How Brands Grow

by Byron Sharp

  However, Erik du Plessis (2005) points out that one of the primary aims of emotional content in advertising is to gain attention. He draws on considerable empirical evidence showing the link between ad liking and ad awareness. Some years prior to meeting Erik, Dr Rachel Kennedy and I had been making the same argument: that the gentle, if complex, emotional reaction of liking increased the sales effectiveness of advertising , because it encouraged consumers to pay a little more attention. In her doctoral work Rachel showed that, in general, ads that were better liked were also more likely to be correctly branded (certainly not less as many advertising agencies assert). She replicated Erik's COMMAP as a model to explain ad liking (see Figure 12.1).

  We also know that brand usage has a powerful affect on ad liking, and also affects noticing. This fits with the psychological concept of cognitive dissonance; it also fits with the concept of mental availability that we are better able to process things if they relate to established memory structures (see Rule 4 below); and it fits with extensive research showing that we have implicit and explicit memory. Explicit memories are the memories we are able to retrieve into our consciousness, like remembering that yesterday we went to the beach. Implicit memories can't be recalled like this, but evidence of their existence shows up implicitly, such as in test performance. For example, people who are exposed to a statement, even if they can't remember it, are more likely to rate that statement as true than people not previously exposed to the statement. It also shows how we favour the familiar and shows how memory affects our behaviour even when we don't realise it. Even consumers standing in front of supermarket shelves where all the brands are clearly displayed are being powerfully affected by memories – which brands they actually see is affected by memories. This means we may notice a brand on the shelf, and feel slightly more positive about it, simply because we have seen it more (or its advertising more) without the slightest realisation that this has happened.

  Figure 12.1: A model to explain ad liking

  A well-documented psychological phenomenon is that consumers know how often they have been exposed to a brand (i.e. how often they have seen it advertised or seen it in real life). It seems we have an in-built counting mechanism (see Hasher & Zacks 1984). As humans evolved this mechanism was presumably very useful in helping to distinguish between the familiar and unfamiliar and to detect subtle differences (e.g. not as many birds in the forest) that might indicate danger.

  All this means that clever, likable creativity is a way to get advertising noticed. But it is only one way. What we see depends on what is already in our heads; therefore, the following rules matter too.

  Rule 4: Refresh and build memory structures

  Even if a brand's advertising is noticed it can't work unless it refreshes or creates useful memory structures for the brand. This requires understanding what consumers already have in their minds and then working with this, not against it. This is the purpose of brand image research, to understand existing memory structures so that communication can be crafted to reflect them.

  It's a shame when high-quality, creative advertising fails to do anything for the brand; and yet this happens regularly because the advertising didn't reinforce or build appropriate memory structures. For example, Miller Lite ran a creative series of 'man law' television commercials. These commercials featured an interesting collection of minor celebrities (like Burt Reynolds) who would debate an issue and make a ruling (a 'man law'). These celebrities ruled on issues like, 'Is the high five overused?', 'If a girl breaks up with your best friend how long do you have to wait before you can ask her out on a date?' and 'Are wireless headsets useful or a technology gone bad?' The advertising campaign attracted much attention: there were web site discussions about man laws, the commercials were posted to YouTube by fans and radio stations mimicked the campaign and held talk-back discussions on their own man laws. However, the commercials didn't look like Miller Lite advertising (the humour was more typical of rival brand, Bud), they seldom mentioned beer and nothing about Miller. So what memory structures did they refresh or build? They built the concept of 'man laws' and tellingly, nearly every YouTube post described the commercials as the 'man law' commercials not the 'Miller Lite' commercials. After months of continued decline in sales, Miller dropped the campaign; as Advertising Age wittily stated, Miller decided that market share losses violated man law (Mullman 2007).

  For new brands, the emphasis must be on building the memories that consumers use to buy the brand; for example, what the brand actually does, what it looks like, what the brand name is, where it is sold and where and when it is consumed. These are simple, but essential. Forgetting to tell consumers these things is a marketing sin, as is underestimating how difficult this task will be and how long it may take. With this in mind, simplicity is a virtue. Apple's iPod is a wonderful example. This MP3 player launched into an existing market where there was already considerable choice in technological product features. Digital compressed music was new, slightly complicated technology. Apple launched a single model, with a distinctive, attractive design and characteristic white headphones. The headphones and the play button were prominent, taping into existing memory structures and explaining what the product did. The brand name, iPod, was simple and distinctive; it communicated 'new technology' in a friendly, non-technical manner. And everything was reinforced with the verbal explanation “A thousand songs in your pocket”. Notice that Apple did not mention the term 'MP3 player' – their advertising didn't talk about this new technology at all. The iPod advertising was also extremely consistent, over time and across media. It always employed the same silhouette figures against colourful backgrounds and these figures were always joyfully dancing (while listening to their iPods) and the white headphones were always obvious. Technical details were left to sales people and web sites to explain, where necessary.98

  For established brands (i.e. for most advertising) the need to refresh is paramount. Even Coca-Cola's marketers have to remind people (not explain) that it's a refreshing drink especially when you are hot. Building a new memory structure for an existing brand is a long-term project. It's not something that should be taken lightly or undertaken often. Each year's marketing plan should not have a new objective for a new memory structure. Each advertising campaign should largely be saying the same thing. Even when it introduces a piece of new information (e.g. 'Now in blue') it should still tell the old story (i.e. work for the brand).

