Source: Deliver Magazine (July 2009) (excerpted from Chaotics: The Business of Managing and Marketing in the Age of Turbulence)
Author: Philip Kotler and John Caslione
Eight ways to flourish despite widespread uncertainty and upheaval
1. Secure your market share from core customer segments. This is no time to get too greedy. Your first priority is to get your core customer segments firmly secured. Be prepared to ward off attacks from competitors attempting to take away your most loyal and profitable customers.
2. Push aggressively for greater market share. All companies fight for market share and, in chaotic times, many have been weakened. Slashing marketing budgets and sales travel budgets are sure signs that a competitor is buckling under pressure. Add to your core customer segments at the expense of your weakened competitors.
3. Research customers now more than ever. Everyone is under pressure during times of turbulence and chaos, which means all customers are changing their habits - even those in your core segments whom you know so well. Stay close to them. You don’t want to find yourself relying on old marketing messages that no longer resonate.
4. Seek to increase - or at least maintain - your marketing budget. This is the worst time to think about cutting anything in your marketing budget that targets your core customer segments. In fact, you need to add to this buget, or take money away from those forays you were planning to go after totally new segments. It’s time to secure the home front.
5. Focus on all that’s safe. When turbulence is scaring everyone in the market, there is a massive flight to safety by most consumers. They need to feel the safety and security of your company and its products and services. Do everything possible to communicate that continuing to do business with you is safe. Spend whatever it takes to do it.
6. Quickly drop programs that aren’t working. If you’re not watching your spending, rest assured that someone else is - including your peers whose budgets couldn’t be protected from the ax. Cut out ineffective programs before someone else calls attention to them.
7. Don’t discount your best brands. When you do this, you instantly tell the market two things: Your prices were too high before, and your brands won’t be worth the price in the future once the discount is gone. Instead, consider creating a new, distinct product or service offering under a new brand with lower prices. This gives value-conscious customers the ability to stay close to you while not alienating those still willing to pay for your higher-priced brands. Once the turbulence subsides, you may consider discontinuing your newly introduced branded value product line - or not.
8. Save the strong; lose the weak. In a turbulent economy, you need to make your strongest brands and products even stronger. There’s no time or money to be wasted on marginal brands or overly fragile products that aren’t supported by strong value propositions and a solid customer base.
July 28th, 2009
Source: Appleton Paper
Print comes to your door and takes you places. It becomes part of your landscape. A place where you can spend time gathering information and pondering purchases.
With the explosion of products, media choices, and the dwindling attention span of today’s consumer, your brand’s ability to connect is more critical than ever.
It’s why print should be an indispensable part of the marketing mix. After all, brands are built on emotional connections. And nothing creates those deep connections like print.
According to Wharton Marketing Professor Eric Bradlow, print offers clear advantages over other media, such as email. “Many people see email as impersonal and costless to write,” he says. “People want to feel special. Email is transactional, paper is relational.”
The biggest factor, however, is that people read print to the degree they don’t read email.
Here are the facts:
> 80% read or skim direct mail, 38% find direct mail interesting.
> 82% agree: “I like getting direct catalogs in the mail from the stores I patronize.”
> 70% have renewed a relationship with a company as a result of receiving direct mail.
The Connection Factor extends beyond consumer engagement. It is also key in cementing business-to-business relationships. According to a recent Doremus & Financial Times Study, 59% of senior executives prefer printed resources over online resources for information. 60% of these executives turn to print for in-depth analysis.
Print, ideas, and information continue to be the bonds that bring people together. You can’t replicate the connection or the quality of time spent with any other media.
July 27th, 2009
Source: DOTS Newsletter (July 2009)
Another reason not to reduce marketing and advertising efforts.
Many years ago, a famous tennis player was in a camera ad with the tagline, “Perception is everything.” He was right then, he is right now. With the current economic challenges, businesses are more likely to withdraw from or greatly reduce their marketing activities. Printers and their clients need to rethink that strategy.
With retailers and auto dealers closing every day, consumers are fearful that the store they might buy from won’t be around to support the purchase. A recent survey shows that 48% of U.S. adults believe that a lack of advertising by a retailer that is a sign that it’s struggling while those with continued and strong ad presences appear to be committed to stay in business.
Which message do you want to send?
July 22nd, 2009
Source: Marketing News (07.30.09)
Author: Don E. Schultz
Advertising and marketing communication has historically been all about persuasion. In fact, one of the earliest definitions of advertising was “salesmanship in print,” which simply meant persuading people to buy in a non-personal way. So for at least the past 100 years, the model has been marketers making or developing products and services, and then trying to convince consumers to buy through various forms of media advertising or promotional literature.
