Book review: How Brands Grow – Byron Sharp


In How Brands Grow Byron Sharp examines the evidence behind good marketing strategy. The book is in effect a meta-analysis of how marketing affects behaviour. This sounds rather dry – single source panel data on buying habits and brand spend and sales figures – but it reveals compelling truths about us as consumers and the intuitive and counter-intuitive ways we behave. Accepted marketing truisms are examined and rejected along the way.

The most important one relates to differentiation theory of marketing 101: segment your customer base, position your offering to appeal to the segments and then target them with marketing communications.

Sharp rejects the need for differentiation. When you ask regular brand buyers about their feelings towards a brand, across categories, only around 10% see their brand as different or unique: the majority of customers across even cult consumer brands like apple (77%) do not see the brand they have bought into as being different. Sharp sees differentiation theory being founded on the classical economic model of human beings – making rational decisions with perfect information in a market with perfect distribution – which behavioural economics so eloquently skewers.

He argues the billions spent on marketing succeeds by making brands distinctive: me-too products are fine as long as you are memorable, consumers can easily recognise your communications and find you in store. Branding builds this “mental availability” and twinned with “physical availability” (distribution) it makes you easy to buy – and is the key to success. There’s no shortcut to this mental availability – just considerable investment building memory associations (e.g. Coke + red, Pimms+ summer) and reinforcing of simple, consistent messages over years. Once achieved, this mental availability means people notice the brand and recall it across buying situations. And as meta-data on purchasing shows infrequent buyers account for a large proportion of sales it is best achieved through mass marketing, not niche targeting. This is a conservative argument: brand custodianship means keeping a steady ship rather than lurching from one initiative to another.

Less controversial is the truth that marketers tend to forget: people spend little time thinking about most purchase decisions, which are trivial in comparison to their daily lives. Many purchases are about reducing complexity, reducing choice, reducing possibilities to make deciding possible. The examples behavioural economists have given us about jam or pasta sauce are relevant here – having 6 varieties on display means more sales than having 24 varieties on display – choice overwhelms us.

In this worldview brands are a necessary evil allowing us to make purchase decisions once then follow a routine, saving our mental resources. He describes humans as “cognitive misers.” We’ll spend enough time to make a good enough decision (satisficing) rather than the perfect decision (optimising).  In this analysis loyalty is a characteristic of all human decision making rather than something ‘inspired’ by a brand – itreduces saves time and reduces risk.

When market data for loyalty is examined, the norm is polygamous loyalty i.e. having a brand repertoire and switching within it. Across FMCG categories few consumers (13%) are brand loyal over a typical year.  Even for big-ticket cult brands like Apple (55%) or Harley Davison (33%) loyalty rates are far lower than you would be lead to expect from marketing textbooks. Buyers restrict their purchases to a limited consideration set. Sharp cites the repeat purchase rate for cars, which tends to be high (about 50%) because people on average only consider two brands, one of which is the brand they bought last time. From this perspective the real marketing challenge is to make it onto this consideration set in the first place. This is where mental availability comes in.

Another compelling observation is that our behaviour drives our attitudes. Once we’ve made a buying decision, we subconsciously bring attitudes in line e.g. I buy it, therefore I like it. He writes “…since brands aren’t very important to us, brand buying tends to have a strong effect on our rather weak attitudes.” This is counter-intuitive at first. But it ties neatly with what we know about cognitive dissonance. In support Sharp cites evidence that brand image scores reflect the law of prototypicality i.e. attributes that describe the category score well. He also makes the point that attitudes about anything aren’t absolute, but relative, an often situation specific.

Sharp also puts the boot into segmentation, which he sees as exaggerating negligible differences. As an example he cites data on coffee purchasing which reveals the majority of those defined as premium buyers also bought from the budget range that year. The notion of a fixed “healthy” segment in convenience food is dismissed: we buy based on the needs of that situation e.g. it’s on offer, I’m buying this to share, I noticed this, I fancy trying something new, she’ll be impressed by this etc. This amounts to recommendation for marketers to move towards need states.  It also resonates with learnings about personality from social psychology, which shows little evidence for stable personality traits: people behave in different ways at different times and in different contexts.

