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Black Consumers and Brand Loyalty - US - December 2015

Black Consumers and Brand Loyalty - US - December 2015

"Black consumers are very brand conscious and typically use some of the same trusted brands that their parents used. While cost plays a role in the brands they buy, they aren’t willing to give up quality and brand name for the lowest price. As a result, they tend to be very brand loyal."

- Tonya Roberts, Multicultural Analyst

This report discusses the following key topics:

Emotional connection is often missing from brand messaging
Bad experiences are deeper than poor quality, higher prices – How Blacks are treated counts


OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY
There’s a slice of the brand loyalty pie for everyone, it depends on brand’s strategy
Figure 1: Brand loyalty segments, September 2015
The issues
Figure 2: Word association with brand loyalty – Word cloud, September 2015
Figure 3: Top five things that trigger Blacks to switch brands, September 2015
The opportunities
Figure 4: Brand loyalty drivers – Promoter, September 2015
Figure 5: Brand loyalty drivers – Purchase for others, September 2015
Figure 6: Black advertising receptivity segments, by brand loyalty segments, May 2014/September 2015
What it means
THE MARKET
What you need to know
Population and buying power is growing faster than that of Whites
Brands need evangelists to sing their praises
Different strategies and messaging needed to attract diversity of segments
The size of the prize
Growing faster than Whites in population and buying power
Black households outnumber other multicultural groups, most headed by women
Figure 7: Number of households in US, by race/Hispanic origin of householder, January 2015
Brand loyalty segments
Different marketing messages required to reach each segment
Figure 8: Brand loyalty segments, September 2015
Ambassadors
Figure 9: Psychographic overview of the Ambassadors segment, September 2015
Devoted Penny Pinchers
Figure 10: Psychographic overview of the Devoted Penny Pinchers segment, September 2015
Savvy Brand Seekers
Figure 11: Psychographic overview of the Savvy Brand Seekers segment, September 2015
Market perspective
Black men are an untapped market, low-hanging fruit
Word of mouth speaks volumes
Momma knows best
Still the forgotten generation: Generation X
Figure 12: Reasons for brand loyalty, by generation, September 2015
KEY PLAYERS
What you need to know
Blacks want to be engaged with brands, either events or promotions
Brands can tap into loyalty segments for the right fit
What’s working?
Brand integrations and exclusive offers
Figure 13: Chase Sapphire cardholder promotion, 2015
Figure 14: Chase Freedom cardholder promotion, 2015
Gift card promotions
Figure 15: Target gift card promotions, 2015
Experiential VIP rewards
What’s struggling?
Private labels struggle to get their labels not so private
The total market approach, Blacks still powerful piece of the pie
What’s next?
More experiences…VIP events, sneak peeks, exclusive offers
Brands highlighting ethical practices
THE CONSUMER
What you need to know
The vast majority of Blacks are brand loyal and brand conscious
Price is a key driver, but not at the sacrifice of quality and trust
Blacks expect brands to court them, make them feel appreciated
Share of brand loyalty
Six out of 10 times, Blacks know what’s going in the cart before they even go to the store
Figure 16: Share of brand loyalty (mean % of purchases based on brand influence), September 2015
Brand loyalty stronger among older generations
Figure 17: Share of brand loyalty (mean % of purchases based on brand influence), by generation, September 2015
Hook, line, and sinker: Reeling in the Ambassador segment means catching the big fish
Figure 18: Share of brand loyalty (mean % of purchases based on brand influence), by brand loyalty segments, September 2015
The DNA of brand loyalty
Rational factors still drive loyalty, but emotional factors weigh in
Figure 19: Word association with brand loyalty – Word cloud, September 2015
Blacks seek products that are good for family, those they grew up with
Figure 20: Word association with brand loyalty, September 2015
Men more driven by brands they grew up on and attractiveness
Figure 21: Word association with brand loyalty, by gender, September 2015
Young Blacks drawn to attractive, friendly, compassionate brands
Figure 22: Word association with brand loyalty, by age, September 2015
Nearly 8 in 10 Ambassadors choose brands for emotional reasons
Figure 23: Word association with brand loyalty, by brand loyalty segments, September 2015
Brand loyalty drivers
Customer service makes or breaks the deal – trumps trust and reliability
Figure 24: Brand loyalty reasons and related switching triggers, September 2015
Majority willing to pay more for their favorite brands – unless they raise their prices without notice
Figure 25: Impact of price on brand loyalty, September 2015
Getting to know Blacks is half the battle to boost brand loyalty
Figure 26: Impact of personal relevance on brand loyalty, September 2015
Major differences among loyalty segments in what drives brand loyalty
Figure 27: Brand loyalty drivers, by brand loyalty segment, September 2015
Switching triggers
Poor quality and service likely to impact trust, key reasons to switch
Figure 28: Reasons for switching brands, September 2015
Women more likely to pull the switch due to poor quality, unreliability
Figure 29: Impact of quality and reliability on switching brands, by gender, September 2015
Price isn’t everything, but some switch for better value
Figure 30: Impact of price, convenience and ease of use on switching brands, by gender, September 2015
Trust and credibility help to secure loyalty and appreciation
Figure 31: Impact of business practices on switching brands, by gender, September 2015
Older Blacks are more sensitive to quality and reliability
Figure 32: Select reasons for switching brands, by age, September 2015
Ambassadors least likely to switch due to higher prices
Figure 33: Reasons for switching brands, by brand loyalty segments, September 2015
Brand advocacy
Blacks are very brand name conscious, higher trust and quality perceptions
Figure 34: Attitudes toward brand names, September 2015
Devoted Penny Pinchers open to less-known brands as long as they have longevity
Figure 35: Attitudes toward brand names/older versus newer brands, by brand loyalty segments, September 2015
Devoted Penny Pinchers least likely to be brand advocates
Figure 36: Impact of word of mouth, September 2015
Figure 37: Importance of word of mouth, by brand loyalty segments, September 2015
Blacks spread the love, buy favorite brands for their circle to try
Figure 38: Brand advocacy – Purchase for others, September 2015
I buy – you try, Ambassadors segment takes brand advocacy up a notch
Figure 39: Brand advocacy – Purchase for others, by brand loyalty segments, September 2015
Impact of advertising and promotions
Coupons highly effective among all loyalty segments
Figure 40: Impact of coupons on brand loyalty, September 2015
Figure 41: Impact of coupons on brand loyalty, by brand loyalty segments, September 2015
Sales don’t motivate Ambassadors to buy products
Figure 42: Impact of sales on buying habits, September 2015
Figure 43: Impact of sales on buying habits, by brand loyalty segments, September 2015
Targeted advertising…there’s more than meets the eye, it’s powerful!
Figure 44: Impact of community involvement on brand loyalty, by gender, September 2015 and May 2014
Blacks want to see people who look like them in ads, doing things they would do
Figure 45: Impact of targeted advertising on brand loyalty, by gender, September 2015 and May 2014
Cultural relevancy more important now more than ever before
Figure 46: Attitudes and receptivity to targeted advertising, by generation, May 2014
Beauty and personal care has higher ad recall and portray Blacks more positively
Figure 47: Ad recall and impact of targeted advertising, by industry, May 2014
APPENDIX
Data sources and abbreviations
Data sources
Terms
RESEARCH METHODOLOGY
US Multicultural Methodology
Consumer research
Trade research
Statistical Forecasting

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