Chapter 8
Customer Purchasing Benefit
The major cause of corporate and product failure, as well as the rapid increase in marketing expenditure required to meet sales targets, is a result of companies' or brands' inability to effectively differentiate themselves from their competitors.
Without establishing differentiation, there is little to no equity in the brand, and a poor performance is almost guaranteed.
Consumers see the overwhelming majority of brands in any category as being “me too!” Brand loyalty has broken down substantially, a fact that is strongly evidenced by the past three decades' rapid increase in decisions made at point of purchase. In 1975, the percentage of buying decisions made at point of purchase was, on average, 36 percent. Today it averages 74 percent. It is important to note that this percentage varies considerably between product categories. Even 10 years ago, the consumer shopping list specified brands; today the list is products, with the choice of brands being made at point of purchase. Most consumers today are happy to buy any one of three or four brands in the product category.
Strong brand positioning creates high customer commitment and loyalty. It produces compelling word of mouth. Each sale generates another sale, increased profits, and equity. Research shows that 60–75 percent of people try new products because of word of mouth compared to 25–40 percent due to advertising.
With strong brand positioning and product differentiation, a brand ...