  Rule 5: Create and use distinctive brand assets

  Branding matters. Successful businesses have been built by simply introducing branding to a category. For example, Subway recognised that sandwiches were popular throughout the world, and yet there were no branded sandwich shops. What an opportunity sitting under all of our noses! Today, people recognise Subway's brand when they look down a street or drive past. This recognition allows Subway to out compete the less visible, unbranded sandwich shops (even though many are offering a superior product).

  There are three main reasons why distinctive brand assets (descriptive memories) matter. First, branding allows consumers to be loyal to particular brands and to adopt heuristics like buying 'their brand' or 'the one they noticed'. Without branding, loyalty (which is a natural behaviour) has to be directed to something: else – like a price point, a position on the shelf or 'whatever is on special'.

  Second, branding lets consumers know which brand the advertising belongs to so that their memory structures are refreshed for the right brand. Without this, advertising cannot refresh memory structures for a brand (in short, it can't work). The effect is powerful, with consumers who are more familiar with a brand far more likely to notice the brand's advertising.

  Branding is the creation of distinctive brand assets. Mental associations act like coat-hangers: they allow other memories and associations with a brand to hang or form. iPod's white headphones (earbuds) are a distinctive asset; even by themselves in any ad they say 'iPod'. The Jolly Green Giant, the M&M characters, PG Tips' chim
ps, the Mercedes Benz 3-pointed star, Nike's swoosh, Mastercard's 'priceless', L'Oreal's 'because you're worth it', and Puma's puma logo all do the same.

  Some brands have developed a portfolio of assets that are visual, aural and verbal. Some assets are more flexible than others and are more easily used across different media.

  These assets allow a brand's communication to work. A brand's distinctive imagery isn't processed deeply with any great meaning; consumers seldom pause to think about a brand's logo, name, etc.; certainly not the way that ad agency people do. Let me illustrate this with some examples. Hardly anyone has ever thought about why McDonald's, an American burger chain, has a Scottish name. In Australia there is a successful food brand called Sanitarium (a name not far off sanatorium). In France, Procter & Gamble don't translate the brand Head&Shoulders into Tete et Épaules; they use the English brand name. Walker's crisps dominate the UK potato snack category, while Walker's shortbread is probably the most famous Scottish shortbread brand, yet no-one ever asks if it is the same company. Few people ask what Nestlé means, or what BMW stands for, or what a name like Fannie Mae has to do with financial services.

  A brand's distinctive devices and sounds are processed very quickly by viewers; they are primarily used for recognition, to help work out what is going on and to assist people's brains to access and file information. This is why distinctive brand assets work. This is branding.

  Third, distinctive brand assets are so important because these descriptive memories facilitate a brand being noticed. We are able to see a brand because we recognise its iconography. Given that even in a retail setting when we are looking for things to buy we still don't notice most things in the store, distinctive brand assets make a brand salient.

  Table 12.5: Examples of distinctive assets

  McDonald’s The golden arches (yellow on red), sesame seeds on a bun, Ronald McDonald clown

  Coca-Cola The contour bottle, red, the swirl

  Disney The castle, Mickey mouse ears, Tinkerbell, Pixar’s animated lamp

  Rule 6: Be consistent, yet fresh

  A brand can’t be distinctive unless it is consistent.

  The potential longevity of brands is considerable. Compared with the lifespan of companies, or the professional lifespan of managers, brands seem immortal. The brands that have dominated for decades have done so by being consistent, not by repositioning.

  Too often this is forgotten, and the desire to present something new wins. Similarly, much advertising trips over itself trying to present persuasive, differentiating messages. Consumers are resistant to new ideas, yet they are very happy to be reminded of things they already believe, particularly if it is done in an entertaining way.

  A large part of the art of advertising is telling the same story, over and over, but in new and entertaining ways (e.g. the hero saves the day and the bad guy loses).

  The negative binomial distribution (NBD) pattern of buying shown in Chapter 4 is a sobering reminder of why brands need to be consistent. This skewed purchasing pattern is matched by a similar pattern of media consumption and advertising viewing. A few consumers have noticed a band's advertising, while the vast bulk of the brand's consumers hardily ever see any – and when they do, it is a long time between exposures. Even the slightest inconsistency is confusing. Not that consumers are often confused by advertising (in the sense of feeling frustrated) – they rarely engage enough with advertising for this to happen. Confusing advertising simply washes over them; they don't take it in.

  Packaging changes are particularly hard on a brand's legion of occasional buyers. This is why there are so many stories of companies changing a pack and experiencing a sudden and dramatic drop in sales.

