how brands grow: what marketers don’t know

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This article was downloaded by: [The Aga Khan University] On: 16 December 2014, At: 01:45 Publisher: Routledge Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK Journal of Marketing Management Publication details, including instructions for authors and subscription information: http://www.tandfonline.com/loi/rjmm20 How brands grow: What marketers don’t know Peter Reeves a a University of Salford, UK Published online: 07 Nov 2013. To cite this article: Peter Reeves (2013) How brands grow: What marketers don’t know, Journal of Marketing Management, 29:13-14, 1644-1647, DOI: 10.1080/0267257X.2013.832029 To link to this article: http://dx.doi.org/10.1080/0267257X.2013.832029 PLEASE SCROLL DOWN FOR ARTICLE Taylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”) contained in the publications on our platform. However, Taylor & Francis, our agents, and our licensors make no representations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose of the Content. Any opinions and views expressed in this publication are the opinions and views of the authors, and are not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be relied upon and should be independently verified with primary sources of information. Taylor and Francis shall not be liable for any losses, actions, claims, proceedings, demands, costs, expenses, damages, and other liabilities whatsoever or howsoever caused arising directly or indirectly in connection with, in relation to or arising out of the use of the Content. This article may be used for research, teaching, and private study purposes. Any substantial or systematic reproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in any form to anyone is expressly forbidden. Terms & Conditions of access and use can be found at http://www.tandfonline.com/page/terms- and-conditions

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Page 1: How brands grow: What marketers don’t know

This article was downloaded by: [The Aga Khan University]On: 16 December 2014, At: 01:45Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954 Registeredoffice: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK

Journal of Marketing ManagementPublication details, including instructions for authors andsubscription information:http://www.tandfonline.com/loi/rjmm20

How brands grow: What marketersdon’t knowPeter Reevesa

a University of Salford, UKPublished online: 07 Nov 2013.

To cite this article: Peter Reeves (2013) How brands grow: What marketers don’t know, Journal ofMarketing Management, 29:13-14, 1644-1647, DOI: 10.1080/0267257X.2013.832029

To link to this article: http://dx.doi.org/10.1080/0267257X.2013.832029

PLEASE SCROLL DOWN FOR ARTICLE

Taylor & Francis makes every effort to ensure the accuracy of all the information (the“Content”) contained in the publications on our platform. However, Taylor & Francis,our agents, and our licensors make no representations or warranties whatsoever as tothe accuracy, completeness, or suitability for any purpose of the Content. Any opinionsand views expressed in this publication are the opinions and views of the authors,and are not the views of or endorsed by Taylor & Francis. The accuracy of the Contentshould not be relied upon and should be independently verified with primary sourcesof information. Taylor and Francis shall not be liable for any losses, actions, claims,proceedings, demands, costs, expenses, damages, and other liabilities whatsoever orhowsoever caused arising directly or indirectly in connection with, in relation to or arisingout of the use of the Content.

This article may be used for research, teaching, and private study purposes. Anysubstantial or systematic reproduction, redistribution, reselling, loan, sub-licensing,systematic supply, or distribution in any form to anyone is expressly forbidden. Terms &Conditions of access and use can be found at http://www.tandfonline.com/page/terms-and-conditions

Page 2: How brands grow: What marketers don’t know

Journal of Marketing Management, 2013Vol. 29, Nos. 13–14, 1644–1652

Book Reviews

How brands grow: What marketers don’t know, by Byron Sharp, OUP Australia andNew Zealand, 2010, 246 pp., £22.50 (hardback), ISBN 978-0-19-557356-5

The book is concerned with showing how marketing science and quantitativeempirical research can offer a series of generalisations as to how companies canachieve brand growth. To achieve this, the book builds upon seminal work bypioneering marketing scientists such as Ehrenberg and Goodhardt, who have greatlyinfluenced the work of this volume’s principal author and other researchers at theEhrenberg-Bass Institute, University of South Australia. It is clear from the outset thatthis book is a challenging read and is often critical of the way practice, teaching, and,in some instances, research adopts ‘taken for granted’ beliefs about the fundamentalsof brand growth without appealing to and taking notice of empirical evidence thatmay cast doubt on such assumptions. Hence, the volume is an attempt to critique anumber of fundamental brand growth assumptions using empirical data as its basis(displayed in interesting tables) from cross-sectoral industries, and examples relatingto countries around the globe.

