do growing brands win younger

7/28/2019 Do Growing Brands Win Younger

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International Journal of Market Research Vol. 52 Issue 4

FORUM

Do growing brands win younger

consumers?

Katherine Anderson and Byron SharpEhrenberg-Bass Institute for Marketing Science at the University of South Australia

Are.young.consumers.easier.to.attract?.We.shed.some.light.on.the.presumption.

that. younger. consumers. are. less. loyal. to. brands. and.more. willing. than. older.

consumers.to.try.new.brands.Analysis.of.230.brands.from.12.categories.revealed.

a. tendency. for. new.and. growing.brands. to. skew. towards. younger. consumers.

This.suggests.that.younger.consumers.are.slightly.easier.for.brands.to.attract.The.

most.plausible.explanation.is.that.younger.consumers.are.more.likely.to.be.new.

buyers. of.the. category.We. therefore. caution. that.our. results. do.not.support.a.

marketing.strategy.strongly.targeting.younger.consumers.If.a.brand.grows,.then.

it.is. likely. to.attract.a.slightly.disproportionate.number.of.younger.consumers.However,.it.does.not.follow.that,.if.it.seeks.largely.to.attract.younger.consumers,.

it.will.grow

Introduction and background

Are.young.consumers.more.willing.to.try.different.brands?.Are.they.easier.

targets. if. you. are. trying. to. grow. your. brand?. A. colleague. in. industry.had. noticed. that. spirits. brands. that. were. growing. strongly,. like. Patron.and.Grey.Goose.(UK.2006.data),. tended. to.over-index. among.younger.consumers,.while.those.that.were.declining.tended.to.over-index.among.older. consumers.We.were. curious.whether. this. pattern.was. evident. in.purchase.data.from.other.categories.and.what.plausible.explanations.there.might.be.We.were.particularly.intrigued.by.this.pattern.because.research.by.Ehrenberg. and. colleagues. has. demonstrated. that. such. deviations. are.uncommon,.with.rival.brands.tending.to.sell.to.similar.types.of.consumer.

Received.(in.revised.form):.21.October.2009


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Forum: Do growing brands win younger consumers?

(Hammond. et al.. 1996;. Kennedy. &. Ehrenberg. 2000a,. 2000b,. 2001a,.2001b;.Ehrenberg.&.Kennedy.2000;.Kennedy. et al..2000).However,.it.

seemed.plausible. that,.within. the. small.deviations. that.do.exist.between.rival.brands,1.a.systematic.pattern.might.be.evident

Research approach

We.analysed.purchase.data. for.230.brands.across.12.product.categories,.looking. for. a. systematic. pattern. in.the.data.Categories. included.coffee,.bar.confectionery,.dog.food,.beer,.spirits,.cars,.internet.service.provider,.mobile.phone.provider,.health.insurance,.car.insurance,.credit.cards.and.

financial.services.Some.of.these.categories.grew,.and.some.declined.over.the.period.studied,.providing.a.robust.sample.The.data.were.generously.provided.by.the.Nielsen.Company.and.TNS.The.Nielsen.Panorama.Survey.data.described.claimed.purchase.behaviour.(penetration).in.the.Australian.market. for. 2001. and. 2006.The. TNS. Superpanel. data. described. actual.purchasing.behaviour.(volume).in.the.UK.market.for.2005.and.2007.By.comparing.two.periods.of.data,.we.were.able.to.determine.which.brands.grew.(relative. to.the.category),.which.declined.(relative. to.the. category).and.which.were. new. to. the. category,. and. investigate.whether. the. user.

profiles.of.these.brands.were.systematically.differentFrom.the.raw.purchase.data.(2006/7),.the.proportion.of.each.brands.sales/customers. from. each. age. group. was. calculated. . the. brands. age.profile.The.profile.of. each. brand.was. compared. to. the. age.profile. for.that.product.category.The.proportion.of.users.younger.than.30.for.each.brand.was.plotted.against.brand.performance.(new.brands.were.assigned.a.growth.rate.of.100%.for.the.period).The.axis.intercepts.were.calibrated.against.the.categorys.performance.and.user.profile.(see.Figure.1),.dividing.the.scatter.plot.into.quadrants.of.older.and.growing,.youthful.and.growing,.

youthful.and.declining,.and.older.and.declining.The.proportion.of.brand.users.older.than.55.was.plotted.in.the.same.way.for.each.category.These.category.charts.provided.a.broad.snapshot.of.the.patterns.in.the.dataTo. quantify. how. well. a. brand. performed. in. each. age. group,. index.

numbers.were.calculated.using.the.product.category.profile.as.the. base.The.index.numbers.for.each.brand.were.independently.assessed.by.both.authors.Brands. that. skewed. towards. younger. or.older.consumers.were.identified.and.counted.Age.was.considered.in.relative.rather.than.absolute.

