By Dave Krysiek, President, Brandware Research
Here’s a distressing thought: New research might suggest that everything you ever learned about brand marketing was wrong.
Okay, saying everything you learned is invalid might be an exaggeration, but there are several recent studies coming to light that suggest the old brand identity model popularized by David Aaker several years ago just doesn’t work in most product categories. Yes, you read that right – new findings suggest that most of the advice first popularized in Aaker’s blockbuster book, Building Strong Brands, is fundamentally useless to marketing managers. Moreover, these same findings suggest that the wisdom of “The Aaker Model” didn’t simply fade with the rise of digital marketing, but that the model always failed to describe the way shoppers process information and select products or services.
Wow, talk about a generation of marketers getting the rug pulled out from under them!
The Aaker Model
Before we get into why the Aaker model is being challenged, let’s reexamine some of the brand marketing doctrines proposed by Aaker and his contemporaries. These well-meaning professionals declared that solid brand management starts with building a longstanding brand identity – a unique set of functional, emotional, and user associations that signify what the brand stands for and offers to buyers. And they argued that brand identity was instrumental in differentiating and making a brand attractive to a unique set of target customers.
Sounds entirely reasonable so far, right? And if you own an advertising agency, what could be better than to earn a pile of money by creating and promoting a “differentiated and powerful brand identity” that is expressly designed to bring notoriety and sales revenue to your client? The client is happy and the agency is happy – everybody wins!
Except that they don’t.
Unfortunately, there are several faulty assumptions implicit in The Aaker Model, and therein lies its weakness. The first of these assumptions is that most consumers buy using the classic “learn, feel, do” behavioral model. That is, they mentally seek out and process information which brands in a category are best for them, build affinity with particular brands using this new-found knowledge, and then purchase the brand that best fits their needs. The second assumption of the model is that customers seek an ongoing “relationship” with brands – that customers want to be emotionally connected to the brands they buy. And the final assumption is that brands with strong identities ultimately succeed by building loyalty among targeted customers, whose bond with the brand keeps them coming back for more.
Recent Brand Findings
Although the common-sense assumptions that underlie The Aaker Model might initially ring true, peer-reviewed empirical findings from researchers like Andrew Ehrenberg, Gerald Goodhardt, Chris Chatfield, Byron Sharp, and Jenni Romaniuk, largely refute them.
In essence, the newer findings indicate that, in most categories, customers buy out of habit and engage in minimal mental processing when deciding which brands to buy: that is, they follow a “do, learn, feel” behavior that is quite the opposite from what Aaker and his contemporaries have suggested. The newer findings also show that a brand’s market share is most often driven by market penetration rates, not strong customer loyalty (i.e., attracting more customers is generally more effective than convincing current customers to purchase more often). Finally, the newer findings demonstrate that customers in most categories typically engage in choice-seeking behavior, rendering ineffective the targeting of particular market segments for many products and services.
These newer findings have profound implications for managers who are tasked with growing sales and revenue. For example, the findings strongly suggest that narrow brand positions are frequently too limiting and that the key to successful growth isn’t building customer loyalty, but capturing a greater number of light or occasional category buyers. And that implies the need to develop a more varied product line that is communicated to a broader target audience. It also suggests the necessity of making a brand available across a greater number of physical and online buying locations and making it more recognizable across a variety of category buying situations.
Implications for Research and Measurement
As one can imagine, the empirical findings mentioned above also affect the way in which many brands should be evaluated. In fact, in many product and service categories, these findings make obsolete the traditional “awareness and association” research regimen which, until recently, was considered the gold standard of brand measurement.
The specific measurement implications of these findings are too numerous to review here, so we summarized just five of them below:
- Don’t rely on data analytics alone. If the goal is to capture a greater number of customers who haven’t previously purchased a brand, then it’s fallacious reasoning to believe that simply modeling how the brand’s past customers were generated unlocks the secret to captured new customers. After all, if non-customers behaved similarly to customers, they’d already be buying the brand. Sorry, folks, but it’s far more effective to use traditional research to learn why non-customers haven’t purchased a brand, and then adjust marketing tactics accordingly.
- Initially research category buying behavior – not brand-specific behavior. Measures relating to the level of mental processing during the buying process, brand penetrations, purchase frequencies, and cross-purchasing behavior are especially illuminating. It’s shocking, but many marketing managers constantly track brand awareness, rarely giving a thought to systematically understanding how, when, why, with whom, how often, where, and under what situations and occasions category users buy.
