See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/269553873

How brands grow: what marketers don't know -- Byron Sharp

Article  in  International Journal of Market Research · January 2011

DOI: 10.2501/IJMR-53-3-441-442

CITATIONS READS

0 1,945

1 author:

Wilson Alan
University of Strathclyde
71 PUBLICATIONS   2,552 CITATIONS   

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Advances in Corporate Branding View project

Consumer Attitudes to Service Innovations/Self-Service Technologies View project

All content following this page was uploaded by Wilson Alan on 07 July 2017.

The user has requested enhancement of the downloaded file.

How Brands Grow: What Marketers Don’t Know
Byron Sharp,
Oxford University Press, Australia; 2010
228 pages, Hardcover £22.50
ISBN 9780195573565

Written by Byron Sharp and his colleagues at the Ehrenberg-Bass Institute, University of South
Australia, this book builds upon previous seminal marketing science/ research work undertaken
by Andrew Ehrenberg and Gerald Goodhart. The book attempts to challenge the reader to
recognise the fundamental errors in contemporary marketing thought. It uses empirical data
collected over the years by the Ehrenberg-Bass Institute, from a wide cross–section of industries
and countries, to critique a number of brand growth assumptions and reveal predictable patterns
relating to how buyers buy and brands grow. As Sharp preaches in the preface: “This book is for
marketers who are willing to learn new things based on classical science and to shake off the
superstition (and unfounded speculation) that today passes for marketing theory”. Sharp is
nothing but confrontational, he doesn’t produce propositions or theories but instead sets out laws
that he attempts to support with empirical evidence.

His first law is the ‘Double jeopardy law’ which states that brands with smaller market shares,
not only have a smaller number of buyers, but these buyers also buy less often and are less brand
loyal than is the case for brands that have large market share. In other words, the level of a
brand’s loyalty is directly related to its market share – as market share goes up, loyalty goes up.
Therefore he purports brands should be focusing on customer acquisition rather than spending
time on retention activities aimed at defecting customers.

In addition to questioning retention initiatives, the book also challenges the well-rehearsed 80:20
rule by stating that the top 20% of a brand’s customer base typically only provides around 50%
of its sales revenues each year. As such, companies should place more emphasis on light
occasional brand buyers, rather than heavy buyers, if they are to sustain or grow market share, as
they this group makes up the majority of all purchases.

Sharp also questions the need for brands to be differentiated to appeal to a specific market
segment. He claims that brands within a product category sell to similar customer bases in terms
of their aggregated consumer behaviour profiles and therefore compete will all brands in the
category. In the co-authored chapter written by Sharp and Romaniuk, they emphasise this finding
suggests that rather than brands concentrating on developing a particular brand image, they
should focus instead on distinctive assets such as logos, colours and packaging that enable
potential buyers to notice recognise and recall the brand.

In addition to the chapters on enabling brand growth, there are also specific chapters on
advertising, price promotions and loyalty programmes. Some of the most interesting assertions
within these chapters relate to price promotions and loyalty programmes. In the chapter written
 by Dawes and Scriven on price promotions, there is the following statement: “what price
promotions do (for established brands) is to jolt the short-term buying propensities of mainly
infrequent buyers who take the opportunity to buy the brand cheaply and then resume their
normal purchase behaviour afterwards (p158)”. In other words price promotions give discounts
to people who would buy the brand anyway and if this is done too often it may ultimately lower
the buyer’s ‘reference price’ for the brand. Similar arguments are put forward for loyalty
programmes suggesting that such programmes produce limited loyalty effects and do practically
nothing to drive growth. In other words, loyalty schemes may be good at recruiting existing users
of a brand but are very poor at recruiting heavy users from other brands. All of these arguments
are supported by data and examples.

By the end of the book, Sharp sets out eleven different laws and observations/assertions relating
to marketing and brand growth. The over-riding message is about making brands easy to buy
through increasing brand salience and gaining further distribution and the book sets out seven
‘simple’ rules for achieving these. Although the rules may be described as ‘simple’, I can assure
you their implementation may be more challenging.

There is much in the book that stimulates the reader to question, discuss and seek further
clarification and I do wonder if the book tries to challenge too many marketing ‘ sacred cows’ at
once rather than developing the depth of argument in relation to a number of the key concepts. I
also feel that there is an inherent bias towards FMCG brands, even although there are examples
of banks and other services included. Brand salience and extended distribution may only be part
of the story for more complex products and services, although I am sure Professor Sharp would
disagree. Overall, it is a book worth buying as it makes the reader take stock and reassess current
marketing practices as well as the marketing research that is undertaken to support these
practices.

Professor Alan Wilson

University of Strathclyde Business School

View publication stats