The Cogs of Empirical Marketing, Part 2

“If you don’t know where you’re going, you’ll end up someplace else.” – Yogi Berra

Welcome back to the Cogs of Empirical Marketing — a better map to help you diagnose problems, drive strategy, develop tactics and grow your brand.

Because once you know exactly where you are, you can chart a course for precisely where you want to go. Okay, let’s start with Market Share, the big cog at the heart of it all. As you know, your market share is the percentage of industry sales (or revenue) earned by your brand during a given period of time. It’s your slice of the pie.

Why grow? Because size matters.

Generally speaking, the more market share you have the better off you are:

Larger brands have more customers who buy slightly more often. The Double Jeopardy Law — one of the few immutable laws of marketing — states that the market rewards bigger brands and punishes smaller brands twice over.
Market share has a multiplier effect. It’s the most important driver of marketing effectiveness. Why? Because larger brands are already more famous and have more penetration. People are more likely to pay attention to ads from brands they already know. Growing market share ultimately makes your job easier.
Larger brands have deeper pockets, and they can use their marketing budgets to play offense and defense.
The C-suite likes growth. So do shareholders.

(To be clear, we are talking about healthy, profitable growth. It is entirely possible to discount your way to both larger market share and financial oblivion. No one wants that.)

And there are other strategic reasons as well. Yorkshire Tea decided to grow their market share because sales were essentially stagnant year over year, profits were down, and they were #3 in a mature, declining category.

That left them more vulnerable to their competitors (private label brands in particular) and economic forces beyond their control — supply chain issues, the pandemic, inflation, etc. Also, tea is literally a commodity. A commodi-tea, if you will. You won’t? Okay, fine.

By building an even stronger brand and becoming the market leader, Yorkshire Tea is now in a much better position in terms of pricing and profitability.

The most efficient and effective way to create long-term market share growth is by building and reinforcing Mental Availability.

Mental Availability is the measure of how easily your brand comes to mind in a relevant buying situation.

In other words, when faced with a challenge, desire or need related to your category, do people remember and reach for your brand more often than your competitors?

And if not, why not? With the Cogs, we can figure out what’s going on. And the three KPIs of Mental Availability are …

Mental Market Share: What percentage of consumers’ memory does your brand occupy relative to your competitors across all Category Entry Points?

Mental Penetration: How many category buyers associate your brand with at least one Category Entry Point?

Network Size: On average, how many Category Entry Points do consumers associate with your brand?

Category Entry Points (CEPs) are situations or moments that trigger your category in the minds of your potential buyers. And context absolutely matters.

You want a decadent little chocolate treat. You might think of Dove or Lindt or other brands competing in that idea space.

You need chocolate because you’re making s’mores. You’re more likely to think of Hershey’s.

So if you’re a brand manager at, say, Ghirardelli, you might decide to take on Hershey’s by making “elevated s’mores” a Category Entry Point.

Or you might decide to do one of a hundred different things, but at least you’ll know where you are. Once you know where you are in the minds of consumers relative to your competitors, you can figure out where you want to go.

And here’s what a measure of Mental Market Share looks like:

So what does that tell you? Let’s zoom in.

If you’re above the line, your Mental Market Share is greater than Sales Market Share, you have a physical availability problem. Consumers know you, like you and trust you, but they have a hard time finding you on the shelves — real or digital.

One thing you could do to grow market share is direct more spending towards physical availability to exploit your mental advantage. So more paid search and Amazon, for example. Or it may be time to have a talk with your retailers.

If you’re below the line, your Sales Market Share is greater than your Mental Market Share, and you may have a comms challenge. You may want to create more branded advertising that has clear messaging and emotional cut-through.

Once you know how much mental real estate you hold in consumers’ minds, we can help you develop a plan to both defend your territory and gain ground.

For the next few weeks, we’ll continue to explore the Cogs of Empirical Marketing. Next week, we’ll talk about Integrated Campaigns. After that we’ll dig into Excess Share of Voice and Media Efficiency.

Hopefully, by the end of this series, you’ll have a really good idea of how all these elements work together to move market share. And how measuring them allows you to diagnose problems, drive strategy, develop tactics and grow your brand.

We’ll see you next time.

Sources!

Better Brand Health: Measures and Metrics for a How Brands Grow World – Jenni Romaniuk