The narrative begins by challenging the reader to recognise what Sharp regardsas commonly disseminated fundamental errors in contemporary marketing thought.Hence, the volume is perceived as ‘myth busting’ (p. 15) and sets the scene fora reasonably clear structure based upon a series of ‘law-like reoccurring patterns’(p. 14).

‘Double jeopardy law’ is introduced, which Sharp uses as a basis to proveempirically that brands with smaller market shares not only have a smaller numberof buyers, but these buyers show slightly less brand loyalty than brands with largermarket share (see also Ehrenberg, Goodhardt, & Barwise, 1990). He critiques thesometimes received wisdom that brands of differing sizes have highly differingaverage purchase frequencies, and shows that brand loyalty does not vary muchacross various product and geographic markets. The author shows that the bigger thebrand, the higher the degree of market penetration. Hence, there is said to be doublejeopardy ‘because smaller brands get “hit twice”: their sales are lower because theyhave fewer buyers who buy the brand less often’ (p. 19). Therefore, the author makesclear that faster-growing brands do so because of increased market penetration ratherthan increases in purchase frequency (i.e. targeting brand loyal buyers). Sharp arguesthat reducing customer defection is difficult and expensive because of ‘retentiondouble jeopardy’ (p. 216). He suggests that brands with larger market shares sufferfrom slightly lower levels of customer defection (greater loyalty), and converselybrands with smaller market share have higher rates of customer defection (lowerlevels of loyalty). Thus, put simply, ‘loyalty declines with market share’ (p. 36).Therefore, Sharp presents a case for emphasising growth in a firm’s customer baseby acquiring buyers, as this, he argues, is more beneficial to a firm than reducingcustomer defection levels. Moreover, he suggests that although there may be a smallnumber of very highly committed customers of a brand, this does not have significantstrategic importance for a business. Rather, it is articulated that the focus should

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Book Reviews 1645

be on the majority of buyers who are significantly less committed to the brand, butnonetheless represent a significant proportion of sales revenue.

The volume also presents a critique of the often received wisdom that 20% of afirm’s customer base provides 80% of its sales revenue. The author argues that thisis overstated, and suggests that the top 20% of a firm’s customer base only typicallyprovides just over 50% of its sales revenue per year. He argues for a sophisticatedmass marketing approach that reaches all buyers in a category (and especially lightoccasional brand buyers) if a brand is to sustain its market share or grow further. Theimportance of light occasional buyers is made clear for achieving brand growth giventhat there are by definition such substantial numbers of this group of buyers, andhence they make a very substantial contribution towards sales revenue. The ‘law ofbuyer moderation’ (p. 50) is also introduced, whereby, over time, there is said to be a‘regression to the mean’ as (a) heavier users become lighter, (b) lighter users becomeheavier buyers of the brand, and (c) non-buyers may begin to purchase the brand.

Sharp also critiques the frequent assertion in marketing that brands have to bedifferentiated in order to appeal to a specific market segment. Rather, it is argued thatas market share increases for a brand, the more similar a firm’s customer base becomesof the total potential customer base for a given product category in a particularmarket. Thus, brands within a product category sell to very similar customer basesin terms of their aggregated consumer behaviour profiles, and hence potentiallycompete with all brands in the category. The ‘duplication of purchase law’ is alsointroduced which states that ‘all brands, within a category, share their customerbase with other brands in line with the size of those other brands’ (p. 79). Thesethemes are developed further in a co-authored chapter by Sharp and Romaniuk whocriticise the notion of brand differentiation. Using empirical data, they argue thata significant majority of consumers perceive there to be very weak differentiationbetween rival brands (a finding which is supported by Ehrenberg, Barnard, & Scriven,1997). Instead, Sharp and Romaniuk suggest that the focus of branding shouldbe more in terms of ‘building distinctive assets’ (p. 131) such as logos, colours,celebrity endorsements, and so on that enable potential buyers to notice, recognise,and recall the brand. This enables Sharp to advance later what he terms the ‘law ofprototypicality [whereby] image attributes that describe the product category scorehigher’ (p. 217) than non-descriptive image attributes.

