3 main laws of brand growth in these uncertain times
Professor Magda Nenycz-Thiel from the world-famous Ehrenberg-Bass Institute for Marketing Science explains which 3 basic laws of brand growth marketers should keep in mind in today’s complex times. See in a short interview for the MARKETERIS.sk portal
Do you know that based on scientific knowledge and evidence from the field of marketing, the basic laws of brand growth have been defined? They were brought earlier by the marketing bestseller “How Brands Grow” by Byron Sharp with the apt subtitle: What marketers don’t know. And do you know which three of these laws marketers should pay key attention to in today’s uncertain times and why?
These questions will be answered by Magda Nenycz-Thiel , Industry Growth Professor Ehrenberg-Bass Institute for Marketing Science, which is directed by Byron Sharp . Magda knows what she is talking about – she is also the co-author of several chapters in the new edition of the book “How Brands Grow 2” .
M: Do the basic patterns of purchasing behavior apply even during turbulent periods?
MNT: Absolutely. All the basic models and laws still apply and therefore our marketing strategies must be based on them.
M: Based on the book “How Brands Grow 2” – what three fundamental laws of brand growth should marketers pay attention to in these uncertain and turbulent times? What is your recommendation?
MNT: First, it’s the Duplicate Purchase Act , which tells us who our brands are really competing with, which is competing brands in terms of market share. So you compete with all the brands in the category, knowing that more of your sales will come from the biggest brands and less from the smaller brands. At a time when we think everything is about price, and from this point of view we should be the cheapest, we have to realize that consumers shop at different price levels according to their own shopping hierarchy. We should also take into account that consumers have their portfolio of brands: if our brand is difficult for them to buy or recall, they will choose another brand. So don’t try to make it difficult for buyers to buy your brand, especially in these uncertain times. And don’t waste money on packaging changes, character changes… all these activities make it difficult for consumers to identify your brand.
MNT: What about the second law?
The second is the Law of Double Jeopardy , which shows us the importance of penetration for brand growth. This is very important for all companies raising prices. There is nothing wrong with raising prices. In fact, many organizations have not done this enough in recent years and have focused mainly on discounts. However, there is also a limit to how high the price can be set. Companies see this especially when they don’t track the price difference between their brand and private label chains, creating a barrier to price interchangeability. Sales are increasing, but only in euros. This happens at the expense of volume, and most importantly, the number of customers may also decrease. Therefore, it is important to be extremely cautious when raising prices, to know our distance from private brands and other competitors, and to strategically communicate price increases.
Read the full interview in Pravda.