1. Ehrenberg.and.Kennedy.had.previously.noted.a.few.systematic.differences,.eg.childrens.brands.skew.towards.children,.Scottish.newspapers.have.more.Scottish.readers.(Kennedy.&.Ehrenberg.2000a)


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terms.(ie.younger.not.young).as.the.absolute.age.of.new.category.buyers.is. dependent. on. the. category,. eg. consumers. enter. the. beer. category.

decades.before.they.enter.the.market.for.high-cholesterol.margarine.Also,.brands. that. skewed. towards. a. particular. age. group. because. of. obvious.functional. differences,. like. Kinder. Surprise. or. Australian. Pensioners.Insurance.Agency,.were.removed.The.remaining.230.brands.were.divided.into.three.groups..new,.growing.and.declining..and.patterns.within.and.across.each.group.were.identified.by.the.authors

Results

Figure.1.and.Table.1.show.the.results.from.one.category,.coffee.Figure.1.illustrates.the. relationship. between.customer.base.growth. and. a.brands.user. profile. In. the. coffee. category,. new. and. growing.brands. tended. to.have. more. youthful. user. profiles,. as. demonstrated. by. the. clustering. of.data.points. in. the. top-right.quadrant. Four.of. the. six.brands. that. grew.more. than. the. category. between. 2001. and. 2006. also. had. more. users.under.the.age.of.30.than.the.category.Declining.brands.tended.to.have.fewer.younger.users,.as.demonstrated.by.the.clustering.of.data.points.in.the.bottom-right.quadrant.Eight.of.the.ten.brands.that.declined.over.this.

Figure 1 User prole of coee brands vs performance (2006)

R2 = 0.55099

0 5 10 15

100

80

60

40

20

0

20

40

60

80

100

20 25 30 35

Proportion of brand users1429 years old

Growth%2

0016

Growing

Declining

YouthfulOlder


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Tab

le

1

Userprofileofcoffeebrands

Category

Users

2001

(000s)

Users

2006

(000s)

Change

20016(%)

Agegroup

s(yearsold)

14

17

1824

2529

3034

3539

4

044

4549

5054

5559

6064

65+

Category

Buyers

2

6,2

16

16

,475

37

515

1599

1179

1674

1591

1865

1584

1657

1513

1005

2603

Pro

file(%)

100

3

10

7

10

9

11

9

10

9

6

16

Index

base

100

100

100

100

100

100

100

100

100

100

100

100

Brands

Users

2001

(000s)

Users

2006

(000s)

Change

20016(%)

Brandprofilesindexnumbers

New

Riva

0

432

106

177

99

104

78

73

88

82

74

108

112

Piazza

DOro

0

241

270

166

130

166

92

86

101

76

60

69

35

Growing

Nesca

f

6240

6714

8

126

115

99

101

93

101

97

95

94

96

100

Lavazza

1225

1130

8

75

86

145

109

126

111

109

107

97

90

59

Vittoria

1368

1215

11

56

80

101

111

113

121

118

108

110

91

73

Moccona

3364

2295

32

78

74

104

102

114

102

104

112

104

100

94

Declining

Ro

bert

Timms

959

559

42

87

103

94

131

96

85

87

112

101

99

96

Harr

is

1210

579

52

34

53

64

81

122

98

112

117

151

121

102

Maxwe

llHouse

1598

681

57

67

85

75

81

81

81

115

110

101

130

138

Internationa

lrestaurant

3098

1192

62

79

94

100

75

96

101

94

93

101

88

136

Ca

fAurora

867

262

70

137

128

65

134

117

86

97

89

97

115

69

Supermarket

1035

310

70

116

91

87

94

78

96

89

56

107

113

158

Jarra

h

1058

300

72

109

150

95

110

84

105

71

57

89

100

120

Bushe

lls

1490

417

72

70

73

102

67

91

99

91

102

101

116

145

Me

litta

892

209

77

156

40

68

67

81

90

86

121

138

152

130

An

dron

icus

1120

249

78

52

80

109

93

102

54

111

146

129

127

91

*Users

denotesthepro

jecte

dnum

bero

fcategory

/bran

dusers

inAustra

lia

ba

sedonasamp

leo

fn

~20

,000


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period.had.fewer.users.under.the.age.of.30.than.the.category.The.inverse.pattern.was.evident.when.the.proportion.of.brand.users.older.than.55.was.

