when consumers have positive experiences with products of highly visible brands they cognitively form a brand loyalty bias in favor of the brand and its offerings this belief is independent of a consumer s experience the reasoning is that if a company is exceptionally good at one thing it will undoubtedly be good at something else this assumption will take a brand far parlaying into other new products 
the halo effect increases brand loyalty strengthens the brand image and reputation and translates into high brand equity companies use the halo effect to establish themselves as leaders in their industries when one product positively imprints in the minds of consumers the success of that product infectiously affects other products ultimately businesses can gain market share and increase profits thanks to the halo effect even protecting consumers from purchasing from competitors if they have an all star product companies benefit from the halo effect by capitalizing on their existing strengths history of the halo effectthe concept of the halo effect can be traced back to 1920 when american psychologist edward l thorndike first used it to describe his observations of military officers who had to rank their subordinates without even communicating with the lower ranked military men many of the superiors automatically assumed that physically attractive men were smarter more capable and had more leadership qualities than the other men in thorndike s paper the constant error in psychological ratings he noted that one impression can create a halo effect that they are more likely to prescribe to an individual s other qualities as well 1special considerationsit isn t easy for a company to achieve brand loyalty and build a halo effect for their wider set of products or services after all this can be somewhat of an elusive gold standard that only a number of household brands name possess however companies that focus on making their products cult products or achieve cult status are more likely to benefit from the halo effect on subsequent products they release often these companies funnel all their efforts into one superior product and become known for it before then expanding to other kinds of products an easy way to take advantage of the halo effect is by hiring a celebrity ambassador to promote a product when an endorsement from a popular celebrity for example george clooney is secured their positive image can be lent to the brand or product and looked upon favorably if george clooney endorsed it it must be good of course traditional ways of achieving the brand halo effect can be achieved through developing a curated social media presence to improve a brand s external image reach and visibility as well as focusing on the product and user experience itself can all help a brand develop a halo effect advantages and disadvantages of the halo effectthe halo effect can be a double edged sword if a brand has an extremely positive perception this can extend into its new products and boost customer retention and loyalty however a halo effect doesn t make a brand untouchable either have one bad experience with a brand and consumers will swear it off altogether the well known marketing case of classic coke vs new coke is an example of how tinkering with a beloved halo brand can turn disastrous despite being a cult product coca cola thought that it needed to rebrand its classic product in 1985 by releasing new coke to taste sweeter and more like pepsi then beginning to close the gap as coca cola s nearest competitor although the sweeter new coke formula had been proven by data in blind taste tests the company underestimated the emotional attachment that loyal coke drinkers had to the original formula they were enraged and quickly coca cola announced that it would revert back to its original formula the halo effect and brand image of coca cola were put at risk with the introduction of the new formula showing that a halo effect must also be intentionally maintained halo effects create strong brand loyalty and consumer retentionconsumers are willing to pay more money for a brand they already know and trustsubsequent new products by a brand will benefit from the brand s halo effectthe halo effect can extend negative impressions too known as the horn effect maintaining a brand s halo effect can also be challengingbrand image can be a make it or break it factor in a product s success making the halo effect a more elusive factor to controlexample of the halo effectthe halo effect applies to a broad range of categories including people organizations ideas and brands for example apple aapl benefits significantly from the halo effect with the release of the ipod there was market speculation that the sales of apple s mac laptops would also increase due to the success of the ipod figuratively a halo forms and extends over the brand it effectively allows for the expansion of product offerings for example apple s ipod success allowed for the development of other consumer products such as the apple watch iphone and ipad if the following product pales in comparison to the leading product the success of the leading product will help to compensate for the failure rather than leading to a total shift in brand perception this brand extension helps brands like apple to remain a beloved technology giant even despite other failures for example to date very few people remember the company s flops airpower or the apple newton this phenomenon of one product favorably impacting another such as is the case with apple is considered a near perfect example of the halo effect the ipod buyers just kept coming back and consequently iphone sales have been steady continuing the cycle the bottom linethe halo effect when achieved can be one of the most powerful assets to a brand as it increases brand strength brand loyalty and increases brand equity ultimately achieving this cult status is no easy feat 