7 Rules of Marketing that Get Results

by Temel Aksoy

  Brand personality is a marketing myth. The personality that marketers want to attribute to brands won’t differentiate them from their competitors.

  40.

  Brands Are Not People but Software

  Comparing brands to people leads marketers to view them as a static, unchanging and fixed concept. However, brands aren’t the sorts of things that get instilled in people’s minds and then never change. All of the marketing activities conducted by a brand and its rivals result in a never-ending process of gradual change in brand perception. A new product, a new advertisement, price changes, or new sales techniques in the distribution channel alter people’s memory structures related to this brand. It’s not just the brand’s own activities but also those of their competitors that alter people’s brand memories. No brand has a perception in the human mind that’s firmly fixed.

  Martin Weigel said it was better to view a brand as software instead of as a person. The software comparison better describes the changing nature of a brand in people’s memory. A brand installs its software (brand awareness and perception) on the hard drive (memory) of a person through marketing and advertising.

  After that point, current and potential users of a brand are affected by

  what they see (and hear) in advertisements from the brand and its rivals

  the new products released by the brand and its rivals

  the experience people have with the brand every time they use it

  what other people they know are saying about the brand

  and the brand morphs in their memory accordingly. Every interaction people have with a brand can alter the dimensions, functions and characteristics of the brand in their memory—much like uploading a new version of software.

  In an age when people have easy access to all types of product and brand information, brands can’t affect people’s choices by assuming certain fixed personality traits. Obviously, brand communications must appeal to people’s emotions. Brands clearly need to develop their own unique advertising narrative and stay faithful to this narrative, but no one buys a brand strictly for the emotional benefits it proposes.

  The marketer’s job is to update, with newer versions, the brand memory uploaded to the human mind as “decision-making software,” thereby increasing the probability that people will chose the brand. Marketers shouldn’t waste time with superficial issues that have no effect on people’s choices, like brand personalities.

  41. I

  conic Brands Are Also Subject to Marketing Laws

  In any discussion of brand differentiation, most people think of brands like iPhone and Nike. The assumption is that these brands have established powerful emotional bonds with people and enjoy a high degree of loyalty. However, the reality is, the loyalty achieved by these brands is consistent with marketing laws.

  In the US, Apple has a 45% share among smartphone users and enjoys a 92% rate of repeat purchases, while Samsung holds a 29% share and has a 77% repeat purchase rate. As Byron Sharp says, the “US smartphone market follows the Double Jeopardy law—smaller brands have lower retention rates.” (See Byron Sharp, “Does the iPhone Defy the Double Jeopardy Law?” Ehrenberg-Bass News, October 2017.)

  Another brand like Apple that marketers follow with keen interest is Nike. Many would assume that because it’s such a famous brand, it has a clear advantage worldwide. But as John Dawes of the Ehrenberg-Bass Institute explains in his 2009 article, Adidas has 33% of the market share in England, while Nike has 28%. People who buy Adidas meet 68% of their needs for sports shoes with Adidas, and those who buy Nike meet 63% of their needs with Nike. In England, the brand with greater market share (Adidas) creates more loyalty as predicted by the Double Jeopardy Law (details in chapter 26).

  Iconic brands are subject to marketing laws just like every other brand.

  SEGMENTATION AND TARGETING

  42. N

  arrow Targeting Is a Marketing Myth

  Every brand grows either by acquiring new customers (consumers) or by selling more products and services to existing customers (consumers). Traditional marketing, favoring the second approach, argues for segmenting the whole market, targeting a well-defined (most lucrative) segment and finally positioning the brand within this target segment (STP). This approach poses significant problems:

  It’s impossible for any company to describe the segments recommended by traditional marketing in real life, because brand users are in most instances the same people who use rival brands at the same time. Identifying such a target segment is impossible because consumers within one segment may well belong to another segment (details in chapter 31).

  Contrary to what many marketers like to think, people don’t always buy the same brand of dairy product or the same brand of computer. Therefore, no matter how desperately brands want to sell to the group they’re targeting, every brand sells to users of other brands, proportionate to their market share (details in chapter 35).

  Furthermore, people, for whatever reason, will begin buying less of a brand they used to buy frequently, while showing more interest in other brands and purchasing more of them. Brand users aren’t a static group but, rather, have changing behaviors, and it’s impossible to conduct sustainable marketing policies aimed at a fluctuating target audience (details in chapter 29).

  Of the people who buy a brand, 80% are light buyers or first-time buyers, accounting for 40% of total sales. Only 20% of users are heavy, accounting for 60% of sales. Ignoring 80% of a brand’s users (or 40% of sales volume) is essentially retarding the growth of the brand (details in chapter 28).