plotted;.declining. brands. tended. to.have.more.older.users.and. growing.brands.tended.to.have.fewer.(results.not.shown)

Similarly,.as.Table.1.details,.both.the.new-to-market.brands,.Riva.and.Piazza. DOro,. skew. towards. young. consumers. . index. numbers. across.the. younger. age. groups. are. greater. than. 100. Similarly,. growing.brands.tend.to.over-index.among.consumers.younger.than.45,.the.median.age.of.buyers.of.this.category.This.skew.is.more.pronounced.for.brands.that.grew.particularly.strongly,.like.Nescaf.and.Lavazza.Furthermore,.as.expected,.many.of.the.declining.brands.over-index.among.older.consumers.While.

there.are. some.exceptions,. such.as.Caf.Aurora,.the.overall.pattern.was.for.new.and.growing.brands.to.over-index.among.younger.consumers.and.declining.brands.to.over-index.among.older.consumers,.as.highlighted.by.the.bold.numbers.in.Table.1

The. same. procedure. was. repeated. across. the. other. 11. product.categories,.the.results.of.which.are.summarised.in.Table.2.Across.the.12.product. categories,. the. new-to-market. brands. were.most. likely. to. skew.towards. younger. consumers. (3. to. 1. more. likely. to. skew. younger. than.older).Growing.brands.were.also.more. likely. to.skew.towards.younger.

consumers. In. complete. contrast,. declining. brands. were. more. likely.to. skew. towards. older. consumers. The. presence. of. younger. customers.appears.to.be.an.indicator.of.brand.health,.with.declining.brands.tending.to.have.a.disproportionate.number.of.older.customers.and.lack.of.younger.customers

Discussion

Pervious.research.has.established.that.brand.growth.(and.decline).is.largely.driven.by.customer.acquisition.(Riebe.2003).Our. finding,.that. growing.

Table 2 Pattern of age skews across 12 categories

New brands Growing brands Declining brands

Skewed towards n = 69 (%) n = 96 (%) n = 94 (%)

Younger consumers 48 34 19

Middle-aged consumers 7 15 14

Older consumers 15 24 30

No skew 33 23 31

Total 100 100 100


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brands.tend.to.skew.towards.younger.consumers,.indicates.that.younger.consumers. are. slightly.more.easily. acquired.A.plausible. explanation.for.

our.results.is.that.younger.buyers.account.for.a.disproportionate.percentage.of. those. consumers. that. are. available. for. brands. to. acquire. Younger.consumers. are.more. likely. to. be. new. category. buyers. adopting. brands.as.they.establish.a.repertoire,.and.therefore.represent.a.disproportionate.amount.of.the.consumers.available.for.a.brand.to.acquire.Consequently,.younger. consumers. are. more. easily. attracted,. in. comparison. to. older.consumers.who.buy.new.brands.less.often.because.they.already.have.an.established.repertoire.of.brands.from.which.they.tend.to.buy.Following.Riebes. findings,. declining. brands,. which. are. failing. to. win. many. new.

customers,. are. not. replenishing. their. customer. base. with. the. younger.customers. needed. to. offset. the. ageing. of. their. existing. customers,. and.consequently.their.brand.profile.gradually.begins.to.skew.olderAn.alternative,.perhaps.more.salient,.interpretation.is.that.young.people,.by.virtue.of.their.youth.are.less.loyal.There.is.a.widespread.belief.among.marketing.practitioners.that.young.people.are.fickle.and.hence.less.loyal.to.brands.For.example,.Young.&.Rubicams.Simon.Silvester.contends.that,.when.consumers.are.young.they.relish.new.experiences,.are.promiscuous.in.their.brand.buying.and.responsive.to.new.ideas,.but.that.as.consumers.

