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Smallvs.LargeBrands:
HowtoBecomea
MarketLeader
Marketingrequirescreativity
andthoughtfulness,butitalso
requirescertainstandards.
Insystemizingthesestandards,
marketerscanachieve

greatercreativityandfurther
reach,whilecraftingmore
impactfulmarketing.
Youcan’tachievethis
systemizationwithout
understandingthe
sciencebehindmarketing.
Check out our blog post here.
We’llusedatatoexplainwhatit
takestogrowyourbrand.
Let’sbegin.
BRAND SIZE
Whatmakessmallbrandssmall,
andlargebrandslarge?
the size of a brand’s buyer market
CUSTOMER LOYALTY MARKET PENETRATION
Theanswerliesin:
the average purchase rate per cust...
“Largerbrandshaveslightlyhigher
customerloyaltyandmuchgreater
penetrationthandosmallerones.”
— Byron Sharp, How Brands Grow
Sosmallerbrandshavefar
fewerbuyerswhoareless
loyal,helpingexplaintheir
smallersize.
SMALL BRANDS LARGE BRANDS
LOYALTY slightly lower slightly higher
PENETRATION much lower much higher
The“DoubleJeopardy”Law
Thisphenomenonisknownas
the“doublejeopardy”law.
Let’sseewhatthedouble
jeopardylawlookslikein
action,usingthe2005UK
shampoomarket.
4%
8%
12%
16%
Brands
Head & Shoulders Pantene Herbal Essences L'Oreal Elvive Dove Sunsilk Vosene
Market share Annual marke...
Thegraphtellsustwomajorthings
1. Loyalty doesn’t vary dramatically between brands
But it is higher for those with greater ...
CUSTOMER LOYALTY
Let’stakeacloserlookat
customerloyalty.
Arecustomersmoreloyaltosome
brandsoverothers?
Yesandno.
Customersdoadoptacertain
levelofloyaltybehaviorinthat
theydon’tswitchbetweenall
brandsavailable.
Butsomedegreeofbrand
switchingwillalways
occuracrossallkindsof
marketcategories,
consumers,andbrands.
Analyticaltime
framematters
Consumer loyalty also
starts to look different when
assessed over a shorter
time frame versus ...
Marketerstendtofocuson
short-termengagement
metrics,ratherthanlonger-
termones.
Thishasimportantimplications
forcustomerloyalty.
CustomerLoyaltyOverTime
Weekly Analytics Yearly Analytics
#oftimespurchased
1
2
3
4
5
Tide All Gain Arm & Hammer #oftimesp...
Thegraphtellsustwomajorthings
1. A one-week time frame will show little customer disloyalty
Customers usually don’t have t...
“Sohowloyalacustomerappearsis
largelyananalyticalmisattribution,
unrelatedto‘true’loyalty.”
— Byron Sharp, How Brands Grow
THE WRAP-UP
Whathavewelearned?
1. Smaller brands have far fewer buyers who are less loyal
Brand growth lies in increasing market penet...
Whathavewelearned?
1. Smaller brands have far fewer buyers who are less loyal
Brand growth lies in increasing market penet...
Youcanreadthefullstoryonhowtogrow
yourbrandonthePercolateblog:
Small vs. Large Brands: How to Become
a Market Leader
Percolate is The System of Record for Marketing. 

Our technology helps the world's largest and fastest-growing
brands at ...
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Small vs. Large Brands: How to Become a Market Leader

This is the first in a five-part series meant to take an empirical approach to marketing. We challenged the most dominant marketing myths out there, using data to explain why they are wrong. In busting some of these myths, we hope to show you how you can grow your own brand.

