Is Brand Loyalty a Disease?

  Meyer Benjamin

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 27 Mar, 2019



Car Brand Loyalty in South Africa

Auto industry supremo Meyer Benjamin on the infectious myths that can govern our buying decisions…

A combination of Bill Gates, Socrates, and Hugh Hefner.

That's King Solomon, to whom much of Proverbs – among other things – is ascribed.

And as he wrote over two millennia ago:

“There are three things that are too amazing for me, four that I do not understand: the way of an eagle in the sky, the way of a snake on a rock, the way of a ship on the high seas, and the way of a man with a young woman.”

To that list, to contemporise things, you could add brand loyalty.

Indeed, in the 21st Century this vies as one of the most abiding mysteries known not just to marketers but to mankind.

Now, of course, tomes abound around the subject. But what it crystallises into is repeated, entrenched behaviour, behaviour that like a disease can be contagious and even crippling.

Let’s look at car buying where consumer behaviour is often entrenched, and where the market can feed on preconceptions and prejudices, myth and misinformation.

A brilliant case-study is Citroen.

In 2017 over a million new Citroen found new homes globally. Yet in 2016 the marque left South Africa – preceded by the exit of the likes of Daihatsu, Dodge and Chrysler, none of them exactly fringe brands – having sold around 440 vehicles in total that year. Total!

And despite the local motoring media and (the few) buyers loving their cars, clearly brand loyalty, and more specifically brand loyalty as a disease, was at play here with all the elements of contagion.

Who, after all, hasn’t heard those bumbling, braai-side bellows of “Citroens being soft” or often-apocryphal tales of owners having to wait half-a-year for, oh, a water pump?

The Peugeot part of the Peugeot Citroen brand remains.

These are good cars.

Yet last month (February) SA sales of this marque whose cars date back to the late 19th Century numbered...55. Contrast this with King Toyota which registered local sales of 4 825 passenger vehicles in the same month. Perhaps this is not an entirely fair comparison as obviously Toyota's range – from small cars to SUVs – is far more catholic than Peugeot's.

Yet that means one OEM outsold another by almost one hundred to one.

But as brilliant as Toyotas are, the SA market is also generationally conditioned to buy and champion these vehicles – something that in turn reflects in resale values, which we’ll get to in a second.

Now I just recently took a Nissan Almera for a drive. It stunned me. It might be a little low on aesthetics and urge and excitement – which is not something buyers seek in the sensible sedan category anyway. But on practicality and perceived quality it was easily up there with the Toyota Corolla Quest, and the Almera's legroom is limo-like. Almost.

Yet last month 715 Quests found new homes versus 253 Almeras, despite the latter being about R1 000 cheaper. Not because the Corolla Quest is inherently a better car. But rather on the strength of its badge, which to generations of South Africans speaks of reliability, robustness, and resounding resale values.

And that takes us to the latter, with certain marques crashing in value retention often almost purely on preconceptions and self-fulfilling prophecies. Yet other marques engineered to identical global standards will depreciate only minimally.

Curiously and conversely, however, the consumer market can sometimes see sense. Mazda, for instance, has soared in South Africa. It might have taken buyers a few years to realise that its new-generation cars are a quantum leap over the basic 323's of yore, with modern Mazdas being decidedly premium. But sales have doubled over half a decade or less, consistently sitting at over 1 000 units a month.

The same goes for Suzuki. Here in Mzansi it was the SJ410 jeeplet of the Eighties that made us realise that there was more to the marque than motorcycles. Then with the establishment of Suzuki Auto SA as a subsidiary of the Japanese mother ship, and the introduction of the Swift and SX4 last decade, the brand really started to gain traction.

Now with a vast range from the little Celerio upwards, sales are also around 1 000 a month – although there are still some anomalies within the range, with the outgoing Ertiga MPV selling just five units (admittedly on the runout) against 359 Toyota Avanzas last month. But the new Ertiga is a vastly improved car, and I predict that its sales will soon match or even eclipse those of the worthy Avanza.

I also predict that Suzuki sales overall will continue to soar. Especially with ongoing petrol price increases and new fuel levies kicking in, and economy – something Suzukis excel at – becoming an ever-more vital part of the buying decision. And lest anyone cries “conflict of interest” I am indeed the Director of the IPOP Motor Group, which includes four Suzuki dealerships, plus a Haval and a Mazda one.

But I focus on Suzuki particularly as it illustrates that while brand loyalty can be as infectious and debilitating as a disease, effectively killing off some OEMs, at other times it can be channelled to conquest sales and perhaps, even common sense.

As Solomon was saying about things that amaze and defy understanding all those centuries ago...



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