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Why Mass Marketing Wins Over Targeted Efforts

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In the second of our five-part series debunking major marketing myths, we’ll take a closer look at other factors that need to be considered in growing a brand. Influenced by Byron Sharp’s work at the Ehrenberg-Bass Institute, we’ll explore brands’ customer bases and which—if any—buyers they should be targeting.

Veröffentlicht in: Marketing
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Why Mass Marketing Wins Over Targeted Efforts

  1. 1. WhyMassMarketingWins OverTargetedEfforts
  2. 2. Abrandismosteffectiveinits creativitywhenithasasystem.
  3. 3. Weexploredthescience thatpropelsthesystem tobesuccessful. Check out our blog post here.
  4. 4. Oneimportantpieceofthe puzzleisbrand’scustomer basesandwhich—ifany— buyerstheyshouldbetargeting.
  5. 5. Let’sbegin.
  6. 6. MARKETING TYPES
  7. 7. selling to all buyers TARGETED MARKETING MASS MARKETING Brandscanmarkettotheirconsumersintwomajorways selling to a distinctive segment of buyers
  8. 8. Butwhichofthetwoismosteffective?
  9. 9. Targetedmarketinghasbeen toutedasthesmart,modern waytomarket.
  10. 10. Thisisamarketingmyth.
  11. 11. “Massmarketingisactually moreeffective.” — Byron Sharp, How Brands Grow
  12. 12. Tobetterunderstandwhythis isthecase,let’stakealookata brand’scustomerbase.
  13. 13. CUSTOMER BASES
  14. 14. Consumerscanbesplitupintonon-buyersandlight, medium,andheavybuyers.
  15. 15. 9% 25% 22% 44% Non-buyers Light buyers Moderate buyers Heavy buyers BuyerGroups Sample of leading brand of tomato sauce in the US Source: How Brands Grow, Byron Sharp Don’t buy at all 44%
  16. 16. Whatdoesthischarttellus? Most buyers are light buyers. In many cases, almost 80% of a brand’s buyers can be light buyers.
  17. 17. Now,anexampleofthis inaction.
  18. 18. Let’slookatCoca-Cola’s customerbase.
  19. 19. Theiraveragebuyrateis12 Coca-Colasperyear,but mostpeoplebuyonlyone ortwoperyear.
  20. 20. Theydohavesomeheavy buyers,orpeoplebuying threeCoca-Colasaday (1,000peryear),butthere arefarfewerofthese.
  21. 21. BuyingFrequencies Source: TNS. % 0 6 12 18 24 30 36 42 48 54 60 Number of purchases in a year 0 1 2 3 . . . . . 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 % of UK cola buyers purchasing Coke x times, 2005
  22. 22. Thisgraphtellsustwothings. In the 2005 UK cola market… 1. Only a very small percentage of consumers were heavy buyers. They purchased a Coca-Cola 50 or more times a year. 2. The bulk of customers were non or light buyers. They got just a couple Coca-Colas a year.
  23. 23. “ThoughCoca-Cola’slightbuyersmay bepurchasingonlyoneortwodrinksa year,collectivelytheyaddup.” — Byron Sharp, How Brands Grow
  24. 24. “DUPLICATION OF PURCHASE”
  25. 25. We’venowestablishedthatall companiesshouldmassmarket tonon-andlightbuyers.
  26. 26. Nonetheless,brandsinsistthat theircustomerbasesdiffer fromthoseoftheircompetitors, whetherthat’sbygender,age, householdsize,orincome.
  27. 27. Docustomerbasesactuallylookdifferentacross competitors?
  28. 28. No.Buyerslookthesame acrosscompetitors.
  29. 29. “Thisisknownasthe‘duplication ofpurchase’law:brandsshare customersinlinewithbrandsize.” — Byron Sharp, How Brands Grow
  30. 30. Let’svisualizetheeffectofthe “duplicationofpurchase”law usingtheUKicecreammarket.
  31. 31. The“DuplicationofPurchase”Law Carte D’Or vs. Mars %ofbuyerswhoalsoboughtbrand 0 5 10 15 20 25 30 35 40 45 50 Walls Dessert Ben & Jerry's Haagen Dazs Nestle Walls Carte D'Or Mars Source: How Brands Grow, Byron Sharp
  32. 32. Thisgraphtellsustwothings. 1. Brands share a far greater average percentage of customers with Carte D’Or, the market leader, than with Mars, a smaller brand. This is in line with the market share, or overall size, of the two brands. 2. Competitors do not stray far from the average percent of buyers shared with the two brands. Brands sharing customers with Carte D’Or are sharing around 38%, while brands sharing customers with Mars are sharing around 7%.
  33. 33. THE WRAP-UP
  34. 34. Whathavewelearned? 1. Mass marketing is more effective than targeted marketing Light buyers heavily dominate brands’ consumer bases, so targeting them will provide the greatest penetration potential
  35. 35. Whathavewelearned? 1. Mass marketing is more effective than targeted marketing Light buyers heavily dominate brands’ consumer bases, so targeting them will provide the greatest penetration potential 2. Brands share customers in line with their brand size Brand growth lies in increasing market penetration
  36. 36. Youcanreadthefullstoryonhowto growyourbrandonthePercolateblog: Why Mass Marketing Wins Over Targeted Efforts
  37. 37. 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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