Entire industries have been built on this premise, from training salespeople and identifying prospective customers to creating more and better selling propositions in ever more interesting ways. In short, trying to find ways to get consumers or firms to buy, because if people are buying we assume we’re selling and therefore have a successful business enterprise.
To sell, advertising people believe they have to persuade consumers. Since we don’t really know what persuades people, we research and test prospective advertising with persuasion scores or intent-to-buy measures. The premise being that good advertising can convert a customer from tire-kicker to buyer with a few well-chosen words or pictures or sounds or images. In short, persuasion factors are employed that encourage people, who the selling organization has never seen or may not even know exist, to buy.
Yet in the last few years, we’ve seen the rise of a different form of persuasive marketing communication. Person-to-person communication, rather than marketer-to-customer persuasion. Today millions of consumers follow every movement of the rash of new instant celebrities - people we hardly even knew existed until they were called to our attention by our electronic pen pals, the E! Network and what formerly were known as morning news shows, all of which have morphed into celebrity celebrations.
In short, persuasion is no longer in the hands of marketing departments or advertising agencies, or even the recognized media. It’s in the hands of people who ask if they can communicate with us via LinkedIn, Facebook, Twitter or some of the interactive communication systems of the moment.
The challenge, of course, is that marketers, advertisers and promotion specialists still favor the old persuasion techniques. TV commercials, radio spots, magazine ads, in-store promotional materials, all are designed to persuade the customer to buy. Unfortunately, it appears the ever-elusive consumer is ignoring marketers’ appeals because she is downloading the latest hit single by manufactured singing groups.
So persuasion seems to have changed. No longer are major consumer product brands persuading consumers to buy with their well-researched and beautifully executed promotional programs. Instead, consumers are being persuaded by what were formerly the marketer’s target markets: by consumers promoting their favorite music or sports or even fashion idols through the new communication forms. And seemingly, once a few technology-empowered enthusiasts are encouraged or engaged or involved, the entire world stops worrying about North Korea and its atomic arsenal, and focuses only on whether they can convice friends, neighbors, associates or acquaintances to cast their ballots for their current favorite from Dancing with the Stars.
We learned some lessons from Barack Obama in his surge to the White House. Friends, acquaintances, neighbors and communities with similar interests do matter. Contacts matter. Causes matter. Hopes and dreams matter. And they matter big time. Getting a call from a friend asking for your support for Barack seemed to have much more power, certainly persuasive power, than all the TV commercials the Swift Boat Boys could muster.
The point of all this? The advertising community, the people who supposedly invented the art of persuasion, seems to have lost its edge. It’s been pushed into the background by the 13-year-old who learned how to piece together bits and pieces of audio and video and forward them onto her Internet friends who push them on to their friends in a never-ending cycle of contacts until the 13-year-old, or someone like her, starts a new persuasion circle. Today, those cycles seems endless, like the circles in a pond when a pebble is dropped.
The problem is that persuasion being in the hands of consumers may signal a profound shift in the advertising and marketing communication world we have known for the past couple of centuries. Maybe the road to persuasion isn’t about convincing as much as it is about involving.
Quite honestly, advertising people don’t know very much about persuasion. I argue marketers don’t really persuade people to buy products or services. More often, it’s simply that marketers beat consumers into communication submission with a barrage of commercials and advertisements on everything from urinal splash mats to continuous-loop screens in the back of taxis. Inane messages about product benefits and better-than-competitor claims are supposed to encourage consumers to rush to the store to pick up the latest product innovation, but most today don’t persuade, they simply annoy.
We’re in the midst of what I believe is an economic and communication transformation. The shift of persuasion power to the 13-year-old with a laptop and a cell phone is only one of the manifestations of that transformation. Persuasion, it seems, isn’t or can’t be measured by gross rating points or exposures, or even by the fabled advertising research persuasion scores. It can only be measured by what people do. And unfortunately, more people today seem to be persuaded by the 13-year-old than what the highly acclaimed, black-clad, agency creative genius can generate. It doesn’t say much for the future of a once-proud advertising industry. But then what could you expect from a group that still seems to think a Cannes award is the epitome of persuasion?
