Distinctive Brand Assets Guide Growth

@InsightForumUS #MIFNY16 @richmondevents #MIForumUS
THE MARKET INSIGHT FORUM
It’s 2:00 AM …
Do you know what your
Distinctive Brand Assets Are?
Joe Amati, Associate Director, Insights and Planning, Kellogs Canada
joe.amati@kellogg.com
Shane Skillen, CEO, Hotspex
shane.skillen@hotspex.com / 416 450 7490

Why should you care about
Distinctive Brand Assets?

The little guys are starting to eat the big fish

Samsung massively outspends Apple on ads

But Apple Dominates Profits
92%!

How could this gorilla sell so much chocolate?

The Machines are Coming … to Insights

71% of you know
who that is
$20.00
4 hours

40 to 60%
of Existing Research
Jobs …

33
Focus on its target consumers
Get its best consumers to buy more
Drive loyalty
Conventional marketing wisdom
says that to grow a brand…

Counter to conventional marketing wisdom,
buying behaviour follows these five empirically
proven laws# Ehrenberg-Bass law
1
The law of double jeopardy:
Brands with low market-share have fewer and less loyal buyers
2
Buying patterns are predictable:
Many more category buyers purchase your brand 0-to-1 time than
5+
3
Heavy buyers account for approx ½ of sales:
Top 20% brand buyers represent just over half the brand volume
4
Buyer base churns year over year:
Many category buyers fluctuate in their brand buying year-over-
year.
5
Brand users are category users:
A brand’s customer base overlaps with the customer base of other
brands, in line with their market share.

Law of Double Jeopardy:
Brand size, penetration, and buy rate are
correlated
Cereal
Source = Nielsen HH panel data L52W PE 6-
2015
r= .99 r= .94
Share HH Pen
Frequen
cy
Brand 1 12.2% 47.0 3.4
Brand 2 5.2% 25.3 2.5
Brand 3 4.1% 20.6 2.6
Brand 4 2.0% 16.6 2.2
Brand 5 1.2% 10.5 1.9
Brand 6 0.9% 7.8 1.8
Brand 7 0.8% 8.7 1.7
Brand 8 0.8% 6.0 2.1
Brand 9 0.4% 6.0 1.5

Brand size, penetration, and buy rate are
correlated
Soup
Source = Nielsen HH panel data
r= .98
r= .99
Share HH Pen
Frequen
cy
Brand 1 19 57 3.4
Brand 2 16 38 3.0
Brand 3 10 26 2.4
Brand 4 2 14 1.8
Brand 5 0.4 2 1.4
Brand 6 0.2 2 1.7

To grow a brand, penetration is all that matters
50%
60%
70%
80%
90%
100%
110%
120%
130%
140%
150%
50% 60% 70% 80% 90% 100% 110% 120% 130% 140% 150%
Growth 14
Decline 22
Growth 22
Decline 0
Growth 0
Decline 52
Growth 18
Decline 8
Package
d Food

They follow a Negative Binomial Distribution
Cereal
2015
0
5
10
15
20
25
30
35
40
45
50
1 2 3 4 5 6+
Brand 1
Number of Trips
0
5
10
15
20
25
30
35
40
45
50
1 2 3 4 5 6+
Brand 2
Number of Trips
%HHlds
%HHlds

They follow a Negative Binomial Distribution
Packaged
Foods
73
19
6
2 1 1
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5+ Times

Buying patterns are predictable: Grow penetration with focus on light buyers
Cereal
Source = Source: AIMIA Loyalty Database
Sobeys QC + ATL L52W PE 6-2015
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
1 2 3 4 5 6 7 8 9 10 11 12+
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
1 2 3 4 5 6 7 8 9 10 11 12+
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
50.00%
1 2 3 4 5 6 7 8 9 10 11 12+
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
1 2 3 4 5 6 7 8 9 10 11 12+
Brand 1 Brand 2
Brand 3 Brand 4

