Nigel Hollis, Chief Global Analyst, Kantar, wrote an article titled Brands need to build more than just salience to grow (3 August 2020).
« The Ehrenberg-Bass Institute asserts that the recipe for growth is to build a brand’s penetration by increasing its mental and physical availability. Mental availability refers to the need for a brand to come to quickly to mind in relation to a specific need or occasion. Physical availability refers to the need for the brand to be easy to buy. »
« Kantar’s Mastering Momentum analysis found building exposure to be the most important driver of long-term growth. But the story does not end there, because in most product categories salience alone is not enough to make a sale. If it were, we would not see so many big, salient brands lose market share over time. Similarly, the majority of brands that grew did more than just build their association with a specific need or occasion. »
« This said, there is one set of brands that grew and the only thing that changed was that they improved their salience relative to their competitors. Comprising 25% of the growth brands, these are notable because at the start of the analysis they possessed two other qualities. More people than expected (given the brand’s size) perceived them as meaningful – both functionally relevant and emotionally attractive – and also saw them as different – unique or setting the trends for their category. Included in this group were brands like Amazon, WeChat, Wardah, Aldi and Uniqlo. Brands like these grew by amplifying what they already stood for and making it as easy for people to choose them as possible. Over the three years, their salience increased relative to their competition but their profile on the other two qualities remained unchanged (even though absolute scores improved in line with usage). »
« it is worth looking at the flip side of the growth coin, the brands for which claimed bought last dropped by 5% points or more across the three years. 34% of the declining brands had no major weakness in the first year of the analysis but lost ground on meaning, difference and salience, often because of the advent of a strong, well-differentiated competitor. However, another 28% were weak on perceived differentiation and declined on meaning and salience versus the competition (difference already being low). The third largest group at 13% were weak on meaning and difference and salience subsequently fell. Once again, this points to the fact that perceived differentiation and relevance are important qualities for a brand to possess. Whether through lack of innovation, being out of step with people’s values or side-lined by a competitor, brands need to be more than just salient. »
Hollis also wrote a LinkedIn post titled Beyond Double Jeopardy: the missing dimensions of brand building (7 Sept 2021).
« Ehrenberg-Bass use the existence of Double Jeopardy to justify their growth recipe of being easy to mind, easy to find. But is successful brand building really that simple? »
« In marketing, Double Jeopardy refers to the relationship between brand size and repeat purchase, whereby penetration and repeat purchase rates are correlated. The bigger the brand is, the more repeat purchasers it will have, which puts small brands at a double disadvantage. But just knowing this fact does not tell you why the pattern exists or why it is so prevalent. »
« My experience examining 40 years of data and thousands of case studies suggests that we are missing at least two dimensions from the brand building model: the equivalents of depth and time. »
« When I refer to depth, what I have in mind is the ability to charge a price that makes a good margin… Several studies conducted by Millward Brown and Kantar integrating brand attitudes with volume share and actual price paid demonstrated a correlation between perceived differentiation and price paid. On average, a meaningful different brand – one that people agree meets their needs, is liked, and different or setting the trends for its category – can command a 22% price advantage over one that lacks meaningful difference. »
« what pricing power does is to ensure growth is sustainable over the longer-term, by funding the innovation and marketing necessary to attract new users and encourage existing ones to stick with the brand. »
«The second missing dimension is time. Last year, with the permission of the BrandZ team, I updated the Mastering Momentum analysis first conducted in 2018. The update now looks at 6,594 brands measured over a 3-year time frame. The average brand grew 2% over that time frame (the analysis uses claimed bought last as a surrogate for market share). Classifying the status of the brands in the first year of the analysis by their strength on meaning, difference, and salience relative to their competition identified three groups of brands that grew more strongly over the next three years, as follows,
- Strong on difference, grew 13% on average
- Strong on meaning and difference, grew 11% on average
- Weak on salience, grew 11% on average
Wait! What! Brands that were weak on Salience grew? Yes, because of all the marketing challenges weak salience is the easiest one to solve. »
« Brands that are perceived as meaningful and different grow faster than the average when salience increases. They do not break the Double Jeopardy relationship; they simply increase penetration and repeat purchase faster than other brands because perceived differentiation makes it easier to justify paying the price asked. »
« Double Jeopardy is an empirical generalization. In other words, while it is found in every product or service category where a free market prevails, it describes the general relationship between penetration and repeat purchase rate in a product category. The problem is that if everyone assumes the relationship is the only one that matters, then many marketers will end up playing the same game. No one tries to differentiate their brand; they just try to make it meaninglessly distinctive and salient. That is a recipe for commoditization. A brand that plays by those rules may grow, but it will find it difficult to sustain its price point and growth may be slow. Far better to seek ways to make your brand meaningfully different from the competition and then boost its penetration. Sales will grow faster, return a better margin, and fund innovation and marketing for the years to come. »
Related Twitter discussion (Sept 2021).