Up to this point in the book, the focus has been on more strategic aspects ofenabling brand growth. However, in the later stages of the volume, the focus turnsto more functional and tactical areas of marketing, which include advertising, pricepromotions, and loyalty programs. To begin with, Sharp argues that the effects ofbrand advertising are difficult to measure given that ‘advertising’s sales effects arespread out in time. This means that the effects of today’s advertising is layered verythinly across sales figures over a long time period’ (p. 137). Therefore, successfuladvertising works by continuously ‘reaching and nudging’ (p. 144) light buyers of thebrand, thereby increasing their propensity to buy the brand in the future.

The book pays attention to loyalty programs, as Sharp uses empirical evidencefrom a Ehrenberg-Bass Institute Study (with his arguments supported by otheracademic studies, e.g. Leenheer, Van Heerde, Bijmolt, & Smidts, 2007; Meyer-Waarden & Benavent, 2006; Verhoef, 2003) to argue that ‘loyalty programs producevery slight loyalty effects, and do practically nothing to drive growth’ (p. 175). Thisis because, as Sharp frankly asserts, ‘loyalty programs are good at recruiting existingbuyers of a brand (both heavy and light category buyers) but lousy at recruiting heavycategory buyers who are not current buyers of a brand’ (p. 177).

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1646 Journal of Marketing Management, Volume 29

Chapter 10 is authored by colleagues of Sharp at the Eherenberg-Bass Institute,and in this chapter, Dawes and Scriven critically appraise the value of pricepromotions. They draw upon Ehrenberg, Hammond, and Goodhardt (1994) tosuggest that ‘almost everyone who bought a brand during a price promotion hadbought the brand previously’ (p. 157). On this basis, Dawes and Scriven contend that‘what price promotions do (for established brands) is to jolt the short-term buyingpropensities of mainly infrequent buyers who take the opportunity to buy the brandcheaply and then resume their normal purchase behaviour afterwards (i.e. to buy itsometimes as part of a wider repertoire’(p. 158). Put simply, ‘price cutting gives alot away to people who would buy the brand anyway’ (p. 168). They suggest that ifprice promotions are done significantly and too frequently, then the buyer’s ‘referenceprice’ for the brand may be lowered.

The book concludes by arguing that the key to brand growth is making thebrand both physically available (via depth and breadth of distribution) and mentallyavailable (through clear and distinctive branding) to buyers. The final chapterprovides a summary of the laws postulated in the volume, and provides reference tofurther reading on the NBD-Dirichlet model (e.g. Ehrenberg, Uncles, & Goodhardt,2004; Goodhardt, Ehrenberg, & Chatfield, 1984).

Marketing science as a sub-discipline of marketing tends to be highly quantitative,using complicated statistical procedures that are often beyond the scope ofunderstanding for all but the most quantitatively able. Hence, marketing sciencecurricula is often neglected in undergraduate and postgraduate study in thatthe content is often perceived by lecturers as being inaccessible because ofmethodological complexity. This is where the value of this book lies in that it takessome of the fundamental principles of marketing science and presents them andexplains them in a way that an intelligent student would be able to grasp. In otherwords, it opens up the sub-discipline to a wider potential audience.

A further strength of the volume is that whilst statistical and algebraic procedure isnot detailed in the volume, it is well referenced to the original scholarly sources thatthe more interested reader may wish to explore. Hence, the book can be regarded asa substantial advancement in that it disseminates and extends key seminal findings inmarketing science which are published in scholarly journals and presents them in abook narrative that is more accessible to audiences.

