Your brand is no different to any other, and neither are your consumers. These were some of the main takeaways from a recent session hosted by Ebony + Ivory.
The company’s head of strategy, Andrew Barnes summarised what he learnt from reading research from the Ehrenberg-Bass Institute for Marketing Science in Australia, entitled ‘How brands grow’.
Marketing theories through the ages
Barnes took a trip through the history of various marketing models. The Business Values Model reduces all data to three dimensions: product superiority, operational excellence and customer centricity.
Simon Sinek’s model looks at more steps than simply asking ‘why a brand exists’. This core position is the starting point, with brands aligning themselves to a cause or trying to add value to people’s lives, but there are other important factors that need to be considered.
He also touched on the seven dimensions of advertising communication.
“Targeting a specific group of consumers often doesn’t work, according to the research, because your user base, as it grows, will become closer and closer to the total population,” said Barnes, touching on the Ehrenberg-Bass Institute research. says, Barnes stated,
First law – Double jeopardy
“Bigger brands have more loyal buyers, less switchers and are bought more frequently … If you want to grow loyalty, there’s only one way to do it, grow market share,” he commented.
This is because bigger brands have lower defection rates (people abandoning purchasing the brand). They also get bought more often.
“The current emphasis on targeted marketing, CRM, and loyalty programmes contradict real world elements. It’s essential to acquire new customers all the time to simply maintain a brand
“The only thing that impacted growth was acquisition rates. The rest does not impact brand growth,” he added.
Second law – Buyer moderation
A focus on light buyers of your products was crucial as they could transition to heavy ones. AC Nielsen panel data, across a host of brands, displayed the validity of this law.
This was contradictory to the Pareto Law 60/20, which posits that 20% of your customers will buy 80% of products. “It is simply not true. It has distracted marketers from what we should be doing, because we think that 20% of our customers are really important because they’re buying so much. But they’re not buying that much,” Barnes stressed.
He added that the bottom line was, “If you want consumers to buy more products, you need to grow market share” and he advised, “Don’t bother with loyalty programmes, because they don’t hit the long tail”.
Third law – Brand distinctiveness
While every brand thinks that they have differentiating factors that makes them stand out to consumers, the research suggested that there really are none of these. An example of fast food outlets was used. They all sell cheese burgers, which are all fairly standard, so why does one stand out from the other? Could it be the selling price?
“Price is not really a clear differentiating point between brands. It’s not a motivation to buy. Research has said consumers look at differentiators, but most choose a brand not because they think it’s different, but because of salience and distinctiveness,” Barnes explained.
On average, a supermarket sells 30 000 different brands. What really caused brands to rise above the clutter was their mental availability, built through distinctive qualities that increase visibility and make the brand easier to notice, recognise, recall and buy.
“Create distinctive assets such as sounds, characters, colours, logos, fonts, shapes; and forget about trying to find unique characteristics,” Barnes concluded.
Physical availability was another vital component, ensuring your brand is on the ground in relevant spaces. McDonald’s is so successful because the brand seemed to have a restaurant on every corner.
Another key point to take out of the presentation is that very few companies spend enough on advertising or create the quality needed to significantly increase market share. Mostly advertising is out there to prevent a decline in sales.
Here are some pictures from the presentation:
Michael Bratt is a multimedia journalist at Wag the Dog, publishers of The Media Online and The Media. Follow him on Twitter @MichaelBratt8