Double Jeopardy? - "How Brands Grow Part 2" Review

How Brands Grow, the first book by Byron Sharp, was highly influential, so I was keen to read Part II, in which he and Jenni Romaniuk share more about the key concepts in their theory, and how they should be applied. This blog is an unapologetically ‘long read’ – but it’s a lot less long than the book, so bear with me. Please note that the views expressed are my own, and not those of The Value Engineers. They’re also based on my own experience of European food and car marketing – I leave you to decide if they have broader relevance.

Marketing relies on both creativity and science to succeed. Getting creative and mathematical people to work together needs teamwork, and it’s really important that both sides respect each others’ strengths. The Ehrenberg Bass Institute clearly represent a fairly left brain approach to marketing. My disappointment in this book is the disparaging attitude Jenni and Byron show towards marketers, who are portrayed as naive and haphazard. Their approach is to dismiss all that has gone before, determined that their way is the only way to grow a brand. I’m going to try to see beyond their dismissive attitude to my peers and colleagues in marketing to provide a constructive review of the book.

An important principle of How Brands Grow is the focus on ‘mental availability’. This is an interesting approach to understanding how we communicate with consumers. It recommends we keep a rounded understanding of the many ways in which people encounter our brands – using it, seeing people use it, through advertising, seeing branded delivery trucks, social media and word of mouth. The recommendation to stick with long used branding devices to build ‘memory structures’ also sounds like prudent advice. I’d like to hear more about how memory is encoded in the brain and the implications for marketing.

Jenni and Byron write at length about ‘double jeopardy’ – the observation that small brands have both lower penetration, and also lower loyalty. This information has been available in every Worldpanel data set we’ve looked at for decades, but it’s interesting to see the consistency across categories and markets. A bit more detail on how brands escape the trap of being small, with fewer, less loyal buyers would be helpful here. In the marketplace many fast growing brands – by definition – are currently small, and the book tells us little about how small brands overcome their disadvantages to grow.

I’d also question whether the double jeopardy rule is really a rule about brands or a rule about markets. When brands hit the shelf, in real marketplaces, selling to real people, most people buy most brands. This is hardly surprising – people like to try new things, have a repertoire of purchases, and modern retail presents a wide range of options. The niceties of brand positioning tend to be forgotten when your product is on a gondola end at half price, when it will be bought by people who wouldn’t normally choose your brand, or even your category. So consumers tend to buy lots of products and don’t display the loyalty Byron thinks marketers are obsessed with.

The book doesn’t address the fact that brands do, nonetheless, appeal to slightly different groups of people. When I was last clientside at Innocent, our products had a small but significant bias towards younger upmarket households, and an above average tendency to read the Guardian. Tropicana buyers had a slight bias towards older upmarket households, and liked reading the Mirror. Overall the populations are similar, but differences, which reflect the brand values, can be discerned. Byron and Jenni note that online shoppers are more loyal to brands than those who shop in stores, and this may support my hypothesis that double jeopardy has more to do with markets than brands. Their conclusion about double jeopardy – that there’s no point segmenting and positioning – seems risky. Your core target is the people who will buy your brand a bit more often than the competitors, even when it’s sold at full price, and consequently these customers are often more profitable than the ones that only buy when there’s a promotion. Your advertising does need to reach a lot of people, but it’s sensible to weight it towards those who have the greatest affinity for your brand. If you can appeal to the whole market – fine – but there is a risk that new market entrants will create a focussed proposition that has greater appeal to your core buyers, and leaves you reliant on promotions to keep your brand going (e.g. Walkers Sensations challenges with Kettle Chips, Tyrrells et al circa 2005-2010).

In the book they tell us that “The profile of your brand’s customer base should follow that of your category’s customer base. If it doesn’t, find out why your market is restricted, and fix it if you can.” “Use partition analysis to make sure you are playing in the whole market, and not locking the brand out of key subcategories because you don’t offer a suitable variant”. Following this logic, Innocent needs to launch cheap concentrated juice. Red Bull needs a healthy variant. Hendricks need a low cost gin for the less affluent. This is clearly not true. The existence of a space in a market does not mean it’s an opportunity for your brand. Most brands have limited resources, so activity needs to be prioritised, and you prioritise the parts of the market where your brand has the most helpful associations, and a marginally better likelihood of success. Brand extensions often fail, and getting the branding right is critical if your extension is to succeed. If a brand attempts to stretch into a new ‘partition’ where it’s brand associations are unhelpful, it’s likely to fail. The authors’ theory seems to be based on the assumption that all brands want to dominate the market they operate in. Some brands are attempting to leverage the factory they’ve got and don’t want to move into new areas requiring a different technology. Some brands (e.g. Brewdog, Innocent) are owned by founders who have principles and these define where they will operate, and the segment of consumers to whom they will appeal. So the advice given here feels both risky and grounded in assumptions that may not be relevant to brands seeking growth.

