What's in a Name?

Advertising and the Concept of Brands

David M Jones, Jan S. Slater

• Publisher: Routledge
• Year: 2014
• ISBN:
  9781317452140
• Edition: 1
• Topic: Business
• Subtopic: Business generale
• Index: Business

This is a completely rewritten and updated version of one of the true classic books in the field of marketing and advertising. What's in a Name? Advertising and the Concept of Brands analyzes brands from the point of view of modern marketing theory. It deals in detail with the role of advertising in creating, building, and maintaining strong brands - the lifeblood of any long-term marketing campaign. The work is empirically based and is supported by the best research from both the professional and academic fields. The authors describe the birth and maturity of brands and dissect the patterns of consumer purchasing of repeat-purchase goods. In addition to all new research findings and examples, this new edition of What's in a Name? includes first time coverage of the short-term, medium-term, and long-term effects of advertising on sales of brands. The book concludes with new recommendations on how to develop and disseminate better advertising.

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Introduction

We are addressing this book to people who want to learn something about brands in the real world. Such people may already be in the marketing and advertising business as entrepreneurs, as brand managers in manufacturing companies, as executives in advertising agencies; or they may be planning to build careers in such organizations. The book should also be of value in universities, and we have every intention of using it to teach our own students. Academic readers are warned, however, that the book severely and directly disputes the validity of certain widely held notions, such as that competitive brands in a market are functionally indistinguishable from one another; that the decline phase of the so-called brand life cycle is inevitable and irreversible; and that advertising is in general a powerful persuasive force in overcoming resistant attitudes. The extent of this book’s use in academe will depend on how much professors wish to protect their students from the dangerous heresies propagated here.

This book is devoted to the marketing and especially the advertising of what are referred to most commonly as repeat-purchase packaged goods (or sometimes as fast-moving consumer goods, FMCG for short). This is rather a large field; its more important categories are packaged, canned, and frozen foods; proprietary drugs; tobacco products; toiletries and cosmetics; wine, beer, and liquor; soaps and cleaners; gum and candy; and soft drinks.¹ This mixed collection of categories has considerable homogeneity from a marketing standpoint. They all have six common general characteristics, and in most of these they differ at least in degree from other categories of products and services (such as automotive, travel, retail, direct response, financial, and entertainment). Each of these characteristics will now be briefly described as a logical starting point for the argument of this book, although the reader will find them discussed more fully in the main body of the text.

1. Women are the most important category of buyers

Repeat-purchase packaged goods are sold predominantly in supermarkets. In about 70 percent of cases, the buyers are women, although such goods are of course used by all members of the family in addition to the homemaker. Despite recent changes in the individual roles of women and men (which may cause the 70 percent estimate to fall), many manufacturers of packaged goods continue to refer to their target consumer as “she,” and this useful convention will occasionally be followed in this book. The only other advertising category in which a female target group is comparably important is the retail one.

2. Buyers buy repeatedly and have a repertoire of brands

Brands are bought not once but repeatedly, in many cases in predictably regular patterns; hence the truth of the saying that when we build brands we are making customers and not just sales. In marketing jargon, we are building a long-term franchise.

In virtually every category examined empirically, it has been found that at least 80 percent of buyers normally buy (with varying degrees of irregularity) more than one brand. This introduces the extremely important concept of the repertoire of brands, the collection the homemaker buys in varying proportions, often (again) in predictably regular patterns.

The uniformity of such patterns will be a surprise to some readers, but they will find it plentifully illustrated by the factual data in chapter 5. This element of constancy—or the inertia of habit—in most markets for repeat-purchase goods partly explains the manifest difficulty of breaking into such markets with new brands.

It also suggests the large role for advertising aimed at reinforcement and protection for the majority of established brands. Indeed, much advertising is addressed to existing regular and irregular users of such brands. We advertise to these people in order to hold as well as to increase our market share. We talk to them with the intention of reinforcing their loyalty to our brand, to compliment them on their wisdom in using it so that they will remain friendly with us, and to encourage them to use it more than before. If we look upon advertising in this way, our approach becomes different from what conventional wisdom suggests, which is that advertising is a means of converting people, persuading them to switch from brand A to brand B. There is much evidence that brand advertising as it is practiced in the real world is substantially based on continuity and not conversion. This is quite a different way of looking at the subject. Here the phrase “looking at the subject” should be emphasized. We are talking about a fresh standpoint, a mental sidestep. In a very apposite phrase originally used in a different context, this way of looking at the subject is “an apparatus of the mind, a technique of thinking.”² Because of the large role of habit in the purchase decision, such decision making is often described as “low involvement.”

These factors of repetition and multibrand purchasing are of generally greater importance with packaged goods than in most other categories because of characteristics endemic to such markets, notably the high rate of product use.

The importance of repeat buying means that in advertising repeat-purchase packaged goods, it is not only ethical but also good business to be truthful, because if the advertising overpromises, the customer will punish the manufacturer by not buying the brand again. It is surprising that this argument appears so infrequently in debates about truth in advertising.

