Marketing Letters (forthcoming)

Kunter Gunasti and Berna Devezer

In a recent research forthcoming at Marketing Letters, Dr. Gunasti and his co-author show that consumer choices among different models of a brand name can be affected by exposure to a competitor brand name that forms an incidental trend with the numbers in the focal brand names. For instance, a consumer shopping for a Mercedes and trying to choose between a Mercedes C330 vs. C340 can be exposed to a competitor brand such as a BMW 320i, which increases the chances that he will leave the store with the higher number focal brand Mercedes C340. Although the competitor brand is not even available to choose and it is not considered, its mere presence seems to affect consumers’ focal choices.

Dr. Gunasti proposes two mechanisms for this interesting effect. First, even when no attribute information is available, exposure to a competitor brand can make the numerical trends formed by the brand names salient and meaningful (i.e., 320i, C330, C340), and increase the preference for the focal brand with the higher number (e.g., C340). Second, when attribute values are negatively correlated with the numbers in brand names, exposure to the decoy competitor brand name can trigger a brand-attribute magnitude tradeoff. For instance, an 8-inch NB-5600 tablet can be preferred over a 9-inch NB-3400, when consumers are exposed to a 7-inch TR-6800 competitor brand, because consumers inadvertently compare the sizes of the tablets with their brand numbers.

In five studies with four different products, it is shown that the observed effect depends on whether the non-focal brand is categorized as a competitor. For example, exposure to a Ford Explorer 350 or a Mercedes ML350 SUV, which are not direct competitors of the Mercedes C-series, does not affect the focal choice between C330 vs. C340, whereas exposure to a well-known competitor such as BMW350i shifts the choices in favor of C340.