Sharp presents his argument in a refreshingly honest manner, and draws on evidence across disciplines rather than being myopically marketing-centric. It’s packed with laws and rules but they are not what stayed with me. What did was his portrait of the consumer – the mythical figure I speak to week after week: disinterested, in a busy world with limited mental resources available for what our industry throws at him. We can’t change the way his brain works, so that means we need to change how we appeal to him. Be simple, consistent and memorable: a compelling argument for branding.

Source

How Brands Grow, Byron Sharp

Advertisements

About Simon Shaw

I'm a Director at a communications agency. I'm interested in marketing, market research & consumer psychology. The views expressed are not necessarily those of my employer.
This entry was posted in Books, Consumer Psychology, Marketing, Marketing Research and tagged , , , . Bookmark the permalink.

4 Responses to Book review: How Brands Grow – Byron Sharp

  1. nice post – if a tad heavy on buzz words ;). I take issue in particular with the word “loyalty” from a consumer perspective. My take – we repeat behaviours if they work for us, and then get badly grooved (habitualisation), so changing behaviours is tough and takes a good shot of negatives or some form of disruption. We’re on autopilot most of the time, short-cutting as much as possible. Saying “behaviour drives our attitudes” is to me an overstatement – we behave very often without actually having an attitude. To your point on change of personality – sure, we project differently over time according to a range of contextual and culturual influences. But does that make us non-stable personalities? I very much doubt it for most of us, even though it sounds enticing. Most folk just repeat the cliches of self they propagated yesterday. By the way, if you check out Prof. Andrew Ehrenberg’s work since the 1960s you’ll see that the words you use on “polygamous loyalty” are covered off but without the semantic fireworks.

    • Simon Shaw says:

      Thanks for your comments Edward

      Re: Loyalty – agreed on the autopilot side, things we do regularly take on a momentum of their own. As for attitudes – could we be arguing the same thing? In some instances we just act, then are forced into forming an attitude by a question? I found Wilson & Dunn’s paper “Self-knowledge: its limits, value, and potential for improvement” really useful on this point.

      paper

      As for personality, I’d say there’s a big difference in how we experience our worlds and how we actually act. Our core characteristics as individuals – like how open, agreeable or extrovert we are with others – remain broadly stable over time. However research in social psychology shows little evidence for stable personality traits: people behave in different ways at different times and in different contexts. We all underestimate influence of situation and context.

      And as for buzzwords – what can I say? It was my attempt at a précis 🙂

      Cheers
      S

  2. Simon, many thanks for the review. And kind words.

    I’m interested in any weak points. You make a throwaway line about data. I cite many peer reviewed articles based on many many data sets, covering many countries. And categories, from soap in supermarkets to industrial buying of concrete. From Nielsen, Kantar and many others.

    So I’m puzzled by the implication that there is some other data out there saying something else. We’ve been asking for it for years. Even offered cash rewards. Some claim to have it, or to have seen it once. But strangely can’t find it now – like some mythical beast. If you really have seen some some I’d love to see it too.

    • Simon Shaw says:

      G’day from a snowy UK Professor Sharp, thanks for your comment.

      I really enjoyed HBG. I find myself getting it off the shelf on a regular basis. It’s helped me develop recommendations on live projects on a number of occasions, and as a result I have recommended it to both clients and colleagues.

      It’s been a couple of years since I wrote the review but regarding the point around data, I’ve no agenda here at all – and certainly no store of counter evidence. I think at the time I was aiming to steer the article away from outright hagiography! Your sources are indeed broad and I’m happy to amend this point. No doubt you’ve met with some resistance from those with vested interests since publication.

      One point I’m currently interested in is attitude repeat rates (pages 103-105 in my edition). Our attitudes are weak and changeable. This links to what both social psychology and behavioural economics tell us about the role of the situation and context respectively. I use the coffee buyer example (most who fit the “premium buyer” segment also have budget brands in their repertoire) to nudge clients away from a rigid segmentation mindset, and more towards a need-state mindset. Are there any papers/sources you’d recommend if I wanted to investigate attitude repeat rates further?

      If you’re visiting the UK soon, I’d love to discuss in person. The coffee – premium of course – would be on me.

      Cheers
      Simon

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s