How Brands Grow

12/6/2017

At this year’s Festival of Marketing we were lucky enough to be one of the first two hundred attendees to receive a signed copy of ‘How Brands Grow, what marketers don’t know’, written by Professor Byron Sharp, Director of the Ehrenberg-Bass Institute for Marketing Science, at the University of South Australia.

How Brands Grow, aims to get straight to the point about how marketing really works, so I was keen to give it a read. It’s been a while since I’ve read a marketing book, and following the event, I’ve finally got around to reading it.

Byron Sharp uses data and examples from real brands to show what is happening in practice. The book tackles loyalty, advertising and differentiation with a scientific discussion on how brands can really grow.

The first section of the book discusses the assumptions that can lead to a misunderstanding of our customers, using evidence to explain why customers are very similar across brands, and why large brands do so well. According to Sharp, the majority of a brand’s customers are people who buy infrequently and are “promiscuous” buyers, but they also contribute the most to a brand’s market share and potential growth. Sharp also provides evidence that shows despite positioning, customers are relatively similar, stating that “simply naming a segment does not mean it exists.”

Throughout the book Sharp disputes the way brands target brand loyalty, and why the most loyal customers are worth the least to the company. He uses Harley Davidson and Apple to illustrate this describing them as the “poster boys of emotion driven brand loyalty.” Sharp also discusses the importance of distinction over differentiation, using evidence that customers do not consider brands to be differentiated, regardless of the intent of their brand strategies. He argues that brand loyalty exists but that it is divided and strongly influenced by opportunity.

Finally, Sharp discusses advertising, price promotions, and distribution, and what they really achieve. This provides a basis for analysing the ways brands can grow, or not grow, through these tactics. He argues, price promotion primarily rewards current users, as opposed to bringing new users permanently into the brand. Sharp also claims loyalty programs fall into the same trap as price promotions, as primarily it’s the existing users that see the benefit of them and sign up, whilst target users are less likely to engage.

Overall, the book was easy to read with a good flow despite being very scientific and evidence based. The book is witty and well-argued throughout, and although I don’t agree with all the principles Sharp challenges, it is certainly thought provoking.

Author

Vicky Graty