The Pareto Principle does not apply:
Light buyers account for large sales
Packaged
Foods
0
10
20
30
40
50
60
70
80
90
100

Your buyer base churns year-over-year:
Relentless focus on recruitment is key to brand
growth
Cereal
2015
Brands
% Stay
Heavy
Brand 1 52
Brand 2 53
Brand 3 52
Brand 4 50
Brand 5 49
Brand 6 56
Brand 7 55
Brand 8 46

Brand users are simply category users who
sometimes buy your brand
Snack
Bars
Source = SOR, Nielsen HH panel data L52W PE 06-2015
0
5
10
15
20
25
30

45
SO WHAT?
The ONLY way to grow a brand is by growing
penetration with light/non users.

When brands grow, buying frequency changes
like this
Source = SOR, Nielsen HH panel data
Packaged
Foods
Zero Once Twice 3+ Times
Brand Market
Share
2006 = 2.9%
2010 = 3.9%
2006 2010

To grow your brand focus do not target heavy
users…focus on light/non-users

People don’t care about our brands the way we do

49
“Consumers simply don’t perceive
brands within a category as being
particularly different”
- Byron Sharp, How Brands Grow

Growing a brand comes down to one thing:
AVAILABILITY
Be easily thought of
Be Easy to Buy
Mental Availability Physical Availability

Maximizing AVAILABILITY requires Distinctive
Assets
Reach is king
Drive penetration
Target a wide audience consistently
Be Easy to buy
=
Physical
Availability
Get noticed
=
Mental Availability
Distinctive Assets
“Nudge” Consumers

Apple Dominates Profits
92%!

MENTAL AVAILABILITY

This is why the Dairy Milk ad works

HOW BRANDS GROW REFERENCE
GUIDE
Be Distinctive

Packaging
Advertising
Claims
Retail
Everywhere

This isn’t just
any orange.
Whose is it?
Nearly 70% of
consumers got
that right.*

How about
this orange?
Nearly 80% of
consumers got
that wrong.*
!

The distinctive assets
your brand owns:
1. Improve brand linkage in advertising
2. Improve findability online/shelf/store
3. Make the brand more familiar and ea
to buy

Distinctive Brand
Assets need to be:
1. Owned
2. On-Brand

Q: What brand does this belong
to?

Is this asset
OWNED?
OWNEDNOT OWNED

How ON-BRAND are my assets?

ON BRAND
NOT ON BRAND

Unrealized Dream
Activate
Distinctive
Brand Asset
Maximize
Lost Cause
Remove or Change
Empty Promise
Evolve
NOT OWNED OWNED
NOT ON
BRAND
ON
BRAN
D

Ownable
Implicitly
pleasurable
Brand growing

Bring non-visual DBA to life in video

Campaign successful in challenging media
environment
Ad recognition
Branding
Key
messaging

Packaging architecture as a DBA

Harmonized packaging improves emotional bond
Core Attributes Non Core Attributes
Down-to-earth (69%)
+6
Calm (22%)
+5
+ sig. > Current design
- sig. < Current design
Reasonable (32%)
+7
Honest (37%)
+7
Mature (27%) +6
Careful (14%)
+6
Good (38%)
+6
A leader (21%) +5
Determined (25%)
+5
Polite (20%)
+5
Youthful (28%) -
7
Cute (18%) -
11

Evolving use of DBA

Evolving use of DBA
Gives a good impression of Kellogg’s
Fits my image of Kellogg’s
Will make for a happy breakfast
Is an attractive package
Gives a sense of optimism
Is light-hearted
Has a fun look and feel
Is my most preferred package

THE MARKET INSIGHT FORUM
Thank you
Joe Amati, Associate Director, Insights and Planning, Kellogs Canada
joe.amati@kellogg.com
Shane Skillen, CEO, Hotspex
shane.skillen@hotspex.com / 416 450 7490

Distinctive Brand Assets Guide Growth

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