  As Byron Sharp stated, the need for targeting the whole market instead of a narrow segment is best illustrated by the marketing efforts of luxury brands. It’s not millionaires but the middle class that’s the biggest buyer of luxury handbag brands, Swiss watches or expensive brands of champagne. These are university graduates who buy these brands (or receive them as gifts) when they get a new job or get a promotion. They represent a significant source of revenue for the growth of luxury brands because they make up a much larger percentage of the population than the uberwealthy. Luxury brands like Louis Vuitton and Omega place advertisements in newspapers read by the general public to target the 80% who buy their products infrequently. If it were true that only high-income individuals bought these brands, the luxury brands would be able to reach this narrow segment of heavy (or frequent) users more economically than they do now, and they wouldn’t place advertisements in newspapers.

  It’s worth repeating often throughout this book: Brands grow by targeting the whole market, not a narrow segment of heavy users (details in chapter 26). Therefore, as Andrew Ehrenberg often points out, the most important question every brand must ask itself is not, “Who buys me?” but “How many people buy me?”

  In summary, brands in every product category

  compete with each other as nearly equals,

  are substitutes for each other, and

  are purchased by the same or similar people.

  According to the laws of marketing, it’s impossible for brands to grow by implementing the narrow targeting practices recommended by traditional marketing. STP is a marketing myth. The right growth strategy is sophisticated mass marketing (a term coined by Byron Sharp), because what grows a brand is not a small number of heavy or frequent users but a large number of light users and first-time buyers.

  43. T

  he Typical User of Every Brand Is a Light User

  At first glance, traditional marketing’s approach of prioritizing a narrow target audience seem like a reasonable proposition. However, empirical data proves that this approach isn’t a good marketing technique, because the majority of every brand’s users are light users.

  This issue was recently raised during my consultation with one of Istanbul’s most popular shopping centers. The executives wanted to set up a program whereby shop
ping center customers were given money-points to use on subsequent purchases. I asked the executives how many of the approximately 40,000 people who came to the shopping center on an ordinary day were first-time visitors. Most said that the majority of customers were frequent visitors.

  Later, we reviewed the results of the latest research that they themselves had conducted. According to this survey, 70% of the 40,000 visitors who came to the shopping center on any given day were first-time visitors, while frequent visitors accounted for only 10% of the total. If they had implemented their program, the people who would have benefited the most would have been the 10% segment of regular customers. After seeing these results, the executives decided to implement a different program that encompassed everyone, including first-time visitors and infrequent visitors.

  Source: How Brands Grow

  To illustrate this concept, consider the example shown in the graph above, which includes 1,000 people who have never purchased brand XYZ, 200 people who have bought the brand once, 50 people who have bought it twice and 17 people who have purchased it ten times.

  We can quickly calculate that on average, shoppers purchase the brand 3.3 times, but the majority (200 people) buy the brand once. The average ends up being 3.3 because of the small number of people on the right side of the graphic who buy eight, nine and ten times.

  Every brand’s customer (consumer) profile is similar to this example. Any brand’s typical customers are those who use the brand infrequently. What’s more, every brand’s greatest potential is found among those who have not yet purchased the brand. This is a fact often overlooked by marketing executives, who are generally misled because they examine the behaviors of the average customer (consumer), when, in fact, what they should do is also take into account the frequency with which shoppers buy.

  It is Andrew Ehrenberg who noticed that light buyers constituted the majority of the user base in all brands, in the researches he conducted on consumer panels. In fact, his invaluable contribution is based on this precious piece of truth, from which he laid the foundations for scientific marketing.

  Thus, the success of any brand depends on the acquisition of new users. Although heavy users may seem attractive, light users and new users are indispensable to grow a brand.

  44. Ev

  ery Brand Has Its Natural Target

  The concept of segmentation made legendary by traditional marketing is an approach employed by nature by every brand. If a brand’s product is high quality and high priced, those without the income required to purchase it are automatically excluded from the company’s target segment. Not everyone can purchase the high-end models in the automobile market. These vehicles are naturally purchased by high-income individuals.

  Similarly, no brand is sold in every geographical region. Some brands can’t have a presence in different regions because of conditions such as religion, language or climate. Besides the quality/price ladder, location also creates natural segments regarding the areas where brands operate.

  Age and gender are also elements of natural segmentation. Some products are manufactured for women, some for men and some for children.

  If a brand narrows its own market by further segmenting beyond these “natural” segments, and then targets only one (or a few) of these segments, it’s limiting its growth potential.

