Marketing is a creative science. So is architecture. Architects design masterpieces, but they apply creativity within the set of rules and physical laws. Architects should design building structures that do not fall under these rules.
Unlike architects, many marketers, even senior marketing academics, like to say that there is no consistent marketing laws. These marketers believe that customer behavior is too personal and unpredictable, while research has shown that this is meaningless. This false belief will stop academics from studying and investigating patterns of buying behavior and marketing effects.
As a result, organizations carry out anything in the name of a marketing plan. Byron Sharp’s book, How Brands Grow, provides predictable patterns of how buyers buy and sales grow. Patterns that all marketers need to know and there is no doubt about them.
These patterns are valuable knowledge. Because it’s often assumed that having a good marketing strategy is obvious and can be easily perceived by everyone. But in reality, the true knowledge of marketing gives you the ability to act better than competitors, while others wonder how you are doing well in the market. In fact, this book is for marketers who want to learn new findings based on classical science and to get rid of unfounded conviction accepted as marketing theory.
Before reading the rest of the article, please answer the following questions about some marketing assumptions:
|Strategic Assumption||True, False, or Don’t Know?|
|Differentiating our brand is a vital marketing task?|
|Loyalty metrics reflect the strength, not size, of our brand?|
|Customer retention is cheaper than acquisition?|
|Price promotions boost penetration not loyalty?|
|Who we compete with depends on the positioning of our brand image?|
|Mass marketing is dead, no longer competitive?|
|Our buyers have a special reason why they buy our brand?|
|Our consumers are a distinctive type of person?|
|Our heaviest 20% of customers deliver at least 80% of our sales?|
If you believe that most of the above assumptions are correct, the empirical evidences in Sharp’s book show that you are acting on the basis of inappropriate marketing assumptions; and if these evidences are able to change your assumptions, then you may be subject to fundamental changes in your marketing processes.
Sharp’s empirical evidences can be applied across many categories and vertical markets, including FMCG, banking, finance, airline and many loyalty programs. Since all the contents of the book are not included in this article, it has been attempted to introduce a summary of the book and its objective results.
In short, decades of research on buying behavior and competing brands, which was reflected in the book, has led him to the surprising results as follows:
This is very clear and apparently all confirm it. But many marketing managers focus on customer loyalty and retention. Notice that loyalty is primarily a function of habit; and customers are loyal to repertoire (a set of skills and behaviors that a person uses habitually) not brands. Moreover, according to the Double Jeopardy rule, as far as penetration rate (penetration rate is the percentage of households that have purchased a brand in a given year) is low among buyers, their purchase frequency is low too. So do not be afraid of loyalty. Find more customers and be sure that loyalty is achieved as a result. This means that finding more customers should be the main goal of your brand strategy.
Get over exciting micro-targeting, segmentation and creating profiles. The light category buyer, which is considered by many to be undervalued, is the best option for playing the penetration game on the brand. Why? Because most customers in FMCG markets are light category buyers, so you’re more likely to put them on your list. Try to figure out how you can get to these buyers. In general, target the whole market of shoppers, not an arbitrary segment found only in a groundless segmentation analysis. In other words, simplify the subject and forget the complex analysis of segmentation and targeting.
Although brands are usually slightly differentiated, they tend to compete with other brands that are quite similar to each other. Conversely, their popularity and consequently their market share are different. In his article, based on empirical researches, Sharp challenges the importance of differentiation in brand strategies and shows that there is a low level of perceived differentiation among competing brands. Nevertheless, customers still buy these brands. This made him doubt the importance of differentiation and instead put distinctiveness at the center of brand strategy- that is to say, competing brands make themselves easier to identify by building unique associations, namely distinctive brand assets.
More importantly, Differentiation (the advantage or the reason to buy for the customer) and Distinctiveness (the uniqueness of a brand) are two different concepts. This difference is not related to the science of terminology or semantics, as any judge or lawyer will tell you the same. Distinctiveness (branding) is legally defendable, while Differentiation is not able to be protected (except for the limited time during the patent protection period).
Growth and Competition between brands are mainly due to the creation of two market-based assets: physical presence and mental availability. In fact, brands that are easier to buy will have more market share (both for more people and in more situations). Innovation and differentiation (when they work well) can build these brand assets, which will last after being copied by rivals. Sharp summed up the real challenge of developing a brand in the two above-mentioned concepts. This means that no marketing activity should be considered as a goal unless maintaining or upgrading mental and physical availability.
Therefore, marketing managers should improve their branding and reach a large number of customers, especially light category buyers. Marketing managers must investigate what their distinctive brand asset is (including color, logo, font, packaging, tagline, celebrity confirmation, etc.); and then manage the media, advertising, and distribution network with this knowledge.