grow.older.their.buying.habits.ossify.and.their.brand.repertoires.become.fixed.(Silvester.2002,.2003).However,.our.results.do.not.lend.credence.to. this,.widely. spread,. speculation. Across. the. 12. categories,.only. 48%.of. new-to-market. brands. skewed. towards. young. people,. a. far. lower.proportion.than.would.be.expected.if.young.people.really.were.more.fickle.and.willing.to.experiment.Furthermore,.new.and.growing.brands.tended.to.skew.towards.younger.buyers,.but.not.necessarily.young..it.depended.on.when.consumers.were.likely.to.be.entering.the.category.or.considering.new. product. varieties. So,. for. low-cholesterol. spreads,. growing. brands.

over-index.among.younger.consumers,.meaning.those.aged.4564.years.old. It. might. be. easier. to. attract. consumers.who. are. younger. than. the.average. buyer.of. your. category,. but. they.may. not. necessarily. be.young.per.seAs.for.the.notion.of.older.consumers.being.unwilling.to.try.new.brands,.our. results. show. that. this. is. an. exaggeration. None. of. the. skews. was.extreme.and,.besides,.of.the.69.new.brands.we.analysed,.1.in.7.of.them.skewed. towards. older. demographics,. highlighting. that. older. consumers.do.purchase.new.brands.and.that.the.brand.loyalties.of.older.consumers.are.not.completely.entrenched.Furthermore,. as.Table.2. illustrates,.33%.of.new.brands.did.not.skew.to.any.particular.age.group,.instead.acquiring.


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a. normal. amount. of. young,. middle-aged. and. old. consumers. This. is.particularly.notable.as,.in.most.categories,.consumers.55-plus.account.for.

about.30%.of.buyers,.so.a.new.brand.had.to.acquire.quite.a.few.older.consumers. for. it. to.have. even.a. normal.age. profile.These.results. cast.doubt.on.the.conventional.wisdom.that,.soon.after.reaching.middle.age,.consumers.fix.their.brand.repertoires.and.rarely.consider.new.brandsWhile.about.two-thirds.of.brands.we.studied.showed.an.age.skew,.it.is.

important.to.note.that.these.skews.were.generally.small,.especially.once.put.into.the.context.of.the.brands.age.profile.Take,.for.example,.Nescaf.in.Table.1,.which.skewed.towards.younger.consumers.Nescaf.has.more.customers. aged. 1417. than. expected,. as. signified. by. the. index.number.

of. 126. But. a. mere. 39%. of. its. customers. fall. into. this. demographic,.which.is.only.slightly.more.than.would.be.expected.given.that.31%.of.category.buyers.are.1618.years.old.As.for.the.other.961%.of.Nescafs.customers,.they.come.from.all.age.groups.Consistent.with.past.findings,.the. dominant.pattern. in. user-profile. results. is. that. customer.profiles.of.competing. brands. are. very. similar. (Hammond. et al. 1996;. Ehrenberg.&.Kennedy.2000;.Kennedy.et al. 2000;.Kennedy.&.Ehrenberg. 2000a,.2000b,.2001b)The. patterns. in. the. data. suggest. that. young. consumers. are. slightly.

easier.to.attract.Not.because.they.are.innately.less.loyal,.but.because.they.account. for. a. disproportionate. percentage. of. the. consumers. available.for.a.brand.to.acquire.in.any.given.year.However,.one.limitation.of.our.aggregate-level.research.is.that.we.cant.prove.this.directly.We.cant.track.the.behaviour.of.individuals.and.see.what.proportion.of.category.buyers.are.new.to.the.category,.or.what.proportion.of.these.new.category.buyers.are. younger. Further. research. to. confirm. our. assumptions. would. be.valuable,.although.we.recognise.the.great.difficulties.in.conducting.such.research.empirically

Conclusions

Our. research. indicates. that. younger. consumers. are. slightly. easier. for.brands.to.attract.We.believe.this.is.because.they.are.more.likely.to.be.new.to. the.product. category. and.not. yet. the. established. customers. of. other.brands.Younger.consumers.are.more.likely.to.be.new.to.the.category.and.adopting. brands. to. develop. a. repertoire,. so. they. probably. account. for.a. disproportionate. percentage. of. the. consumers. available. for. a. brand.to. acquire. This. matters. because. brand. growth. depends. so. heavily. on.acquisition


