Decades of research revealing patterns in buying behaviour and marketing metrics leads to the conclusion that brands compete largely in terms of mental and physical availability.   Brands that are better known, and noticed, by more people, and brands that are more widely available, have greater market share.  Larger market share brands have greater physical and mental availability, and also have larger marketing budgets to support these assets.  Surprisingly, other brand differences have little impact.  McDonalds, Pizza Hut, and KFC are potentially differentiated in many different ways, not least in that they sell functionally different food (burgers, pizza, and fried chicken respectively) yet essentially they compete as fast food brands – with McDonalds maintaining a mental and physical availability advantage.  Each fast food brand sells to the same sorts of buyers, who hold similar attitudes about the brand(s) they use, and fast food brands share buyers with each other as if they are direct substitutes.  Indeed fast food brands spend considerable time reminding buyers of their similarities e.g. McDonalds stressing that they offer chicken (burgers), KFC stressing that they offer (chicken) burgers.

• Brands within a product category sell to near identical consumer bases, each brand’s consumer base differs from others chiefly in terms of size (i.e. numbers of buyers), not in demographics, psychographics, personality characteristics, values or attitudes (Kennedy and Ehrenberg 2000; 2001; Hammond, Ehrenberg and Goodhardt 1996; Evans 1959).  Segmentation and targeting efforts show little effect at brand level other than that brands vary in market share (but within the same essentially unsegmented market).
• Buyers of a brand generally do not see their brand as different from competitors (Romaniuk, Ehrenberg and Sharp 2004), whether for symbolic, emotional or more prosaic reasons.  Buyers very rarely see different brands as unacceptable.  Buyers of one brand express much the same attitudes about that brand, and reasons for buying it, as buyers of another brand say about their brand (Barnard and Ehrenberg 1999).  And when buyers adopt a new brand their attitudes change in favour of that brand.  There is a lack of evidence of brands being able to build special values that successfully differentiate (and hence insulate) them from competitors.  Buyers simply know and like the brands they buy, and they are vastly more likely to notice, consider and buy these brands over others.  Regardless of this lack of differentiation or special values, brands do have real market-based assets and loyal buyers.
• Buyers are polygamously loyal, having personal repertoires of brands they repeat purchase.   They are seldom 100% loyal to one brand and never in the long term (Ehrenberg and Uncles 1999).  So competing brands share consumers.  And they do so with every other brand in the category, and how much they share with any other brand depends simply on that brand’s market share.  All soft-drink brands share a good deal with Coca-Cola and far less with Fanta (McDonald and Ehrenberg 2002). When soft-drink brands gain sales they steal from all the other brands in proportion to market shares.  Partitions of brands that share more or less of their buyers with each other are rare and weak – instead all brands compete as if they were close substitutes in spite of their physical or perceived differences.  Diet Pepsi and Diet Coke do share buyers somewhat more than expected but both still share far many more of their buyers with Coca-Cola and any other large share brands.

These empirical patterns show that brands compete largely as branded versions of the product category, with their functional and image differences, and (within limits) price-quality level, doing little to differentiate them.

Long-run Revenue Flows

Brands, whether large or small, are able to survive, often for very long periods, because they are able to maintain their market-based assets of mental and physical availability.  And growth depends on enhancing these assets.  Even temporary advantages, such as most product or service feature advances, can enhance these potentially sustainable assets.  Indeed advantages that do not enhance these assets give no long-term gain.  For example, price promotions, because of their lack of reach, appear to do nothing to enhance these assets even though they cause noticeable sales uplifts.  When the price promotion ends sales return to normal predominately because in-store price promotions reach so few buyers, and are particularly poor at reaching new potential buyers of the brand (Hammond, Ehrenberg and Long 2000).

Mental Availability

Mental availability (brand salience) depends on the quality of branding and advertising execution, with distinctive consistent icons and imagery building memory associations that allow the brand to be noticed and recalled across as wide a range of buying situations as possible (Romaniuk and Sharp 2004).  Advertising works best when it reaches all the market (all category buyers) and refreshes and builds brand salience.  And it can do so without persuasive messages (Ehrenberg, Barnard, Kennedy and Bloom 2002).  Advertising is needed because all brands have many light occasional buyers who can very easily forget about the brand, especially as they are exposed to vast amounts of competing advertising.

Physical Availability

Physical availability requires making the brand as easy to notice and buy as possible, across as wide a range of buying situations as possible.  This includes more than retail penetration, but also presence in store.  It includes hours of availability, frequency of stock-outs, and ease of facilitating the purchase.  Being easy to notice and buy is essential because buyers do not have strong preferences even for the brands they are loyal to; they are happy to buy alternatives from within their personal repertoires (as they regularly do).

Marketing in Retreat

Building physical and mental availability requires a focus on reach.  Reaching more category buyers, more often, and in more situations.  This is the sort of bold old-fashioned mass marketing that built the world’s leading brands.  Yet this is counter to the ‘conventional wisdom’ of our day.

While marketers berate large media like TV and newspapers for losing ratings the fashion is to turn to media that offer infinitesimal audiences.

Loyalty programs are at an all time high, yet they typically reach only a  fraction of a company’s potential buyers.

Almost every marketing consultant on the planet advocates  strategies that target small parts of the market, or use messages that appeal to small segments.  This targeting and differentiation is supposed to build loyalty.  What it does is ignore and even exclude potential buyers.

At the same time ‘conventional wisdom’ dictates the use of efficiency (or high ‘ROI’) strategies.  These strategies are all crafted around marketing to the already loyal buyers of the brand, or selling to people who were mostly going to buy anyway.

All of this is marketing in retreat; avoiding the hard battles, picking battles that have already been won, preaching only to the converted consumers.  This doesn’t build mental and physical availability nor share.

A Brighter Future for Marketing

Few marketing departments today  see themselves as the custodians of these precious market-based assets.  While it is commonplace to talk of building ‘strong brands’ rather than short-run sales, managers have little in the way of scientific knowledge about building and managing these assets, and rarely do they have comprehensive metrics covering mental and physical availability.  But this will come.  Until then considerable management thinking time will no doubt be wasted on esoteric quackery concerned with targeting, differentiation, and how buyers perceive and evaluate brands (e.g. brand personality, lovemarks, brand essence,  commitment, voltage).  But as more managers come to realise how brands really compete management attention should shift towards brand salience and physical availability building activities.  More attention will be spent on branding, media strategy, distribution, in-store display – there is a great deal of R&D and experimentation that needs to be done in these areas to improve marketing effectiveness.

Marketing often fails to gain the boardroom respect it deserves.  In large part this is because marketing practice today essentially functions as a  part of the production department, producing advertising and promotions.  Development of specialist knowledge of market-based assets may lead to greater respect for marketing as a business function.  It is a significant opportunity because no other part of the organization measures and therefore can claim to manage these intangible assets.  The same cannot be said for functional activities such as product development, customer service, and pricing.  Which are predominately outside of marketing’s control.

In summary, in the long run brands essentially compete for market dominance in terms of mental and physical availability.  Even product innovation predominately works, when it works, through enhancing brand salience and gaining further distribution.  Building brand salience requires distinctiveness and clear branding, but brands seldom compete via meaningful differentiation.  This means that marketing attention should be focused on building these market-based assets so that the brand is easier to buy, for more people and in more buying situations.