 b2 b3 b4 b5 b6
Banks........................................................b 1 b2 b3 b4 b5 b6
Cigarettes .................................................b 1 b2 b3 b4 b5 b6
Toothpastes ..............................................b 1 b2 b3 b4 b5 b6 (56)
Political Parties……………………... b1 b2 b3 b4 b5 b6
Different Christian Denominations.. b1 b2 b3 b4 b5 b6
79[02]80
3. When buying different products and services, some people shop for the product or service
which offers the lowest price, while others focus more on the brand name. Below you will
see a list of different types of products and services. As you read each one, please
indicate the relative importance of low price and brand name when making a purchase in
this category.
On the scale below, “5” indicates a low price is much more important than brand name and “1”
indicates the brand name is much more important than a low price.
Please indicate your opinions by X’ing one box across for each of the following categories.
"X" “Don’t Know” only if you never purchase this type of product or service.
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Spaghetti Sauce...................................... b1 b2 b3 b4 b5 b6
Headache remedy ................................... b1 b2 b3 b4 b5 b6
Internet service provider (ISP) ................. b1 b2 b3 b4 b5 b6
Liquor ...................................................... b1 b2 b3 b4 b5 b6
Beer......................................................... b1 b2 b3 b4 b5 b6
Long-distance telephone provider ........... b1 b2 b3 b4 b5 b6
Brokerage................................................ b1 b2 b3 b4 b5 b6
Athletic shoes .......................................... b1 b2 b3 b4 b5 b6 (32)
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© Copernicus 2000
© Market Facts 2000
SECTION 2: BUYER TYPE (continued)
Now, for a change of pace, please think about the upcoming presidential elections.
4. How likely are you to vote in the November presidential election? (“X” ONE BOX)
b1
I will definitely vote ................................
(53)
b2
I am very likely to vote................................
b3
I am likely to vote ................................
b4
I am not very likely to vote................................
b5
I will not vote ................................
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© Market Facts 2000
5. If you do vote in November, who will you vote for President? (“X” ONE BOX)
b1
Pat Buchanan, Reform Party ................................
b2
George W. Bush, Republican Party................................
Al Gore, Democrat Party................................ b 3
b4
John Hagelin, Reform Party................................
Ralph Nader, Green Party ................................b 5
Other................................................................b 6
b7
I will not vote ................................................................ (54)
THANK YOU!
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© Market Facts 2000