New brands face uphill battle: two-thirds prefer familiarity
Almost two-thirds of consumers prefer to buy products from familiar brands rather than switch to new brands, a global study has found, quantifying a common factor in the ‘new brand versus new brand extension’ decision process.
Nielsen’s ‘New Product Purchase Sentiment’ survey, which polled 29,000 internet users in 58 countries, found 60% of consumers prefer buying new lines from a known brand instead of an untested equivalent, supporting the argument for brand extensions.
Innovating on established brands that are already trusted by consumers can be a powerful strategy, says Rob Wengel, senior vice president of Nielsen Innovation Analytics.
“Companies spend millions of dollars on new product innovation, yet two out of every three new products will not be on the market within three years,” Wengel says. “Consumers are enthusiastic about adopting new product innovations but somewhat apprehensive about embracing new brands.”
Exactly half of online consumers globally are open to switching to new products, with people in North America, the Middle East, Europe and Africa more receptive to switching than those in Latin America.
Proof of concept and value make a difference when considering change with more than two-thirds (64%) saying they would consider value or store-brand options, while three in five (60%) prefer to wait until a new innovation has proven itself before trialling.
For some, economic factors play a role in trial decisions, with 45% reporting that challenging economic conditions make them less likely to try a new product. However, for others, innovation can command a price premium, with 39% indicating a willingness to pay more for a new product.
“In order for consumers to adopt new brands, marketers need to launch very strong awareness and trial-building campaigns, supported by a positive product experience,” Wengel adds.
A mix of word-of-mouth communication, traditional advertising, and internet activity is the most persuasive way to drive awareness of new products, according to the research, highlighting the importance of a mixed media approach.
While 77% of global respondents say word-of-mouth advice from family and friends is the most persuasive source of new product information, active internet searching (67%) and traditional television advertising (59%) also remain influential.
Globally, respondents say the internet is very or somewhat important when making a new product purchase decision for food and beverages (62%), personal hygiene categories (62%), personal health/ over-the-counter medicines (61%), and hair care categories (60%).
“Ensuring consumers are aware of the product and can find it on store shelves is just as critical as coming up with that winning new product idea,” Wengel concludes.