July 21st, 2009
Source: Appleton Papers
There is no question that online communicaiton has changed the way the world interacts, stays informed, and purchases products. But experience has shown us that choosing print or online tactics isn’t an “either or” proposition. In fact, online and print, when used in a coordinated campaign, enhance the delivery of the messages and increase marketing results:
> 2 Times: consumers receiving a printed catalog are twice as likely to buy online than those consumers who do not receive a catalog.
> 67%: of online action is driven by offline messages.
> 86%: shopping is easier when they have a printed catalog.
Things change. Media evolves. Technologies improve. But the need to engage consumers remains the same. Having a clear, integrated strategy that uses both print and online increases your success rate. The message is clear, print ignites online action.
July 20th, 2009
Author: Price Pritchett
I’m sitting in a quiet room at the Millcroft Inn, a peaceful little place hidden back among the pine trees about an hour out of Toronto. It’s just past noon, late July, and I’m listening to the desperate sounds of a life-or-death struggle going on a few feet away.
There’s a small fly burning out the last of its short life’s energies in a futile attempt to fly through the glass of the windowpane. The whining wings tell the poignant story of the fly’s strategy - try harder.
But it’s not working.
The frenzied effort offers no hope for survival. Ironically, the struggle is part of the trap. It is impossible for the fly to try hard enough to succeed at breaking through the glass. Nevertheless, this little insect has staked its life on reaching its goal through raw effort and determination.
This fly is doomed. It will die there on the windowsill.
Across the room, ten steps away, the door is open. Ten seconds of flying time and this small creature could reach the outside world it seeks. With only a fraction of the effort now being wasted, it could be free of this self-imposed trap. The breakthrough possibility is there. It would be so easy.
Why doesn’t the fly try another approach, something dramatically different? How did it get so locked in on the idea that this particular route, and determined effort, offer the most promise for success? What logic is there in continuing, until death, the seek a breakthrough with “more of the same”?
No doubt this approach makes sense to the fly. Regrettably, it’s an idea that will kill.
“Trying harder” isn’t necessarily the solution to achieving more. It may not offer any real promise for getting what you want out of life. Sometimes, in fact, it’s a big part of the problem.
If you stake your hopes for a breakthrough on trying harder than ever, you may kill your chances for success.
July 16th, 2009
Source: Deliver Magazine (July 2009)
Author: Gwen Moran
No one needs to tell you that the economy is struggling. As a marketer, you’re more keenly aware of the challenges in today’s marketplace than anyone. But while most of your peers are responding to this economic downturn by slashing budgets (and praying for the storm to pass), some are taking a slightly different aproach, asserting that every situation - no matter how seemingly dire - holds opportunity.
Jack Trout, founder of Trout & Partners in Old Greenwich, Conn., couldn’t agree more. “Marketers who pull out now are missing a tremendous opportunity,” says Trout, also the co-author of numerous seminal books on marketing, including Positioning: The Battle for Your Mind. “Without as much advertising out there, the noise level has dropped off, giving you more maneuvering room because not everybody is yelling at the same time.”
But if cutbacks are inevitable, make sure they’re not across the board, says Russell Winer, marketing departmen chair at the Stern School of Business at New York University. “Keep an eye on what your competitors are spending and make sure your voice share stays the same,” he adds.
The best approach for scaling back is the examine each line of spending, looking for patterns and cutting non-essential outlays that don’t produce results. Preserve resources for the functions and activities that directly support sales and can be measured for their effectiveness in bringing new customers, such as coded offers, online activities and other forms of direct marketing.
And while there are no silver bullets to get customers to flock to your business, here’s a look at tactics that work for most companies:
Don’t cut price - add value. Success begins with a solid value message, but that doesn’t mean cutting your prices. “Price reductions cause serious problems when times get better,” Trout says. “You’re saying your value story is price. That’s a hard story because your competitors can mark down stuff as fast as you. It’s the road to wrack and ruin.” Instead, he says, work on building brand loyalty by communicating more and showing customers you understand the pain of the recession.
That’s what your prospects’ minds are focusing on right now, adds Jay Conrad Levinson of the “Guerrilla Marketing” franchise. “Explaining what your business is doing to help customers weather difficult economic times - providing high-quality products or services that last longer or somehow save them time or money, for example - can create a stronger bond during the recession,” he says.
Guarantees and messages that emphasize why buying your brand is insurance against making money-wasted bad decisions are particularly effective. “If people feel you don’t know what’s going on with them, or how tough they have it, they’re not going to be inclined to buy much from you,” Levinson says.
