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.

1. WhyMassMarketingWins
OverTargetedEfforts

2. Abrandismosteffectiveinits
creativitywhenithasasystem.

3. Weexploredthescience
thatpropelsthesystem
tobesuccessful.
Check out our blog post here.

4. Oneimportantpieceofthe
puzzleisbrand’scustomer
basesandwhich—ifany—
buyerstheyshouldbetargeting.

5. Let’sbegin.

6. MARKETING TYPES

7. selling to all buyers
TARGETED MARKETING MASS MARKETING
Brandscanmarkettotheirconsumersintwomajorways
selling to a distinctive segment of buyers

8. Butwhichofthetwoismosteffective?

9. Targetedmarketinghasbeen
toutedasthesmart,modern
waytomarket.

10. Thisisamarketingmyth.

11. “Massmarketingisactually
moreeffective.”
— Byron Sharp, How Brands Grow

12. Tobetterunderstandwhythis
isthecase,let’stakealookata
brand’scustomerbase.

13. CUSTOMER BASES

14. Consumerscanbesplitupintonon-buyersandlight,
medium,andheavybuyers.

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. Whatdoesthischarttellus?
Most buyers are light buyers.
In many cases, almost 80% of a brand’s buyers can be light buyers.

17. Now,anexampleofthis
inaction.

18. Let’slookatCoca-Cola’s
customerbase.

19. Theiraveragebuyrateis12
Coca-Colasperyear,but
mostpeoplebuyonlyone
ortwoperyear.

20. Theydohavesomeheavy
buyers,orpeoplebuying
threeCoca-Colasaday
(1,000peryear),butthere
arefarfewerofthese.

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. 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. “ThoughCoca-Cola’slightbuyersmay
bepurchasingonlyoneortwodrinksa
year,collectivelytheyaddup.”
— Byron Sharp, How Brands Grow

24. “DUPLICATION OF
PURCHASE”

25. We’venowestablishedthatall
companiesshouldmassmarket
tonon-andlightbuyers.

26. Nonetheless,brandsinsistthat
theircustomerbasesdiffer
fromthoseoftheircompetitors,
whetherthat’sbygender,age,
householdsize,orincome.

27. Docustomerbasesactuallylookdifferentacross
competitors?

28. No.Buyerslookthesame
acrosscompetitors.

29. “Thisisknownasthe‘duplication
ofpurchase’law:brandsshare
customersinlinewithbrandsize.”
— Byron Sharp, How Brands Grow

30. Let’svisualizetheeffectofthe
“duplicationofpurchase”law
usingtheUKicecreammarket.

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. 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. THE WRAP-UP

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. 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. Youcanreadthefullstoryonhowto
growyourbrandonthePercolateblog:
Why Mass Marketing Wins Over
Targeted Efforts

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.