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‘Buying a brand for the first time doesn’t require a huge adjustment, just a bit of mental availability’

A new brand needs to build “essential memories” that aren’t about brand superiority or differentiation, but simply about what it is (e.g., a soft drink) and what it looks like (so it can be found). Therefore, it is important to define the category you are in and that you are a plausible option within it. “People aren’t looking for the difference, they want to understand the brand and whether it’s worth looking into long-term memory.”

1. Start with the point of parity instead of the point of difference

This reminds me of the distinction between point of parity and point of difference. Back when I was teaching with Kevin Keller, we were deeply concerned with the need for new brands to first demonstrate that they are a legitimate player in the category before consumers are open to hearing about any differences. The impetus was the internet bubble Superbowl promotion of new brands, but it also applies when your brand is over a century old but relatively unknown to an audience. This year I was asked to entertain European business journalists who were brought to campus to learn more about the Tuck School of Business and spread the message across Europe. I was appalled by our pamphlet that focused on how we were better than Harvard Business School. I turned that around and first suggested all the ways in which we were similar to HBS. Once the journalists were convinced that Tuck was worth understanding, we were able to talk about how we are different and better than HBS.

2. Change your message over time instead of keeping it in the same place

Once you’ve established at least one Category Entry Point (CEP) with your brand (e.g., a great afternoon pickup), you’ll want to increase that number to grow your brand (e.g., great to wake up to in the morning). Therefore, your message, and with it the “positioning” attribute, should change over time. This reflects what we found for vehicles in terms of messaging consistency versus changes, despite measuring the changing market willingness to pay for attributes rather than entry points into categories (e.g. cost of ownership, performance, comfort, Safety). According to our research, younger brands should stick with the message, but older brands should vary it over time. Hence:

“If your advertising works as campaigns change, so should what the brand is known for.”

3. Continue advertising to build distinctive assets that are widely available

The fact that younger brands stay with the message longer can partly be explained by the need to build their distinctive values. To make it usable, your unique selling proposition needs to be consistent, reach all category buyers (fame) and create a prominent connection to your brand (uniqueness). For this purpose, you must continue advertising, so start as you want to continue.

HGB recommends starting in 2 stages:

Stage 1: Get enough initial sales to ensure distribution. Minimize Frequency to Keep Money for Phase 2: Be on the air continuously to attract light and mid-range buyers

Targeting heavy users is not necessary, as they are more likely to buy the new brand anyway and are therefore overrepresented in your initial customer base. However, they are rare and will easily add your new brand to their repertoire without much loyalty. So you need to reach light buyers by continuing to advertise after the introductory period. Examples given include the Apple Ipod, which increased advertising each quarter, and Tiktok, which advertised aggressively on TV.

4. Don’t rely on word of mouth

While WOM is considered very valuable by buyers, it is often not much for marketers as they cannot control it. It is the WOM giver who decides based on the personal relationship with the recipient. The trigger is either the recipient specifically asking about the category or the brand having a story worth reporting, regardless of whether the recipient is in the market. So, positive WOM reaches the fewest consumers with the least prior propensity to buy the brand, even though it most likely has an incremental impact! Factoring in this prior propensity to buy when modeling the impact of WOM, its ROI can be lower than that of advertising, as demonstrated for new-season TV programming. Cem Bahadir and I find the same thing in our longitudinal study of the impact of marketing (price and advertising) versus word of mouth in several Asian markets. WOM received is more important for (highly engaged) female consumers than for male consumers. However, marketing mix has a greater impact on WOM transmission than received WOM across countries, and particularly for growing brands and for male consumers who are typically less involved in the personal care category studied.

If the WOM is negative, the effect is reversed (East and Romaniuk 2021). Negative WOM has a large impact on those with high prior propensity to buy the brand, but is most likely to reach consumers with medium propensity. In addition, negative WOM is mostly given by previous users, but also by consumers who have never used your product! This is an important limitation when, for example, the Net Promoter Score is only calculated for current users instead of surveying all category buyers. Likewise, Prof. Bahadir and I find that a negative WOM does not materially harm the emerging market brands studied over time (as shown in the image above). Instead, positive WOM is useful as a brand reminder for both givers and receivers. In total,

“Both positive and negative WOM can have a big impact, but both tend not to reach the right people for it.”

5. Focus on trials instead of loyalty

New brands have lower loyalty than existing brands, but HBG believes that support for launch (purchase of intellectual and physical availability, price discounts, etc.) is disappearing too quickly.

Many companies believe that brand growth comes from reducing churn and thereby increasing loyalty. While this may be the case, HBG believes the potential is limited as the reasons for churn are mostly NOT under the company’s control. The cited study shows that 60% had nothing to do with brands, 40% received a cheaper competitor’s offer and only 4% noticed a service issue. Additionally, your churned customers will still have better memories of you than the never-customers and may come back to you in the future. So don’t worry about churn (unless it’s related to a major change or product reformulation) – instead, try to maintain the natural level of loyalty.

“Loyalty will come naturally from effective marketing that increases customer base and penetration.”

After reviewing evidence of dual jeopardy in emerging, business-to-business and luxury markets, HBG concludes that tactics may change, but the fundamental need to build mental and physical availability does not.

Contribution to Branding Strategy Insider By: Dr. Koen Pauwels Author of:

The Blake Project Can Help: The Brand Positioning Workshop

Branding Strategy Insider is a service of The Blake Project: A strategic branding consultancy specializing in brand research, brand strategy, brand growth and brand building

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