Beef up your return per customer. Keeping an existing customer is one-sixth of the cost of landing a new one, says Levinson, who advocates expanding the return on your current customer base. Two key ways to do this are to enlarge the transaction size and sell more frequently to your customer base. For the former, look for ways that give customers an incentive to buy more without simply cutting prices across the board, like gift-with-purchase offers or loyalty-based benefits programs.
Hyatt Hotels & Resorts has used the economic downturn as an opportunity to rethink its 9 million-member frequent-guest program, Hyatt Gold Passport. “So much of what goes on in loyalty marketing is about customer loyalty to a company,” says Jeff Zidell, vice president for the Hyatt Gold Passport program. “We turned that upside down and thought about our loyalty to the customer.”
The revamped program provides new benefits for all members, but particularly those at the top two levels. Hyatt announced the enhancements in April and May during its six-week “The Big Welcome” promotion, during which 30,000 Hyatt Gold Passport members world-wide could win a free one-night stay at a Hyatt propety by entering a sweepstakes at a special Web site. Winners were chosen randomly each Monday during the promotion. The free-night credit was immediately applied to their Hyatt Gold Passport accounts.
The promotion included ads in major newspapers worldwide, postcards at hotel front desks and announcements sent to Hyatt Gold Passport members with their regular statements. Hyatt also placed several short videos online, urging viewers to visit “The Big Welcome” site to enter the sweepstakes.
It’s too early to provide hard ROI figures, but Zidell says Hyatt saw a jump in paid bookings during the campaign. “Several hundred additional paid nights booked by those same customers,” he adds. Meanwhile, Hyatt is already planning its next set of Hyatt Gold Passport enhancements.
Integrate your efforts. Approach outreach in a more holistic way, using more than just one vehicle. Liz Miller, vice president of programs and operations at the CMO Council, sees a trend toward direct mail with personalized URLs for customized offers and information. “There is a distinct move to use direct mail to drive deeper engagement online,” she says.
Savings Bank Life Insurance of Massachusetts (SBLI), which has policyholders in 40 states, relies heavily on an integrated marketing approach. “Direct mail drives a lot of our new leads,” says Rose Cahill, vice president and director of marketing for the Woburn, Mass.-based company. “But it’s a combined approach that makes our efforts more effective.”
SBLI currently mails 500,000 to 1 million letters almost every month. In reaction to the recession, SBLI has stepped up mailings to “responders” - prospects who have responded to past offers but who haven’t yet made a purchase. The correspondence typically invites recipients to inquire about life insurance through mail-in coupons, a toll-free number or a dedicated landing page. Visitors can obtain a rate quote, enter their phone numbers for an agent callback or research insurance at SBLI’s online Learning Center.
The center includes an interactive “insurance needs calculator” and Webcasts featuring free financial advice. “People are looking for value,” says Cahill, who estimates that about half the mail-generated leads respond through the Web site. “They’re shopping around more, and it’s taking them longer to make decisions. So the more content and education you can provide, the better.”
SBLI also is reaching out to existing policyholders more frequently. The company recently sent letters to 30,000 customers, encouraging them to upgrade their coverage. It’s changed the tone of its correspondence, too. “Our messaging has gotten more serious and a lot less promotional,” Cahill says.
The most successful outreach effort? A letter to all SBLI customers from the company’s CFO talking about the importance of insuring your family and the financial strength and security of the company. The message was meant to reassure customers skittish about their expenditures and investments.
Whatever your approach, the one thing to remember is that times will get better. Use this time to stay true to your image, build market share and position your brand to be stronger in the turnaround. “Marketers can make enormous contributions to their companies right now,” Trout says. “But they have to have the courage to look at what needs to be done and stand up and do it.”
July 13th, 2009
Three ways to build and maintain loyal relationships when customers are running scared.
Source: Deliver Magazine (July 2009)
Author: Sid Liebenson
Consumers are retrenching, economizing and just plain scared. But as the saying goes, the pessimist sees difficulty in every opportunity, and the optimist sees opportunity in every difficulty.
The recession presents the perfect opportunity to fine-tune marketing efforts that will build loyalty among current customers. It also is the prime time to go into acquisition mode and attract competitors’ customers to your brand. Here are three ways to do it:
1. Get Personal. Consumers are vulnerable in a down market: They’re rethinking their brand loyalties as they look to economize and reconsider what they value in a brand. Keeping your customers means personalizing like you’ve never personalized before.
