How brands grow ?

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How Brands Grow: Key Insights from Research

Market Penetration and Customer Loyalty

Increased Penetration as a Key Driver

Research consistently highlights that increased market penetration is crucial for brand growth. Studies examining various brands over time have shown that growth is primarily driven by attracting new customers rather than increasing the purchase frequency of existing customers . For instance, an analysis of 353 brands in 21 categories of fast-moving consumer goods found that increased penetration is the key to share growth, even for brands that have been successful in the past. Similarly, another study of twelve US package-goods brands revealed that growth was largely due to a significant increase in the number of households buying the brand.

The Role of Customer Loyalty

While penetration is essential, customer loyalty also plays a significant role in leveraging the effects of penetration. Loyal customers not only contribute to consistent sales but also help in amplifying the brand's reach through word-of-mouth and repeat purchases . Research indicates that brand share growth is accompanied by greater changes in penetration than in loyalty, but loyalty still significantly supports the overall growth strategy.

Advertising and Brand Building

Advertising's Dual Role

Advertising is another critical factor in brand growth, serving both to increase sales and build the brand. Effective advertising nudges consumers through a hierarchy of effects—cognition, affect, and experience—ultimately leading to increased sales and stronger brand equity. This dual role of advertising underscores the importance of a well-rounded marketing strategy that not only focuses on immediate sales but also on long-term brand building.

Leveraging Distinctive Assets

Building mental availability and leveraging distinctive assets are also crucial for brand growth. These strategies help in making the brand more recognizable and memorable, thereby increasing the likelihood of purchase. Distinctive assets such as logos, colors, and slogans can create a strong brand identity that stands out in a crowded market.

Broader Branding Strategies

Brand Equity and Portfolio Management

A broader approach to branding that includes brand equity and portfolio management can offer more sustainable growth. This involves understanding the circular relationship between consumer attitudes and behaviors and how they impact brand performance. By not oversimplifying the evidence and considering multiple facets of branding, marketers can derive better managerial implications for sustainable growth.

Service Brand Growth

For service brands, growth strategies may differ slightly from those of goods brands. Key drivers for service brand growth include quality, personalization, and relationships. Maintaining consistent service quality and emphasizing relationship-based personalization can significantly contribute to the growth of service brands.

Conclusion

In summary, brand growth is a multifaceted process that involves increasing market penetration, fostering customer loyalty, effective advertising, and leveraging distinctive assets. A broader approach that includes brand equity and portfolio management can offer more sustainable growth. For service brands, focusing on quality, personalization, and relationships is essential. By understanding and implementing these strategies, brands can achieve significant and sustained growth.