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Small vs. Large Brands: How to Become a Market Leader

  1. 1. Smallvs.LargeBrands: HowtoBecomea MarketLeader
  2. 2. Marketingrequirescreativity andthoughtfulness,butitalso requirescertainstandards.
  3. 3. Insystemizingthesestandards, marketerscanachieve
 greatercreativityandfurther reach,whilecraftingmore impactfulmarketing.
  4. 4. Youcan’tachievethis systemizationwithout understandingthe sciencebehindmarketing. Check out our blog post here.
  5. 5. We’llusedatatoexplainwhatit takestogrowyourbrand.
  6. 6. Let’sbegin.
  7. 7. BRAND SIZE
  8. 8. Whatmakessmallbrandssmall, andlargebrandslarge?
  9. 9. the size of a brand’s buyer market CUSTOMER LOYALTY MARKET PENETRATION Theanswerliesin: the average purchase rate per customer
  10. 10. “Largerbrandshaveslightlyhigher customerloyaltyandmuchgreater penetrationthandosmallerones.” — Byron Sharp, How Brands Grow
  11. 11. Sosmallerbrandshavefar fewerbuyerswhoareless loyal,helpingexplaintheir smallersize.
  12. 12. SMALL BRANDS LARGE BRANDS LOYALTY slightly lower slightly higher PENETRATION much lower much higher The“DoubleJeopardy”Law
  13. 13. Thisphenomenonisknownas the“doublejeopardy”law.
  14. 14. Let’sseewhatthedouble jeopardylawlookslikein action,usingthe2005UK shampoomarket.
  15. 15. 4% 8% 12% 16% Brands Head & Shoulders Pantene Herbal Essences L'Oreal Elvive Dove Sunsilk Vosene Market share Annual market penetration Purchase frequency (average) TheImpactofthe“DoubleJeopardy”Law Shampoo Market, UK 2005 Source: TNS.
  16. 16. Thegraphtellsustwomajorthings 1. Loyalty doesn’t vary dramatically between brands But it is higher for those with greater market share. 2. Annual market penetration varies with market share Larger brands have far larger penetration than smaller ones.
  17. 17. CUSTOMER LOYALTY
  18. 18. Let’stakeacloserlookat customerloyalty.
  19. 19. Arecustomersmoreloyaltosome brandsoverothers?
  20. 20. Yesandno.
  21. 21. Customersdoadoptacertain levelofloyaltybehaviorinthat theydon’tswitchbetweenall brandsavailable.
  22. 22. Butsomedegreeofbrand switchingwillalways occuracrossallkindsof marketcategories, consumers,andbrands.
  23. 23. Analyticaltime framematters Consumer loyalty also starts to look different when assessed over a shorter time frame versus a longer- term one.
  24. 24. Marketerstendtofocuson short-termengagement metrics,ratherthanlonger- termones.
  25. 25. Thishasimportantimplications forcustomerloyalty.
  26. 26. CustomerLoyaltyOverTime Weekly Analytics Yearly Analytics #oftimespurchased 1 2 3 4 5 Tide All Gain Arm & Hammer #oftimespurchased 1 2 3 4 5 Tide All Gain Arm & Hammer
  27. 27. Thegraphtellsustwomajorthings 1. A one-week time frame will show little customer disloyalty Customers usually don’t have the time or need to buy multiple brands in just one week. 2. A year-long time frame will show far greater disloyalty. Customers have the time and need to buy a product multiple times, making it very likely they bought from a couple different brands.
  28. 28. “Sohowloyalacustomerappearsis largelyananalyticalmisattribution, unrelatedto‘true’loyalty.” — Byron Sharp, How Brands Grow
  29. 29. THE WRAP-UP
  30. 30. Whathavewelearned? 1. Smaller brands have far fewer buyers who are less loyal Brand growth lies in increasing market penetration, or buyer market
  31. 31. Whathavewelearned? 1. Smaller brands have far fewer buyers who are less loyal Brand growth lies in increasing market penetration, or buyer market 2. Customer loyalty is largely out of your control: it will always occur Most loyalty measures are skewed by the time frame, resulting in analytical misattributions
  32. 32. Youcanreadthefullstoryonhowtogrow yourbrandonthePercolateblog: Small vs. Large Brands: How to Become a Market Leader
  33. 33. Percolate is The System of Record for Marketing. 
 Our technology helps the world's largest and fastest-growing brands at every step of the marketing process. Want to learn more? Contact learn@percolate.com for more information or request a demo today at percolate.com/request-demo Kat Gebert Kat Gebert is on the Product Marketing team at Percolate.

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