Mine your data to let your customers know you understand what’s important to them. For example, you might send a message on a catalog overwrap saying, “In the spring, you bought this lightweight cotton sweater from us. Now that it’s fall, here’s what people who bought that sweater are buying now.” This shows you care about what they are thinking, and there’s some logic to what you’re recommending - you’re not selling them something just to sell it.
Your marketing messages need to be not only personalized, but frequent. In a tough economy, it’s common for consumers to question where every penny is going. When they do that, suddenly every relationship is a little at risk. Their question becomes “Am I really getting value from this relationship, or is there something that will satisfy my needs equally for less money?”
2. Don’t Make Cuts. Now is not the time to scale back on marketing spending. If you don’t stay in touch with your best customers - while they’re continuously exposed to messages from your competitors - the idea of buying your brand gets further from their mind. This is especially true when consumers are already reconsidering their brand loyalty.
Lately, we’ve found it’s easier to get a larger - and louder - share of voice for our clients: In several categories, competitors aren’t marketing as much or they’re reducing campaign frequency. With these cutbacks, some marketing media have become cheaper. If you’re not afraid to spend some money on acquisition, chances are your media costs can be a little more efficient.
3. Show Them You Care. Empathize with customers to demonstrate you understand what they’re going through during the recession. Health care, for example, is a big concern for consumers right now. It’s why Draftcb created a new campaign, “The Power of the Human Voice,” for our Blue Cross and Blue Shield of Florida (BCBSF) client that lets people directly voice their ideas and concerns about health care.
Using their computer microphone or a guided phone messaging system, visitors to the dedicated campaign site (thepowerofthehumanvoice.com) can record their message and listen to what others have to say. BCBSF responds to the messages with insights and explanations from experts across the organization. From April 2008 to August 2008, there were more than 83,000 visits and 2,357 messages left on the site. This clearly shows the effects of empathizing with consumers.
You should always practice good marketing - personalization, appropriate messages, frequent touches - but focus on these things even more to keep your customers with you through the economic crisis. When times are better, you’ll have your core group of customers - and then some.
July 8th, 2009
Source: Deliver Magazine (July 2009)
Boy, there’s nothing like a recession to get marketers interested in numbers.
Faced with pitching the chief financial officer for more marketing funds, or finding more efficient ways to spend the paltry millions they already have, marketers are coming up with interesting ways to make do.
One way is to shift spending to lower-cost alternatives (read: digital) where, the logic goes, you’re spending less so any return you get is more. Makes sense, right?
Well, maybe not. Truth is, the best marketing does more than produce good ROI; it maximizes your investment. Think of it this way: It’s great to get a one-time sale from a customer, but much more financially rewarding to get a customer for life who will add value to the bottom line over a longer period of time.
Switching to a lower-cost alternative can bring down the expense side of that ROI number, so it sometimes seems more valuable. But factor in engagement, relevance and pass-along, and you may not be maximizing your return.
But don’t take our word for it. An advertising publication we know of recently ran an article on measuring social media sites’ ROI. It led to this comment from Gregg Ambach of Analytic Partners (who knows a bit more about analytics than we do): “(Digital) is incredibly efficient, because the cost per thousand is low. But it’s just not moving a lot of volume yet.”
And there’s the catch for marketers looking to stretch their marketing dollars. Sometimes, you get what you pay for. Yes, it costs more to send direct mail, but the return it generates ($15.60 per $1 spent) and the engagement it creates with your customers can maximize your investment in a way that’s unique from other channels.
Oh, and for the 20 percent of senior marketers who recently reported on a CMO Council survey that they don’t track their ROI on marketing at all (at all!) - what are you thinking? You can’t market if you can’t measure. (Note to the board: Fire these folks immediately!)
July 7th, 2009
The Key is how many you have, not how much they buy.
Source: Marketing Research Magazine, Summer 2009
Author: John Dawes
Managers usually want their brands to grow in sales and market share. In theory there are two ways this could happen: attract additional customers to buy the brand or get existing customers to buy more of the brand. Several studies have examined the extent to which brand growth depends on these factors, but there have been none using data more recent than the late 1990s. This study builds on the approach used by Baldinger and colleagues, who examined brands that grew as well as declined. (See Baldinger, Allan L, Edward Blair and Raj Echambadi (2002), “Why Brands Grow,” Journal of Advertising Research (January/February), 7-14.)
The studyhere has a narrower focus: to only analyze brands that have grown markedly in sales over a three-year period. Examining brands that have grown, and sustained that growth, could give good clues for how to grow. The key question is this: When a brand grows, which changes the most - the number of customers buying the brand or the amount (number of units) of the brand that are bought by its customers?
