The Formation of Consumer Brand Preferences

The Formation of Consumer Brand Preferences

By
Bart J. Bronnenberg, Jean-Pierre Dube
Annual Review of Economics. August
2017, Vol. 9, Pages 335-382

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 the ways in which 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.