Reasons not to buy

Evaluation is over-rated. Brands largely compete in terms of mental and physical availability. See Sharp 2006, Corporate Member report 39. This isn’t to say that product features, and consumer evaluation, aren’t important – just that they operate within this ‘battle for attention’.

When a person goes to buy a brand, a huge part of the choice process, yet a part they hardly notice (they don’t even think of it as part of the choice decision), is the act of not considering most options. Evaluation occurs between a very limited number of brands, the ones that are noticed or recalled – which often can be a single brand.

So while positive features/perceptions do help a brand get chosen they do so after this massive culling of brands. Over time, however feature advantages can build salience, with time they assist in gaining mental and physical availability.

This means that product feature advantages, while important, are far less so than the business press makes out. This is especially true for established brands with significant market-based assets.

Another way of putting this, is that brands that are easier to buy for more people, get bought more. Which reminds me that reasons not to buy, can therefore be much more important (to sales) than reasons to buy. Generally marketers are quite sensitive to ‘reasons not to buy’, or at least to negative publicity. Yet it is not uncommon for marketers to spend much effort trying to communicate a “reason to buy” (”value proposition”, USP, differentiating factor etc) and yet be quite blasé about features that turn some consumers away.

For example, there are still many food products that contain Trans Fats when they don’t need to. In some countries they means they have to carry a small warning (like “contains hydrogenated fat”) – you’d think this would be enough to catch their markers attention and concern.

It’s very difficult to get consumers to notice your brand, when you succeed consumers reward you with a degree of loyalty (largely due to habit and inertia), but you can ruin this if they see a reason not to buy. Smart marketers should always be on the look out for such features. This is one of the reasons that differentiation needs to be approached with caution, being different while appealing to one group in the market can sometimes turn other consumers away.

Market-based Assets (early article)

Here is my 1995 article which introduced the term “Market-based Assets” which was picked up by Raj Srivastava in his excellent 1998 JM article “Market-Based Assets and Shareholder Value”:

Sharp, Byron (1995), “Brand Equity and Market-Based Assets of Professional Service Firms,” Journal of Professional Services Marketing, 13 (1), 3-13.My article is very hard to obtain now, I couldn’t find it on the web and even on my computer it was in an old file format. So before it is lost to the world I thought I should post it here. It might be of interest to some readers.

Do Loyalty Programs Increase Brand Loyalty ?

Back in 1997 Anne Sharp and I published the first empirical evaluation of a large scale loyalty program:

Sharp, Byron; Sharp, Anne (1997) “Loyalty Programs and their Impact on Repeat-purchase Loyalty Patterns”, International Journal of Research in Marketing, Vol 14, No. 5, p.473-486.

By using Dirichlet benchmarks we were able to assess the loyalty program’s affect on repeat-buying while avoiding the problem of self-selection (i.e. more loyal buyers of the brand are more likely to join the program). We documented weak effects.

Since this study we, and others have done more work. All using real world panel (i.e. individuals repeat buying) data. This evidence will be brought together in a forthcoming report, and possibly a chapter in my forthcoming book “How Brands Grow”.

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Engagement and time spent with the ad

Consumers are very good at screening out advertising, paying little or no active attention.

Much radio advertising is ‘wallpaper’ with little active attention paid to the advertising. We flick past much magazine, newspaper and web advertising. TV advertising also often just washes over us and there is active, physical avoidance too.

Now this isn’t to say that engagement is essential for advertising to affect consumers’ memory structures. It isn’t. But some active processing is helpful.

And this is where TV has a simple physical advantage, as do cinema ads, and some radio. Consumers simply spend more time with the ad. Consumers consumption of individual ads varies, situation to situation, mood to mood, etc. It can vary second by second. Out in the real world (away from forced exposure tests) longer ads work better largely because they have more chance of catching some attention, not the full 30 seconds but part of it.

Zapping (fast forwarding) sounds like a major threat to this effect, but it isn’t because the action of fast-forwarding requires consumers to pay more attention to the screen.

Another marketing implication is that viewers will seldom really watch the whole ad, in the sense of not paying attention to it all the way through. Remember this when designing and evaluating your new advertisement. Will it work if consumers only see a fraction of it ?

Do 9 out of 10 new product launches fail ?

You’ve heard this line ? Or maybe something more conservative, say 7 out of ten ?

It sounds awful, but gives solace to marketers who have an under-performing new brand. It’s used by consultants to stress the importance of marketing (and the advice or services they are selling).

But is this claim supported by empirical evidence – it seems not. More than half of real-world (i.e. not test) launches succeed. As Cooper in 1996 wrote“sources citing the failure rate at launch to be as high as 90% tend to be unsubstantiated and are likely wildly overstated”.

The full article can be downloaded from this journal, here is the abstract:

“Managers’ Knowledge of Marketing Principles: The Case of New Product Development”, Steven Cierpicki, Malcolm Wright, and Byron Sharp , Journal of Empirical Generalisations in Marketing Science, 2000, Vol. 5, p.771-790.

Abstract: Do marketing managers have well-established marketing principles to guide decision making? We addressed this question by examining 15 principles of new product development obtained from an expert panel of Australian senior marketing practitioners. Of these 15, three turned out to be tautologies, six had at least some empirical support, and six were partly or fully contradicted by empirical studies. In examining the literature for evidence, we were also able to identify five wellestablished ‘empirical generalisations’ about new product development. These results indicate that while principles of new product development do exist, there are fewer of them than we might have thought, and practitioners appear unable to distinguish between good and bad principles.