3. Competitive brands differ from one another in functional terms

Many readers of this book will be stopped by this statement. It may very well disturb a deep-seated and rather remarkable belief held by numerous people, especially individuals without first-hand experience of brand marketing, that competitive brands in any market are indistinguishable from one another in functional terms. The widespread prevalence of this belief has caused products in such markets to be referred to as “parity products” or “homogeneous package goods,”³ and product improvements in them to be described as “cosmetic changes,”⁴ or “induced product differentiation” created by advertising.⁵ Since this issue is important to the development of the argument in this book, it is necessary to take the time to discuss it and present some additional views before continuing with the mainstream discussion.

One point should be made first. Most consumer goods markets are oligopolies dominated by a small number of large competitive manufacturers. (This type of market organization will be discussed in chapter 2.) It is substantially true that the nature of oligopolistic competition and the relative ease with which functional improvements can be copied are forces that cause functional innovations in new and restaged brands to be widely and sometimes rapidly diffused through markets. It is both wrong and dangerous, however, to infer from the force and characteristics of oligopolistic competition that all brands are (or become) functionally interchangeable. It is wrong because it flies in the face of the facts, some of which will shortly be presented, and dangerous because such a line of thinking can persuade marketers to introduce new brands that offer a mere functional parity with their competitors, with a subsequent rate of failure that is in most cases only too easily and dishearteningly predictable. Success almost always requires differentiation.

The writings of researchers, advertisers, and workers in advertising agencies—people who have a day-to-day operational knowledge of brands—make it quite clear that competing brands in any market tend to be functionally different from one another. Their evidence of differences between brands in functional terms comes mainly from blind product tests, in which the names of the brands being compared are not disclosed, in order to focus exclusive attention on their functional properties. Although such tests suffer from a number of practical imperfections, we have never come across a single manufacturer of packaged goods who does not employ them on a regular basis for evaluating consumer responses to the functional delivery of his own and his competitors’ brands.⁶

Although product tests normally provide fairly clear-cut results, it is not always wise to interpret them in an equally clear-cut way. Brands with a “minority appeal” should not always be rejected by manufacturers, since these are often able to attract small groups of users interested in specific attributes, on which such brands might score well. In fact, in most markets, there is a “tail” of profitable brands with individual market shares of less than 5 percent, all of which sell steadily to relatively small numbers of consumers.

Now, what do knowledgeable practitioners have to say about functional product differences? Here are the views of five of them.

James O. Peckham, a researcher with forty years of experience with the A.C. Nielsen Company, wrote

Based on a composite trend of eighteen new and/or improved brands marketed nationally prior to the start of our study, we see that consumer purchases of these new brands are up 51 percent in the two-year period. If we examine the individual brands making up this fine sales trend, we find that they all had a “consumer plus” readily demonstrable to the consumer.

Again:

The board chairman of one of the leading manufacturers of a household product recently stated in a speech before the National Industrial Conference Board that the company’s top brand had had fifty-five product improvements in the twenty-nine years of its existence.

Again:

On a blind product test of your new brand versus leading brands already on the market, you should not ordinarily consider trying to build a consumer franchise unless you have a 60–40 preference—and 65–35 would be preferable.⁷

J. Hugh Davidson, a senior executive in a major international marketing company, published an empirical examination of successful and unsuccessful new products, with the conclusions that

Fully 74% of the successes I studied offered the consumer better performance at the same or higher price. … My study revealed a close correlation between a brand’s success and its distinctiveness.⁸

David Ogilvy, one of the most distinguished practitioners in the advertising agency field, referred to statements by the former chairman of Procter & Gamble:

Says [Ed] Harness, “The key to successful marketing is superior product performance. … If the consumer does not perceive any real benefits in the brand, then no amount of ingenious advertising and selling can save it.”

To which Ogilvy responded

The best of all ways to beat P&G is, of course, to market a better product. Bell brand potato chips defeated P&G’s Pringles because they tasted better. And Rave overtook Lilt in less than a year because, not containing ammonia, it is a better product.⁹

Bill Bembach, who, like Ogilvy, was one of the luminaries of the postWorld War II advertising scene, was clear on the point:

I think the most important element in success in ad writing is the product itself. And I can’t say that often enough. Or emphasize it enough. Because I think a great ad campaign will make a bad product fail faster. It will get more people to know it’s bad. And it’s the product itself that’s all important and that’s why we, as an agency, work so closely with the client on his product—looking for improvements, looking for ways to make people want it, looking for additions to the product, looking for changes in the product. Because when you have that, you are giving the people something that they can’t get elsewhere. And that is fundamentally what sells.¹⁰

Rosser Reeves, a scarcely less distinguished figure in the field than Ogilvy and Bembach, observed

The agency can induce the client to change his product, improve his product. We have done this on numerous occasions. … A great advertising man of three decades ago once said: “A gifted product is mightier than a gifted pen.” How right he was! This is not a secondary road. It is often the first, and the best road, to travel.¹¹

During our own professional careers, we have studied the reports of scores, perhaps hundreds, of blind product tests on our clients’ brands. From this experience we found it so normal to expect different preferences for diffe...