Balancing Growth Strategies and Brand Purpose

Recently in my CRM fundamentals class, our professor Stephanie Pajevic-Wallace shared some amazing reads on Dr. Byron Sharp and Harold Hotelling's theories. It changed my outlook on how brands think about market penetration and brand purpose. I decided to write my own opinion piece delving into the core concepts of Sharpian theories, exploring a counterpoint to his ideas, and providing my research-based perspective on finding a balanced approach in today's marketing landscape.

In the ever-evolving world of marketing, there are thought leaders who have made a significant impact on how brands approach growth and market penetration. One such prominent figure in marketing science is Dr. Byron Sharp, serving as a Professor of Marketing Science and Director at the Ehrenberg-Bass Institute. He has garnered attention for his influential book "How Brands Grow."

Dr. Byron Sharm has made waves in the marketing world with his ground-breaking theories. He distinguishes between two crucial aspects of marketing: physical availability and mental availability.

• Physical Availability: This concept emphasizes the importance of making a product readily accessible for purchase. It's akin to ensuring a product is visible on store shelves or appears prominently in online search results.
• Mental Availability: On the other hand, mental availability focuses on making a brand memorable and easily recalled by consumers. This involves creating strong brand associations in consumers' minds.?

Tapping into ultra-light buyers to deepen market penetration

One of Sharp's key insights revolves around the idea of targeting ultra-light buyers—individuals who infrequently purchase a specific brand or product. He argues that to expand a brand's reach and influence, targeting these light buyers is vital rather than solely focusing on the highly loyal customer base. By appealing to a broader spectrum of buyers, including those who may not purchase the product often, a brand can achieve a deeper market penetration. (Tiltman, 2020).

Challenging the Sharpian wisdom

Another such prominent figure was Harold Hotelling, an American mathematical statistician, and an influential economic theorist. (Wikipedia contributors, 2023). He was also associated with Stanford University, Columbia University and the University of North Carolina-Chapel Hill as a member of the faculty. Among his many theories, he is best known for Hotelling’s law. (Hayes, 2022).

In a contrasting viewpoint, Hotelling's law challenges the notion of strictly adhering to Sharp's laws for brand growth. With a simple hotdog stand analogy, we can understand why positioning a brand strictly for maximum penetration may not always be the most socially optimal or responsible strategy. It argues that pursuing growth and maximizing penetration can lead to a lack of meaningful differentiation and no consideration for societal and diversity-related factors. (Liddell, 2021).

Imagine a street with 2 hot dog stands. If both stands try to cater to the exact same audience by offering identical hot dogs, they will essentially be competing for the same customers. This scenario disregards diversity and individual preferences. It also neglects the potential for innovation, unique flavours, and social responsibility. (Liddell, 2021).

My own opinion: Should we follow Sharp's wisdom, challenge it with Hotelling's law, or find a middle ground?

So, where does this leave us in the marketing landscape?

My research-based opinion suggests that Byron Sharp's theories offer valuable insights for achieving brand growth and market penetration, but they should not be followed blindly. While penetration and mental availability are essential, it's crucial to balance this approach with considerations like brand purpose, brand voice, product/service differentiation, and societal responsibility- values that resonate with consumers. In my research, I came across a statement by Nina Siemiatkowski, founder and CEO of Milkywire. I agree with her viewpoint.

“Transparency is of growing importance among the younger generations. It leads to higher engagement and deeper brand resonance. Brands must therefore work on their storytelling, talking about who their work benefits and how. When a brand is transparent and authentic and its purpose and brand voice resonates with consumers’ own values, they are not only more likely to be associated with the brand but also will become an advocate for your brand. Thus, helping your brand to grow its consumer base even further. (Wertz, 2021).

The market is evolving, and consumers are also increasingly expecting brands to align with social and environmental values. Therefore, a more holistic approach that considers both growth and societal impact is necessary for long-term success and sustained brand relevance. It's not about dismissing Sharp's theories but about adapting them thoughtfully to changing market dynamics and consumer expectations. (Wertz, 2021).

In conclusion, navigating the marketing landscape requires a blend of strategic thinking, data-driven insights, and a commitment to societal responsibility. Having a single-minded approach to market penetration will eventually turn out to be detrimental in the long run. I feel brands that can strike the balance between market penetration and purposeful brand value marketing for strengthening customer relationships are well-positioned to thrive in a world where consumers demand not only great products but also purposeful, responsible, and differentiated brands.

Reference List

1. Hayes, A. (2022, June 2). Hotelling's Theory: Definition, How It Works, and History. Investopedia. https://www.investopedia.com/terms/h/hotellings-theory.asp
2. Tiltman, D. (2020, September 28). Byron Sharp on the legacy of How Brands Grow – and why he disagrees with Les Binet. WARC. https://www.warc.com/newsandopinion/opinion/byron-sharp-on-the-legacy-of-how-brands-grow--and-why-he-disagrees-with-les-binet/3837
3. Liddell, N. (2021, June 30). Byron Sharp – Brand Purpose and the Tyranny of the Majority. Brandingmag. https://www.brandingmag.com/2021/06/30/byron-sharp-brand-purpose-and-the-tyranny-of-the-majority/
4. Wertz, J. (2021, December 27). How Social Values Drive Consumers To Brands. Forbes. https://www.forbes.com/sites/jiawertz/2021/12/27/how-social-values-drive-consumers-to-brands/?sh=1f1eeaa27425
5. ?Wikipedia Contributors. (2023). Harold Hotelling. Wikipedia. https://en.wikipedia.org/wiki/Harold_Hotelling