Why do consumers prefer one brand over another? The economics and sociology of brand competitiveness

In this paper, we introduce mathematically a formal definition of brand competitiveness. We propose a unified formal framework, where agents, in choosing a brand, have both economical and sociological motives (consistent with the behavior of both Homo economicus and Homo sociologicus). In particular, we take into account four key characteristics of a brand: (i) price, (ii) quality, (iii) peer recommendations, and (iv) the effectiveness of the firm's marketing campaign. Brand competitiveness is shown to depend on these dimensions and on consumers' sensitivities to them. The formal definitions and analysis we provide can be used in future empirical work to test the emerging construct of brand competitiveness, as well as its antecedents and effects. Our paper demonstrates the value-adding synergies associated with the combination of economics, sociology, and strategic brand management.