Millward Brown replication - successful brands have low perceived differentiation
27/06/11 01:49
Almost all successful brands have very low perceived differentiation, yet they have loyal customers, they earn profits, and many of them have done so for many decades.
Nigel Hollis has written a Millward Brown position piece on perceived differentiation. It starts with:
The book How Brands Grow by Professor Byron Sharp and the researchers of the Ehrenberg-Bass Institute makes an important contribution to the science and practice of marketing.
Which is extremely nice of Millward Brown to give such a public endorsement. And the article confirms a finding reported in “How Brands Grow”, i.e. that brands have surprisingly low perceived differentiation.
Jenni Romaniuk, Andrew Ehrenberg and I reported that perceived differentiation is usually low for all brands, in a number of different questionnaires. And now Millward Brown confirm this – a replication and extension across time, more brands, categories, and countries, and one more questionnaire:
...we [Millward Brown] find in the BrandZ database, which contains information on over 6,000 brands collected over 10 years from category buyers around the world - on average, the proportion of people willing to endorse any brand as “different from other brands of (a specific category)” is low.
Nigel goes on to write that perceived differentiation is higher among people for whom the brand is acceptable (presumably that means they buy it):
Among those that consider a brand acceptable, an average of 18 percent agreed that it was different from others, with a range of endorsement from 0 to 86 percent.
Yes, that’s right, Millward Brown report that the low level of differentiation is higher amongst these people, that is, it leaps to a massive 18%.
Or put another way, on average 82% of people who find the brand acceptable to buy will NOT endorse that it is "different from other brands in the category".
Now, for the technically minded, that average of 18% is based on a skewed distribution. A few brands score quite high (like expensive, high quality brands), but most will be less than the average – for almost all brands the majority of their customers do not see them as different.
That’s a perfect replication of our findings, by an independent group of researchers – with a strong record of promoting the gospel of differentiation.
The empirical data is clear, most of the successful brands in the world have very low perceived differentiation, yet they have loyal customers, they earn profits, and many of them have done so for many decades. And will continue to do so, and with low perceived differentiation.