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The.results.underscore.that.brand.loyalty.is.alive.and.well..its.not.easy.to.change.the.habitual.loyalties.of.buyers.and.win.them.over.from.other.

brands,.but.it.is.possible.The.brand.loyalties.of.older.consumers.are.not.completely.entrenched.or.unchangeable.While.young.consumers.may.be.slightly.easier.to.win.as.customers,.it.is.difficult.for.a.brand.to.grow,.and.near.impossible.for.it.to.be.a.big.brand.without.selling.to.consumers.from.all.age.groups

Implications for strategy

Growing. brands. should. expect. that. a. disproportionate. percentage. of.

their.new.customers.will.be.young,.or.rather.younger.than.their.existing.customers. But. whether. marketers. ought. to. skew. their. advertising,.distribution.and.sales.efforts.to.younger.consumers.is.an.entirely.different.matter. For. new. brands. that. are. under. time. and. budgetary. pressure.to.prove. their. commercial. viability,. it. makes. sense. to. go. for. the. easier.targets. . at. least. at. first. And,. for. established. brands,. its. important. to.reach.younger.consumers.who.are. learning.about.brands.But.we.would.caution.marketers.against.targeting.younger.consumers.exclusively.Brands.that. successfully. grow. are. likely. to. have. a. base. of. somewhat. younger.

customers,.but.this.does.not.mean.that.targeting.younger.consumers.is.the.path.to.growth.No.marketing.or.media.strategy.should.deviate.much.from.the.demographic.groups.that.deliver.most.of.the.category.sales.volume

Acknowledgments

We.acknowledge.Andrew.Barnett.of.Highland.Distillers.(UK),.whose.work.inspired.this.study

References

Ehrenberg,.ASC.&.Kennedy,.R.(2000).Users.of.competitive.brands.seldom.differ.Paper.presented.at.the.Market.Research.Society.Conference,.Brighton,.UK,.1517.March

Hammond,.K,.Ehrenberg,.ASC.&.Goodhardt,.GJ.(1996).Market.segmentation.for.competitive.brands.European Journal of Marketing,.30,.12,.pp.3949

Kennedy,.R.&.Ehrenberg,.A.(2000a).Brand.user.profiles.seldom.differ.(Research.Report.No.7).Adelaide:.Ehrenberg-Bass.Institute.for.Marketing.Science

Kennedy,.R.&.Ehrenberg,.A.(2000b).The.customer.profiles.of.competing.brands.Paper.presented.at.the.29th.European.Marketing.Academy.Conference,.Rotterdam.Erasmus.University,.2326.May

Kennedy,.R.&.Ehrenberg,.A.(2001a).Competing.retailers.generally.have.the.same.sorts.of.

shoppers.Journal of Marketing Communications,.7,.Special.Retail.Edition,.pp.18


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Kennedy,.R.&.Ehrenberg,.A.(2001b).There.is.no.brand.segmentation.Marketing Insights,Marketing Research,.13,.1,.Spring,.pp.47

Kennedy,.R,.Ehrenberg,.A.&.Long,.S.(2000).Competitive.brands.user-profiles.hardly.differ.

Paper.presented.at.the.Market.Research.Society.Conference,.Brighton,.UK,.1517.MarchRiebe,.E.(2003).Normal.rates.of.defection.and.acquisition.and.their.relationship.to.market.share.change..Unpublished.PhD,.University.of.South.Australia,.Adelaide

Silvester,.S.(2002).Youre.getting.old.Admap,.433,.pp.2931Silvester,.S.(2003).The.ageing.populations.threat.to.innovation.Market Leader,.Autumn,.22,.pp.4149

About the authors

Katherine.Anderson.is.a.research.associate.at.the.Ehrenberg-Bass.Institute.for.Marketing.Science.at.the.University.of.South.Australia,.AustraliaByron. Sharp. is. Professor. of. Marketing. Science. and. director. of. the.

Ehrenberg-Bass.Institute.for.Marketing.Science.at.the.University.of.South.Australia,.AustraliaAddress. correspondence. to:. Katherine. Anderson,. Ehrenberg-Bass.

Institute,.University.of.South.Australia,.North.Terrace,.Adelaide.SA.5000,.GPO.Box.2471,.Adelaide.SA.5001Email:.KatherineAnderson@UniSAeduau


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do growing brands win younger

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