- Identify and measure the pervasiveness of various category buying cues. This is a complicated task that typically involves a disciplined qualitative and quantitative research sequence, but these buying cues represent the “open windows” through which a brand can grow by capturing new customers. Managers need to understand which cues offer the most potential as well as the mind share captured by their brand for each one.
- Measure brand visibility. If the goal is to capture as many new buyers as possible, then marketing managers need to understand how many category buyers recognize their brand’s name, logo, colors, trade dress, package design, communications style, etc. Even brands with strong name recognition must be complemented with heavy-duty visibility and distinctiveness at the point of sale to grow revenue. Don’t believe us? Try finding your favorite item in a store after an ill-advised packaging refresh.
- Mind the overlaps. Most marketers already collect category data that pertains to past purchase behavior and buying information sources. They briefly look at the data and gravitate toward the most popular responses. However, the new empirical findings suggest that the real power of this information is derived from examining the overlap patterns between brands, purchase locations, or information sources. These analyses can reveal promising brand extension scenarios, the best distribution opportunities, and the most impactful media channels and properties.
There’s so much more to report on this important topic, but we’ll save that for another day. Meanwhile, if you’d like to learn more about why The Aaker Model is falling out of favor and what’s replacing it in the brand measurement world, please contact Brandware here.
When a ballroom filled with car dealers and automotive industry types erupts in applause to the question: “Who in this room thinks it’s a great year to be in the auto industry,” you know that despite all the talk of Washington dysfunction and consumers’ lack of confidence, optimism is back. It’s still cautious in many quarters, as Automotive News reporter Mark Rechtin pointed out in his coverage of yesterday’s 2013 JD Power Western Automotive Conference, held in conjunction with the Los Angeles Auto Show.
Many of our clients, from Porsche Cars North America to The Tire Rack, are in the automotive industry, so we attend numerous conferences and events each year to gauge trends and learn what the people whose daily business it is to design, manufacture, market, sell and service cars and trucks are thinking. For me, the various panels and presentations during this annual gathering offered up three key themes that aren’t just unique to the auto industry. They are valuable considerations for any marketer whose job it is to influence consumer shopping behavior. Here’s what I heard:
1. Mobile Optimization Matters More than Ever
Online shopping is moving to the dealership, just as it has and is in every other category of retail. According to JD Power’s 2013 Sales Satisfaction Study, 32% of shoppers researched dealers digitally first. Among tablet and smartphone users, 23% of users are looking for dealership information. When you add that 75% of auto retail customers are looking at 3rd party ratings and reviews, and over 50% are not committed to any brand at the start of the online shopping process, it’s clear that retailers whose websites are information rich, who post and promote positive reviews and whose content is fully optimized for mobile have a clear edge.
2. Multi-Cultural Marketing isn’t a Trend, It’s Everyday Business
Los Angeles is an epicenter of multiculturalism, and the rest of the country is catching up fast. Yet, as Toyota’s Bill Fay pointed out, multi-cultural doesn’t mean a monolithic approach to marketing. Every segment from Hispanic to Asian consumers has multiple segments within it, so national brands should take advantage of local retailers for the right intelligence on what works within specific communities. A panel of multi-cultural marketers, moderated by Univision Communications VP Paul Sellers, reinforced the importance of integrating multi-cultural messages as part of every campaign. One thing every panelist agreed on is the importance of social and digital channels for reaching these audiences. Whatever their native language, consumers are already comfortable using these “borderless” channels to communicate and data shows they over-index when it comes to mobile usage. One very bright spot: millennials bring a “built-in” multi-cultural mindset and embrace diversity marketing.
3. Traditional Sales Approaches Don’t Work with Millenial Shoppers
Veteran wheels and wings CNBC reporter Phil LeBeau moderated a panel of automaker and auto dealer leaders and one thing is clear – figuring out how Gen Y buyers prefer to do business preoccupies a lot of very smart folks. As well it should: by the end of this year, Gen Y will account for 23% of all U.S. new car sales. From ditching the watch (apparently a key giveaway that you’re not on a Gen Y wavelength) to offering up product information on a tablet versus talk, adapting selling techniques to millennial preferences is critical at retail. Auto marketers and dealers agree that millennial shoppers arrive at the store fully armed with info and with a clear idea of what they want (thanks to all that advance online research). They don’t want to be sold again – they want to complete the transaction, so make it fast, simple and painless.