  An example: If a brand that makes healthy snacks targets only those who diet and eat healthy, it can’t grow, because this group represents a very small percentage within the total population. What it must do is target the whole market. As mentioned in chapter 24, as all of us know from our own lives, people who drink diet cola aren’t only those on a diet and those who eat vegetarian pizza aren’t only vegetarians.

  Therefore, every brand must target all potential users. Dividing consumers into segments (S), targeting one of those segments (T) and positioning the brand for that target (P) is a marketing myth that doesn’t yield brand growth.

  45. Ge

  nerational Theory Is a Marketing Myth

  Every time period has its own peculiar characteristics. The living conditions of the time, the technology and the dominant ideology will undoubtedly affect everyone who lives during a particular period of time. Everybody carries the “spirit of the age” that they were born into. In this respect, all of us are the product of our time, just like our parents were.

  However, using this as a basis to claim that all of the people born during a certain period have similar values, have a similar psychology, act on similar priorities, exhibit similar consumption behavior, form relationships in a similar way and, most importantly, will carry on these traits for their whole life is a far-fetched generalization devoid of truth.

  Most marketers accept the generational theory without question and believe that the traits of every generation will determine the behavior of people from that generation for the rest of their lives.

  I doubted the veracity of this claim from the moment I heard it. People’s age and the conditions of their life (e.g., being young and unmarried) obviously have a significant effect on their behavior, but as people age and the phases of their life change, so do their attitudes and behaviors.

  People’s attitudes and behaviors can’t be explained by the generation in which they were born. Every person has different genetics, different family values and different living conditions and was raised in a unique way. People from the same generation vary widely in terms of education, income, traditions and personal traits. Ignoring all of these characteristics and labeling everyone from the same generation with a wholesale stamp of X, Y or Z is a very superficial approach. The beliefs and behavior of two siblings born in the same family and close in age can be very different, so the idea that every individual from a certain generation is similar is almost laughable.

  Serious research on the subject by the company FutureCast (see “The Millennial Mindset®” in References) has shown that there are no significant differences between Generations Y and Z, or between the older Baby Boomers and Generation X, in terms of how they view new products, what they expect from life or how conservative/progressive they are.

  The most important characteristic of Generations Y and Z is that they’re young. Because they’re young, they spend more time outside and watch less television. But, when they reach middle age, these generations will spend less time outside, watch more television and manifest behaviors consistent with their stage of life, just like everyone else.

  It’s truly ridiculous to assume that young people will maintain the traits of their youth throughout their life and not change as they age. The reasonable approach is to view young people as youth.

  The one trait that does mark the youth demographic is income. The income of young people in every country around the world is lower than that of middle-aged and elderly individuals, which is why this demographic is the most sensitive to prices. In every country, it’s young people who most frequently choose the most affordable options of every brand. In light of these facts, there is absolutely no economic justification for marketers to view the millennials as the must-have target audience.

  The generational theory is a marketing myth that doesn’t bring any benefit to marketers. I have never met a manager who utilized this theory to make effective decisions.

  BRAND LOYALTY

  46.  Br

  and Loyalty Is Formed by Habit

  Most marketing directors think that repeat purchases of a brand (loyalty) are due to the fact that people attribute some special meaning and significance to the brand.

  However, the reason that consumers continue to buy a brand is a result of their tendency to live their lives according to the “principle of least effort,” not because they believe brands have “one of a kind” significance. People want to make decisions with as little cognitive effort as possible, so they opt for solutions they’ve tried in the past without incurring new risk (details in chapter 11). The real reason
for people’s brand loyalty is their desire to make their life easier. If a sales point doesn’t carry a brand they’re accustomed to buying, they buy a rival brand that’s present rather than going to look for their usual brand at a different location.

  Even consumption decisions for which people pay no money are basically habits. Many people have hundreds of television channels in their homes, but they generally surf an average of ten to fifteen channels. Even though it costs nothing to choose different channels, habits are like a rut they get stuck in.

  In repertoire markets like fast-moving consumer goods, supermarkets, clothing, travel and entertainment, people buy from multiple brands during the same period, not a single brand. Consumers are polygamously loyal to brands. Brand loyalty does exist in every product category. In fact, people will repeatedly purchase brands they’ve tried before in commodity-dominated categories like rice, flour and beans, where brand has no significance and where there is no advertising. However, as Byron Sharp points out in How Brands Grow, the brand loyalty that people exhibit is not a passionate loyalty of absolute devotion, but an ordinary type of loyalty defined by habits.