Little loyalty in hospitality too

A new study looking at hospitality industries sticks a dagger into our conventional belief in brand differentiation.

Professor Michael Lynn of Cornell University pulls data from airlines, restaurants, cruise lines, and hotels to show that, on the whole, shoppers treat different brands as roughly interchangeable. And because most people buy across most brands in a category, brands don’t really have different shopper profiles.

Although shoppers sometimes show some loyalty, it’s idiosyncratic. Mostly we ‘shop around’.

This is strong medicine for those of us who’ve lived for years in a bath of brand differentiation, brand essences, and brand equity onions. But it actually makes intuitive sense based on how brands compete.

As Lynn says, the real choice drivers for a category are pretty limited and well-known. (E.g., restaurants must deliver on food quality, service, atmosphere, cleanliness, and reputation.) Consequently, “competition insures that all of the long-term competitors vying for a market meet those criteria, else they would have disappeared.”

In other words, big brands win because they deliver the basic category attributes pretty well, to lots of people — not because they’re so ‘differentiated’. It makes sense: the largest hotel chains are the most ‘generic’; only small boutiques can be really different.

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