How Brands Grow Part 2 is a follow-up to the very popular first book, and presents more information and data on the concepts introduced. So it’s more of the same, but if you enjoyed the first book, you will probably like this one as well.
Specifically this second part looks at building mental availability and distinctive assets, word-of-mouth, ensuring physical availability, and online sales. The cases are a bit more diverse as well with more examples from services, luxury brands and emerging markets.
Book Summary & Notes
All text that is quoted & italicized is taken directly from the book.
As brands lose or gain market share, their loyalty metrics also move simultaneously. Brands do not develop high loyalty before they grow, and brands that are about to decline do not have out of the ordinary loyalty rates.
As brands grow, their distribution of buyers (from light and infrequent buyers to heavy and frequent buyers) stays exactly the same: they will just have more of both categories.
Target marketing is not clever – focusing on a small section of the market (because that’s where the brand is “differentiated”) is useless because in real life rival brands will sell to the same customers. The personification of target groups is listed as a dangerous practice.
Loyalty metrics have not really changed over time: there never was a period when people were religiously buying a single brand.
With the duplication of purchase law (the biggest brand in the market will be bought by most of your customers, a small brand in the market will also be bought by a few of your customers) can also show the customer overlap with competitors. “That means that if, in a particular time period, 20% of all the people who bought fuel at Shell in the UK also bought from BP, then 20% of customers from other fuel retailers will also have bought from BP.”
Buying a brand usually takes little effort. We draw upon our memory to helps us make a choice, but these are usually: 1) instantaneous without much thinking, 2) influenced by context (how was the memory triggered), and 3) inconsistent since what we retrieve from our memory today might not be the same tomorrow.
Category entry points (CEPs) are common cues or thoughts that helps buyers identify brands in certain buying situations. Attaching your brand to these memory structures will make it more likely to sell during certain occasions. E.g. buying a gift and whisky brands?
In advertising it’s key to take these CEPs into account: which CEP does the ad intend target (and is it obvious to the consumer)? Is it a CEP that occurs often and for many people (if not, then the ROI will be low)? Is it a CEP that was promoted in the past (building on existing memory structures)?
If people develop feelings about brands they’re usually quite weak. Little evidence exists that this matters in the buying process, and so marketers should not pay too much attention to it.
Choosing distinctive assets: check the practicalities (media mix), brand history (something you can use from the past?), check the numbers (investigate the fame & uniqueness of each asset – the distinctive asset grid).
How to execute distinctive assets well:
- Reach all category buyers
- Establish clear links between the brand and the asset
- Execute consistently
- Brand first, variants second (the brand stays but product variants come and go)
- Don’t go overboard with mission/meaning (brand should be the strongest)
- Ideally brand identity should be independent from current positioning – so it can be adjusted in the future, and so the memory links can be continuously build upon.
Changing the packaging of a product is a tactical error since it’s never buyer friendly. It means that buyers have to search harder to find your product again (assuming they will).
Simply steps to build a strong brand identity
- Select a palette that gives the brand “neurological richness”
- Measure the distinctive assets (don’t trust your own judgment)
- Check which assets make the brand stand out in a shopping environment + make sure you design assets with this in mind
- Ensure consistency of all assets
- Distinctiveness is not differentiation
- The strongest asset should always be the brand name
- Don’t look at current positioning for distinctive assets – think long-term
- Don’t change packaging if you can avoid doing it
Reach should be the main objective of advertising. For small brands this is also important, although they will most likely be restricted due to physical availability. There’s no need to work in frequencies of threes, although the more exposure, the better the results. Multi-exposure ads are risky since it relies on people watching all of them. It’s better to plan continuous reach rather than doing bursts, or matching competitive bursts.
Media behaviour also has a double jeopardy law. The bigger the audience of a media, the more often and longer it will be used. This is why, if you have a large media property, it makes little sense adding a small-reach property -> it’s duplication, and does not add reach.
Media strategy should aim to: 1) Reach the biggest audience as possible (light buyers), 2) Understand that small media properties attract heavy media users, meaning that investment in those platforms prioritizes frequency over reach, and 3) Do a duplication analysis if the goal is a multi-platform campaign (which platforms have the least duplication?)
Positive word of mouth is more common than negative word of mouth. Most products work as they should. Positive word of mouth is also more useful: people would rather get advice on what to get than what to avoid.
Three components of physical availability.
- 1) Presence: are you where you should be? (Goal is to minimize the times when buyers buy the category, but can’t find your brand)
- 2) Relevance: are you buyable? (Meaning that you have a product range that matches with the category’s buying occasions, and that break down any barriers to purchase such as sizing, pricing, payment options.)
- 3) Prominence: Are you easy to find? (Easy to find = easy to buy, consider the clutter most buyers find in buying locations).
New brands have lower loyalty than brands of comparable market share. This is because they usually invest heavily in mental and physical availability (and discounts), and as soon as this support stops, the number of repeat customers drop.
Luxury brands still compete in mass markets contrary to what some might think. The middle class does the buying of luxury brands because there are too few rich buyers to support the brands.
Liked this? Browse all book notes here.