Conventional wisdom presents a very different view. Ever since the valid concept emerged that brands are positioned perceptually, marketers have taken it for granted that brand switching occurs because advertising has changed perceptions-or because of promotion or lack of product availability. They assume for advertising to succeed it can and must move consumers' perceptions closer to their ideal.
However, when consumer brand perceptions are tracked for an established brand, one finds they are rarely any different during or after a campaign that increased market share than they were before. Because the share went up, these tracking results are usually dismissed as meaning only that perceptual changes were too subtle to measure or that some critical attribute was missed. Had this research been taken at face value, marketers would now be looking at their brands very differently, and established brands would be managed more profitably.
Here we present a general theory of consumer purchase behavior that has important implications to the management of established brands.
The process theory of brand choice
1. The experience a consumer receives from using a brand solidifies her perceptions of it. These fixed perceptions can rarely be changed through advertising alone.
2. How a consumer perceives each of the different brands in a category determines which ones are used and which ones are not. The consumer may perceive different brands to be superior on different desirable attributes and this results in her switching around within a set of brands rather than using a single brand.
3. When a consumer uses a set of brands, the consumer's fluctuating wants and desires are what cause her to switch from one brand to another.
4. In many categories, brand use itself is what causes a consumer's desires to fluctuate. The consumer may temporarily satisfy certain desires by using one brand but deprive herself of other satisfactions she could have received from a competing brand.
5. As consumers' desires fluctuate relative to their fixed perceptions of brands, a consistent process of brand choice (brand switching) results over time.
6. Advertising and promotion intervene in the process of brand choice by temporarily changing the probability of a user purchasing the brand the next time the category is shopped.
A. Advertising intervenes by temporarily intensifying the consumer's desire for some benefit the brand is already perceived to provide.
B. Price promotion intervenes by temporarily changing the perception of price/value.
7. New brands, line extensions, product improvements, disequilibrium price changes and restages of existing brands change consumers' perceptions and permanently alter the process of brand choice (the probabilities of brands being selected) for some category users.
8. It is the fate of most brands that their own advertising will never improve users' perceptions, but instead that new competitors will diminish these perceptions over time.
Currently, an advertising strategy that has successfully positioned a new brand is then expected to improve that position over time. Since this is rarely possible, most advertising for established brands produces relatively low persuasion scores, and the advertising on behalf of one brand tends to be offset by its competitors'.
New brands quickly settle into a market share pecking order with the competition and rarely move up as advertising is asked to accomplish the irrelevant goal of improving perceptions. Not only do established brands rarely improve their market share-unless the product is reformulated-the average brand actually loses about a third of a share point each year to new entries.
Advertising for an established brand, particularly a well-differentiated one, will be much more effective if it exploits the brand's positioning. Specifically, advertising should exploit the important elements of positioning that differentiate the brand from competing brands in a set. For example, if consumers use a brand of toothpaste to prevent decay, and some of these consumers also use other brands for other reasons, advertising alone will not improve perceptions of the brand's decay-fighting ability, but it can and should make decay prevention more important.
The key to more effective advertising is to understand exactly what it is about your brand that is both differentiating and important to current users. Often the driving elements of a brand's positioning are not what marketers assume. However, there is a research technique that reveals what these elements are and if segments are using the brand for different reasons.
Next week: Six consumer segments and how to reach them.
Messrs. Stephan and Tannenholz are with Princeton Brand Econometrics.