There seems to be no other widely available text in the market that covers suchmarketing science research. The book is perhaps suited to advanced modules inmarketing science on either specialist bachelor’s marketing degrees, or specialistmaster’s degrees in marketing. For the practitioner (which seems to be one ofthe primary audiences the author/ publisher appears to be targeting), there aremany interesting arguments which they may benefit from, but this volume requiresa careful considered reading to appreciate its value fully. The volume is of useto marketing academics who are likely to derive future research implications andtrajectories. An omission from the bibliography in the volume is, however, theinfluential Ehrenberg (1988) book, which may be worth revisiting by marketingscholars in light of Sharp’s new publication. However, scholars who emanate beyondthe traditions of marketing science may feel some degree of intellectual discomfortwith arguments throughout Sharp’s book (and indeed many other contributions inmarketing science) being based on positivistic style laws and rules of marketing.

The purchase of this volume is recommended for those who wish to developtheir understanding of marketing science further. It is a well-presented volume that

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Book Reviews 1647

is of reasonable length. It represents value for money, particularly when there isconsideration of the substantive and in-depth research on which it is based.

References

Ehrenberg, A. (1988). Repeat-buying: Facts, theories and applications (2nd ed.). Oxford:Oxford University Press.

Ehrenberg, A., Barnard, N., & Scriven, J. (1997). Differentiation or salience. Journal ofAdvertising Research, 37(6), 7–14.

Ehrenberg, A., Goodhardt, G., & Barwise, T. (1990). Double jeopardy revisited. Journal ofMarketing, 54(3), 82–91. doi: 10.2307/1251818

Ehrenberg, A., Hammond K., & Goodhardt, G. (1994). The after-effects of price-relatedconsumer promotions. Journal of Advertising Research, 34(4), 11–21.

Ehrenberg, A., Uncles, M., & Goodhardt, G. (2004). Understanding brand performancemeasures using Dirichlet benchmarks. Journal of Business Research, 57(12), 1307–1325.doi: 10.1016/j.jbusres.2002.11.001

Goodhardt, G., Ehrenberg, A., & Chatfield, C. (1984). The Dirichlet: A comprehensivemodel of buying behaviour. Journal of the Royal Statistical Society, 147(5), 621–655. doi:10.2307/2981696

Leenheer, J., Van Heerde, H., Bijmolt, T., & Smidts, A. (2007). Do loyalty programsreally enhance behavioral loyalty? An empirical analysis accounting for self-selectingmembers. International Journal of Research in Marketing, 24(1), 31–47. doi:10.1016/j.ijresmar.2006.10.005

Meyer-Waarden, L., & Benavent, C. (2006). The impact of loyalty programmes onrepeat purchase behaviour. Journal of Marketing Management, 22(1/2), 61–88. doi:10.1362/026725706776022308

Verhoef, P. (2003). Understanding the effect of customer relationship management efforts oncustomer retention and customer share development. Journal of Marketing, 67(4), 30–45.doi: 10.1509/jmkg.67.4.30.18685

Peter ReevesUniversity of Salford, UK

E [email protected]© 2013, Peter Reeves

http://dx.doi.org/10.1080/0267257X.2013.832029

Branded male: Marketing to men, by Mark Tungate, Kogan Page, 2008, 256 pp.,£19.95 (hardcover), ISBN 978084950113

Branded Male: Marketing to Men is an excellent book. The content, writing style,and humorous approach make it very easy to read, whilst remaining incrediblyinformative. The actual style of the book is fascinating. It has been written from theperspective of following a fictional man’s journey through the day, and consequentlythe various interactions he has with products and services that he encountersthroughout the day, and specifically the way in which they have been marketed tohim.

Each chapter represents a new interaction or new product/service that ourprotagonist encounters, following a sequence that accurately reflects the modern

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