  Rule 7: Stay competitive – don't give a reason not to buy

  Evaluation is over-rated. Brands largely compete in terms of mental and physical availability. This doesn't mean that product features, and consumer evaluation, aren't important – just that they operate within this battle for attention.

  When people go to buy a brand, a huge part of the selection process (yet a part they hardly notice; they don't even think of it as part of the decision) is the act of not noticing and/or not considering most options. A buyer evaluates and selects a very limited number of brands – the ones that are noticed or recalled, which often can be a single brand. So while positive features and perceptions help a brand to be chosen, they only do so when they are part of the selection set (i.e. after the buyer has culled most of the other brands). Over time, feature advantages can build mental and physical availability. This means that advantages in a product's features, while important, are less crucial than the business press makes out. This is especially true for established brands with significant market-based assets.

  Another way of putting this is that brands that are easier to buy for more people get bought more. Which reminds me that reasons not to buy can therefore be much more important (to sales) than reasons to buy. Generally, marketers are quite sensitive to 'reasons not to buy', or at least to negative publicity. Yet it is not uncommon for marketers to spend much effort trying to communicate a 'reason to buy' (Value proposition', USP, differentiating factor, etc.) and yet be quite blasé about features that turn consumers away. For example, many food products still contain trans fat when they don't need to. In some countries, this means the product has to carry a small warning (like 'contains hydrogenated vegetable fat') – you'd think this would be enough to catch their marketers' attention and concern.

  High prices can also be another reason not to buy. Too many brands are over-priced and also over-discounted. It's as if marketers know that the price is too high, so out of guilt they regularly discount the product.99 A brand should be priced competitively: this doesn't mean cheap and it doesn't mean it needs to be given away on special. A competitive price is enough to attract and retain customers. An excessive premium gives customers a reason not to buy, a reason to stop, think and reject the brand. Think about the memory structures that this builds (e.g. 'I don't buy this brand!'). An excessive price also encourages retailers to launch a private-label competitor. None of this is fixed by occasional discounts.

  It's very difficult to get consumers to notice a brand; when marketers succeed in this, consumers reward the brand with a degree of loyalty (largely due to habit and inertia). However, this can be ruined if they suddenly notice a reason not to buy. Marketers should always be on the look out for such barriers. This is one of the reasons that differentiation needs to be approached with caution: being different and appealing to one group in the market can turn consumers away.

  A final word on how to grow

  There are only a few key strategies to grow a brand. You can lower the price (and sacrifice profit margins), but this is self-defeating because the reason a brand wants to grow is to improve sales revenue and margins not reduce them. You can improve the quality of the product or service for the same price, but this also negatively affects profit margins. Essentially, these two strategies are similar and not attractive. Everyday brand managers are trying to reduce costs and improve quality to stay competitive – usually that's about as far as you want to go with this strategy.

  The other way to grow a brand is to invest in market-based assets – to improve the brand's mental and physical availability. However, simply spending more on advertising will have similar results to the strategy above; it will cut your profits and there may be little to show for it afterwards. The trick is to make an investment that builds the brand's assets, so that in future the marketing budget gets a greater return. That means better advertising and marketing. Building a distinctive memory structure achieves this; it enhances all future advertising (remember it is much easier to refresh existing memories, so advertising for brands that have distinctive elements embedded in people's minds suffers less from brand ambiguity). Obtaining new physical distribution has a very similar effect; again advertising and other marketing efforts work better if a brand is more widely available.

  The
third option to stimulate a brand's growth is to innovate and bring new or improved, desirable features to the marketplace. However, such advantages seldom last long, so it is important to 'make hay while the sun shines' and work fast to use the advantage to build penetration and enhance the brand's market-based assets. New or improved features are something to talk about; they attract attention and generate publicity. Unfortunately, a lot of 'innovation' is not exciting or newsworthy.

  There is no magic key to growth. It's difficult because the potential returns are great and all your competitors are trying to grow too (at your brand's expense). But you are much more likely to succeed when it's understood that the key objective is to build its market-based assets. The brand must be easier to buy for more people in more situations. Market penetration is a good proxy measure for these assets, and so worth monitoring as a key metric. It's better than overall sales, because sales can be distorted by price promotions and other efforts that target your heavier, existing consumers.

  Growth is possible – all the laws of marketing in this book support this – and it doesn't just depend on new products. Better advertising, better branding, better media strategy, better in-store displays by following the seven rules presented above – these are all paths to growth.

  A fine future for marketing

  Few marketing departments see themselves as custodians of the precious market-based assets of mental availability and physical availability – at least not yet. While it is commonplace to talk about building strong brands (rather than short-run sales), brand managers have little specialist knowledge about building and managing these assets, and rarely if ever do they have comprehensive metrics covering mental and physical availability. Their efforts are seldom judged against such metrics. Considerable time is wasted on esoteric quackery concerned with segmentation, differentiation and how buyers perceive brands (e.g. brand personality).