Halo Effect

Filed Under »
Dictionary Says

Definition of 'Halo Effect'

The halo effect is a term used in marketing to explain the bias shown by customers towards certain products because of a favorable experience with other products made by the same manufacturer or maker. Basically, the halo effect is driven by brand equity.

The opposite of the halo effect is "cannibalization".

Investopedia Says

Investopedia explains 'Halo Effect'

For example, if a customer buys product C which is made by company X, not because of the attributes or benefits of the product, but because he or she had a favorable experience with product D - another product made by company X, the purchased item is said to be prospering because of the halo effect.

A classic example of the halo effect is the relationship between the Mac notebooks and iPod. When the iPod was released, there was speculation in the market place that the sales of Apple's Mac laptops would increase, because of the success of the iPod. The belief was based on the halo effect, as customers who had a great experience with the iPod would buy a Mac computer simply because it is made by Apple Inc.

Sign Up For Term of the Day!

Try Our Stock Simulator!

Test your trading skills!

Related Definitions

  1. Marketing

    The activities ...

  2. Market Cannibalization

    The negative ...

  3. Market Segmentation

    A marketing term ...

  4. Value Proposition

    A business or ...

  5. Product Differentiation

    A marketing ...

  6. Harmonized Index Of Consumer Prices ...

    A list of the ...

  7. Multi-Level Marketing

    A strategy that ...

  8. Golden Geese

    A source of lots ...

  9. Cult Brand

    A product or ...

  10. Rent-A-Crowd

    A group of ...

Articles Of Interest

  1. Understanding The Income Statement

    Learn how to use revenue and expenses, among other factors, to break down and analyze a company.

  2. Measuring Company Efficiency

    Three useful indicators for measuring a retail company's efficiency are its inventory turnaround times, its receivables and its collection period.

  3. Analyze Cash Flow The Easy Way

    Find out how to analyze the way a company spends its money to determine whether there will be any money left for investors.

  4. In Small Business, Success Is Spelled With 5 "C"s

    Incorporating these steps will help your business thrive in a competitive market.

  5. 5 Steps To A Small Business Marketing Plan

    Here are some tips for marketing your small business.

  6. 6 Tips For Spinning A PR Nightmare

    One of the most readily available measures that organizations can employ to either avoid or reduce negative publicity is to aim for transparency.

  7. How Companies Create A Brand

    We take a hands-on approach to creating a brand, and see what it can mean as an investor.

  8. 7 Popular Marketing Techniques For Small Businesses

    This guide will help you get the word out about your small business.

  9. Advertising, Crocodiles And Moats

    Memorable advertising is a brick in the fortress that keeps competitors at bay.

  10. The Power Of Branding

    It's the ultimate economic moat, and we look at the approaches and effects of good and bad branding.
Sponsored links

comments powered by Disqus
Hot Definitions

  1. Love Money

  2. Shark Watcher

  3. Judo Business Strategy

  4. Dogs Of The Dow

  5. Chinese Hedge

  6. X-Mark Signature

Recommended
Loading, please wait...
See More »
Trading Center