We explored the science that propels the system to be successful.
Check out our blog post here.
One important piece of the puzzle is brand’s customer bases and which—if any—buyers they should be targeting.
selling to all buyers
TARGETED MARKETING MASS MARKETING
Brands can market to their consumers in two major ways
selling to a distinctive segment of buyers
9%
25%
22%
44% Non-buyersLight buyersModerate buyersHeavy buyers
Buyer GroupsSample of leading brand of tomato sauce in the US
Source: How Brands Grow, Byron Sharp
Don’t buy at all44%
What does this chart tell us?Most buyers are light buyers. In many cases, almost 80% of a brand’s buyers can be light buyers.
They do have some heavy buyers, or people buying three Coca-Colas a day (1,000 per year), but there are far fewer of these.
Buying Frequencies
Source: TNS.
%
0
6
12
18
24
30
36
42
48
54
60
Number of purchases in a year0 1 2 3 . . . . . 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
% of UK cola buyers purchasing Coke x times, 2005
This graph tells us two things.In the 2005 UK cola market…
1. Only a very small percentage of consumers were heavy buyers. They purchased a Coca-Cola 50 or more times a year.
2. The bulk of customers were non or light buyers. They got just a couple Coca-Colas a year.
“Though Coca-Cola’s light buyers may be purchasing only one or two drinks a year, collectively they add up.”
— Byron Sharp, How Brands Grow
Nonetheless, brands insist that their customer bases differ from those of their competitors, whether that’s by gender, age, household size, or income.
“This is known as the ‘duplication of purchase’ law: brands share customers in line with brand size.”— Byron Sharp, How Brands Grow
The “Duplication of Purchase” LawCarte D’Or vs. Mars
% o
f buy
ers
who
also
bou
ght b
rand
0
5
10
15
20
25
30
35
40
45
50
Walls Dessert Ben & Jerry's Haagen Dazs Nestle Walls
Carte D'Or Mars
Source: How Brands Grow, Byron Sharp
This graph tells us two things.1. Brands share a far greater average percentage of customers with Carte
D’Or, the market leader, than with Mars, a smaller brand. This is in line with the market share, or overall size, of the two brands.
2. Competitors do not stray far from the average percent of buyers shared with the two brands. Brands sharing customers with Carte D’Or are sharing around 38%, while brands sharing customers with Mars are sharing around 7%.
What have we learned?1. Mass marketing is more effective than targeted marketing
Light buyers heavily dominate brands’ consumer bases, so targeting them will provide the greatest penetration potential
What have we learned?1. Mass marketing is more effective than targeted marketing
Light buyers heavily dominate brands’ consumer bases, so targeting them will provide the greatest penetration potential
2. Brands share customers in line with their brand size Brand growth lies in increasing market penetration
You can read the full story on how to grow your brand on the Percolate blog: Why Mass Marketing Wins Over Targeted Efforts
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Kat Gebert Kat Gebert is on the Product Marketing team at Percolate.