To address that question, this study analyzes the growth patterns of 12 established packaged goods brands across diverse packaged goods categories in the United States. A mix of big and small brands was examined. The cut-off point for brand size was 1 percent share because extremely small brands can bias results. Each of the 12 brands grew markedly over the 2005 - 2007 period. Nielsen kindly provided the data.
Two terms are used in the analysis and discussion: (1) Brand Penetration: the number of households that buy the brand at least once in the year and (2) Average Weight of Purchase (AWOP): the number of units of the brand bought by each household.
The Study
The analysis method is simple. We identified brands that exhibited robust sales growth for the period 2005-2007 across a range of categories. For each brand, we calculated the percentage change in penetration from 2005 to 2007, and the percentage change in AWOP from 2005 to 2007, and compared the two figures.
The results are striking. The percentage incrase in penetration is far greater than the percentage increase in purchase weight for 11 of the 12 brands. Take the example of the margarine brand Smart Balance. From 2005 to 2007, its penetration increased by 27 percent, but its AWOP increased by only 3 percent. In four other cases the brand increased its penetration, but brand AWOP actually decreased slightly.
As a case in point, Garnier Fructis hair conditioner grew by selling to 33 percent more households in 2007 compared to 2005, but its AWOP per household decreased by 8 percent. It is worth noting that the decrease in AWOP for Garnier translates to quite a small number in absolute unit terms: Garnier’s AWOP was 2.1 units in 2005 and 1.9 in 2007, so the change in absolute terms was only 0.2 units per year. This suggests Garnier attracted most light buying customers who bought it once or perhaps twice during the year. This is fine - the brand still grew. In only one of the 12 cases did brand AWOP change by more than penetration. This was for Challenge butter, where penetration increased by 10 percent and AWOP increased by 15 percent.
Note that in the case of Schweppes, the average units bought per annum for 2007 was adjusted to cater for a change in average weight between 2005 and 2007 (while units per occasion increased considerably, volume per occasion did not, suggesting a change in unit average weight).
The evidence here suggests that, when a brand grows, penetration usually grows by an appreciable percentage and AWOP usually changes by a much smaller percentage, or possibly might even decline slightly. None of these 12 brands grew without a positive change in penetration. This is the outcome from looking at aggregated data. It may be that at the level of the individual household, existing buyers did buy appreciably more of the brand, but this is counterbalanced by the influx of new buyers who buy the brand at less than the average rate.
The results from this work are broadly consistent with earlier research. In 2002, Baldinger and colleagues examined Canadian data from 1992-1997 and concluded penetration was the key to brand growth. A 2003 study by McDonald and Ehrenberg looked at 20 U.K. product categories and found the same (”What Happens When Brands Gain or Lose Share: Customer Acquisition or Increased Loyalty?” in Report 31 for Corporate Members. Adelaide: Ehrenberg-Bass Institute for Marketing Science).
And in their book Meaningful Marketing: 100 Data-Proven Truths and 402 Practical Ideas for Selling More with Less Effort (Brain Brew Books, 2004), Douglas Hall and Jeffrey Stamp report similar results.
This study has updated and confirmed the evidence, using more recent data for U.S. product categories.
Management Implications
If you want brand growth, you need to construct a plan to increase brand penetration levels by an appreciable amount and expect that the brand’s AWOP levels will not increase by nearly as much in percentage terms, or might even drop slightly. Indeed, planning to grow the brand by boosting AWOP alone does not seem to be consistent with the way brand growth seems to occur.
How is penetration growth achieved? There are two broad ways: expanding distribution and marketing communication. Both are ideal ways to reach buyers who do not currently buy the brand. Expanding distribution means finding new distribution channel clients, new forms of distribution channels or making the brand available in places it is not currently sold. It also means working hard on the quality of distribution: location in stor and prominence on the shelf. This sounds fundamental, and it is, but fundamentals are sometimes forgotten in the race to employ the latest idea. Marketing communication such as advertising should be designed to reach and attract the attention of non-buyers. Strong brand identification is paramount because these non-buyers aren’t as likely to notice the advertising as easily as current brand buyers. They need a simple and clear message linking the brand to the product category and to need or usage situations.
Brand growth can happen. These brands did it. So can yours!
This study was part of the Ehrenberg-Bass Institute’s program of fundamental research funded by corporations such as Mars, Procter & Gamble, and Turner Broadcasting. The assistance of Nielsen in providing data is also greatly appreciated.
July 6th, 2009
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