Half of your marketing budget is wasted. Now you can know which half.

Our guest author explores how evidence-based marketing principles can pinpoint which half of your budget is wasted.

Marketing has mostly been a case of trial and error, gut feeling, organisational capability building, years of experience, launching many products, and filming advertisements. We have been learning, teaching, and applying marketing principles without much evidence.

If you haven’t heard about evidence-based marketing, then you are late. If you don’t understand evidence-based marketing principles, then you would be wasting a lot of time on things that are not important.

Based at the University of South Australia, the Ehrenberg-Bass Institute is the world’s largest centre for research into marketing. They are an independent, non-profit research institute. They have a team of 60+ marketing scientists who are advancing marketing knowledge, busting pseudo-science and marketing myths, and teaching how marketing really works.

Busting myths and revealing marketing facts: How not to blow your brand?

Marketer’s view: Marketing objective: In order to grow MS, identify a segment which is unique and offer the differentiated proposition by reaching them smartly in a cost-effective way.

Evidence-based data suggest that it has many errors.

1. Unique segment

Consumer segments in competing categories are homogeneous and not heterogeneous. In a nutshell, your brand consumers who buy your brand once, twice, or many times also buy your large and small competitors in the ratio of their market share (Duplication of Purchase Law).

Marketer’s view: It was always thought that brand buyers would be mostly heavy buyers. How many heavy buyers - 80% or 60% or 50%? The data says most brands have only 20-25% heavy buyers contributing to 50-60% of sales, with the rest being occasional buyers. The Negative Binomial Distribution describes the purchase frequency of the brand, and it is a long-tail distribution of buying rates. Most buyers of a brand are light buyers, with buying only once in the time period being the most common purchase rate.

What about the money that has been spent on creating consumer personas like Passionate, Harmonious, or Purposeful? Unfortunately, that money has also been wasted.

Tip: Stop looking for elusive consumer segments and hope that they will help grow the brand. Find light category buyers and make your brand easy to mind and easy to find.

Next time someone asks you, "Who is your TG?" The answer is: All category buyers.

2. Differentiated proposition

If there is no differentiated proposition, there is no reason to buy.

Marketer’s view: The brand manager needs to defy the norms and come up with something that is unique and different about the brand. Then talk about that proposition; people will notice it and choose the product over others. The human brain is designed to notice something new/novel to satisfy our ancestral fight/flight syndrome.

Evidence-based marketing suggests that consumers in competing categories don't view brands as unique and are unable to articulate the USP of the brand. When probed, they mostly talk about basic category offerings—for toothpaste: cleans my mouth, feels fresh, protects from germs. (Did consumers miss those RTB or the toothless granny?) Most competing brands also have similar satisfaction scores. Differentiation exists only in the minds of brand custodians.

Then how do people decide which brand to buy if not a differentiated value proposition that has been advertised aggressively? First of all, most ads are a disturbance to consumers who are cognitive misers and don’t care much about the brand. Data suggests approximately 90-95% of consumers are not in the market when they consume any brand content; memory will decay after a day or a few days.

This is the hard-core reality of marketing; marketers are in the business of creating memories. Later, when consumers go to market to buy the category/brand, they notice and remember the pack, colour, shape, characters, and maybe some stills from the latest ad, which they have not paid much attention to while it was being aired/seen. Consumers notice and then remember distinctive assets, which give them comfort and confidence to pick the brand.

Tip: Focus on the distinctiveness of the brand. Build fame and uniqueness of these assets.

Marketer’s view: But wait, a lot of research has been done on what sentiments the brand evokes and what people remember about the brand. Is all that a waste? Unfortunately, yes.

Jenni Romainuk, research professor of marketing and international associate director, Ehrenberg-Bass Institute, says, “When a consumer moves from normal mode to category buyer mode, they take help of the biggest search engine between our ears—our mind. They take help of category entry points: when/why/with whom/with what/where, etc.”

Category entry points (CEPs) are the cues that category buyers use to access their memories when faced with a buying situation. These can include any internal cues (e.g., motives, emotions) and external cues (e.g., location, time of day) that affect any buying situation. While each category buyer and each buying situation is unique, there are common recurring themes we call CEPs.

CEPs influence which brands are initially mentally available in decision-maker memory and form the list of initial ‘go-to’ options. Understanding CEPs helps build useful associations between the brand and the category’s core buying situations. Therefore, when a buyer enters the category, the brand has a greater chance of being mentally available, which is the first step towards being bought.

Think Maggi & CEPs—quickly cook for a guest, don’t have time for dinner, hunger pangs & evening snack, can consume while “waiting/travelling” at “bus-stop/in-flight.” Now pause for a moment and think: When a consumer is thinking, what gets evoked first—the brand or the category entry points? But all the money has been spent on understanding what people say or think about the brand, when unfortunately, the mind doesn’t work like that.

Evidence-based marketing suggests that there is an urgent need to shift perspective from STP to market-based asset theory. From growth by loyalty to penetration, differentiation to distinctive assets & category entry points, positioning to mental availability, persuasion to building and refreshing memory structures.

(Our guest author is Binit Kumar, Category Head of Oral Care at Dabur.)