The authors also advise us to target multiple needstates (which Byron and Jenni call ‘Category Entry Points’ or CEPs) “Traditional texts tell us that a strong brand equals a strongly positioned brand. We have shown this to be misguided – strong brands don’t rely on a single proposition but are mentally available across a wide range of category needs.” “If you want to create a big brand you need to link the brand to the many CEP’s in the category – not just one or two”.  In a world of unlimited marketing budgets this advice would be fine, but a smaller brand with limited budget is likely to succeed by picking one or two needstates that are particularly relevant and building out from there. The advice on target consumers and needstates may be right for big brands who want to get a bit bigger, but it seems entirely wrong for small brands who need to focus their resources to build their business.

The authors also dislike the way we use the word ‘differentiation’:

“Differentiation is put forward as a meaningful difference that leads to purchase… so if your car offers all wheel drive when no other car does… then buyers should flock to your brand because it has something other brands do not… Distinctiveness is the brand’s identity and how it is recognised, and includes any sensory element that triggers the brand (visual, auditory, smell, touch). Distinctiveness is not why you buy something but how you know which brand it is or how you find it… These are very separate concepts – mixing them up is simply sloppy thinking.”

Some products like Doritos have a clear, measurable sensory advantage over its competitors – a source of functional differentiation – and can be advertised successfully by talking about “bold flavour” - and layering on some emotional boldness at the same time.

Some, like innocent juice, are not measurably different from the competitor, so need to have emotional benefits injected through branding. Is this sloppy thinking? Or just understanding that sometimes differentiation is functional and sometimes it’s emotional? I don’t think there’s much to be gained by bandying synonyms in this way.

The authors don’t like it when marketers describe their audience in anything other than a set of statistics “A really dangerous practice in modern marketing is to describe a market segment as a single person: for example, ‘our target consumer is Nicole, she’s 28 years old, is passionate about the environment and sustainability, shops at whole foods market, likes new experiences, reads classic literature but also watches Keeping up with the Kardashians as a gulty pleasure....This is the height of inane target marketing… lazy dangerous thinking that often finds its ways into advertising and media plans, and the brand ends up talking to only a fraction of its potential market.” Any decent insight manager knows that there are a range of ways to describe your audience, depending on who you’re talking to. These should include a mathematical statement of their buyer base, defined demographically, geographically and attitudinally, with an analysis of the differences between heavy, medium and light consumers. You’ll also need a snappy description of the key group they want to target, to give your creative colleagues some strategic inspiration from which they can develop a campaign. Besides which, you can’t go on a depth interview with an average. You need to pick some actual real live people who represent your customer base, and this requires that you move from the mathematical average to something more specific.

Finally, for a book that is proud of the quality of their science and data analysis, there are recommendations in the book that seem to be weakly linked to quite poor quality science. In their section about how to create brand extensions, they advise us that “…if dark blue is a parent brand asset, then perhaps make the variant packaging stripes in dark blue and another colour to keep a key colour consistent, but still generate a distinct visual image”  Our industry has developed some good quality science in this area. Best practice is get your design agencies to develop several different design options for your brand extension, and then use quantitative testing to understand how well they are recognised. The results of this will expose interesting and often unexpected nuances about how consumers identify your logo, and what confuses them. The advice given feels really unsophisticated and doesn’t seem to understand the high quality solutions many marketers have already adopted. If you’re going to write a book criticising the marketing community for failing to adopt scientific approaches, wouldn’t it have been helpful to understand what scientific approaches are being used in the first place?

So in summary, How Brands Grow part 2 illustrates the challenges that Byron and Jenny have had translating the theory of the first book into practical advice. It has some factual insights into how big brands work, and some of their advice may be helpful in keeping big brands big. Nonetheless, reading this at the end of 2015, I’m not sure how relevant the advice is to the strategic situation faced by big brands. Campbells CEO Denise Morrison early this year referred to a “mounting distrust of so-called Big Food, the large food companies and legacy brands on which millions of consumers have relied on for so long” The sum of the advice given is that brands should abandon principles, in order to sell everything, to everyone, everywhere. But in 2015 many big brands are facing competition from smaller brands defined by principles, which give them an advantage in public dialogue. While the strategies outlined in the book, based on historical data, create a strong narrative about how big brands have stayed big, I’m not sure it’s relevant to categories in which the big brands lose share to many smaller, specialist brands, with more emotional brand positioning.  

So overall, my view, as a lifelong student of marketing, is that the book gives us little practical guidance about how smaller brands might become big brands, and some of their recommendations seem risky and counterproductive. I can’t help thinking that if they had less disdain for marketers and had adopted a more collaborative approach, they could have made much more of their source material.