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14 Oct 2024 06:22

Advertising & Marketing

Your brand’s growth today was decided long ago

It is a depressing idea isn’t it? But unfortunately, for most brands, how well a brand grows market share this year was decided in the past. Not just last year, but even longer ago. But then this finding should only come as a surprise if you have forgotten that what your brand stands for is important. Meaningful differentiation is the foundation on which strong, growing brands are built.

Growth in the Past

I have just completed an analysis looking at brand growth over a five year time frame using BrandZ. The dependent variable was the change in Consumer Loyalty score for each brand (this is the metric that most closely corresponds to actual market share). In most cases large changes in Customer Loyalty were verified using independent data sources like Euromonitor or news reports.

Here are some topline findings from the analysis:

Most brands do not change share that much. Projected market share rose for about 1 in 5 brands, fell for 1 in 5 and the rest remained largely the same.

Brands that gained ground tended to be smaller but relatively well-differentiated compared to their competition five years ago. In many cases it seems that success relied on taking something that was different about the brand and making it resonate with more people.

Brands that lost ground tended to be big and salient five years ago and were often undermined by new category entrants, e.g. Nokia was sidelined by the iPhone and its me-toos.

Growth depends on increasing brand salience but brands will grow faster if they are well differentiated to start with. Brands that were more likely to be thought of as different from other brands or setting the trends in the category five years ago, are likely to grow at a faster rate than the average.

A few brands that were not well-differentiated in 2007/8 managed to buck the general trend and grow. One that I have mentioned a few times on the blog is Samsung, but another is Hyundai in Brazil where the brand introduced a small SUV tailored to the needs of Brazilians. In cases like these, meaningful innovation was critical to changing perceptions of the brand.

Part of the reason that I say how well a brand grows market share this year is decided in the past is because meaningful difference is often intrinsic to the brand, think Red Bull, Apple, Chipotle, Chobani or Mini. Meaningful innovation can make an otherwise lack luster brand successful but for many product categories innovation cycles are measured in years not months.

Finally, my analysis suggests that irrespective of how well-differentiated they are all brands benefit from increased salience. However, the benefits of excess share of voice (where share of voice this year is greater than share of market) are usually not apparent until the following year. Unless yours is a frequently bought product category, most of your target audience will probably not have the opportunity to buy your brand until long after your new campaign launches.  

My overall conclusion is that if you are working on a brand where the foundation for growth has not been laid in the past then you are unlikely to generate much growth this year. Effective marketing is about building for the future not just creating publicity today. So what do you think of these findings? What are the implications for marketers? 

Written by Nigel Hollis,Executive Vice President and Chief Global Analyst at Millward Brown 

 

Source:Millward Brown 

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