Brands as Beacons: A New Source of Loyalty to Multiproduct Firms

Vol. XLI (May 2004), 135–150 135 *Bharat N. Anand is an associate professor, Harvard Business School (e-mail: [email protected]). Ron Shachar is Professor of Marketing and Economics, Faculty of Management, Tel-Aviv University (e-mail: [email protected]). The authors are grateful to Dmitri Byzalov for outstanding research assistance and to Luis Cabral, Zvi Eckstein, Tülin Erdem, Wagner Kamakura, Ariel Pakes, Peter Reiss, Michael Schwarz, and seminar participants at the American Economic Association meeting (in Washington) as well as at Tel-Aviv University, Harvard University, and Yale University for helpful comments. The phrase “brands as beacons” is borrowed from the former Bertelsmann chief executive officer Thomas Middelhoff, who, in a 1998 speech, speculated on the increasing importance of “brands as beacons in the fog of choices.” BHARAT N. ANAND and RON SHACHAR*