Dedication
I dedicate this book to Byron Sharp, the man through whom I learned Marketing Science, and to the researchers at the Ehrenberg-Bass Institute.
Apparently, the earth revolves around the sun.
Acknowledgement
I have benefited from the contributions of many important people while writing this book.
İpek Özel has contributed significantly to this book’s completion and to the blog articles that I write every week at www.temelaksoy.com.
Brand Consultant Bora Alçı read the draft of the book twice, and his thoughts were extremely valuable. I took his criticisms to heart and made the changes he suggested.
My daughter Zeynep worked with me on an early draft of the book. She helped me rewrite sections that were unclear.
Cover art was provided by Tom Fishburne, who gave me permission to use his cartoons My portrait illustration was executed by Refika Görkem Gül. Ilhami Durmaz designed the cover of the book.
Robert Johnson translated my book from Turkish to English.
Editor Kristen Havens not only ensured the original text flowed naturally in this English-language version, she also provided valuable insights on how to expand and enhance the book to make it appeal to an even broader audience of English-speaking businesspeople. Her talent, knowledge and facility with organizing and conveying ideas has made the work of expanding this edition a true pleasure.
Copy editor Carl Quesnel, of Assurance Editorial, further clarified my writing and checked my References for accuracy. The skill, experience and impeccable attention to detail he applied make this book an even more valuable resource for readers.
I am deeply indebted to my editor Sevim Erdoğan for making the book a reality. If she hadn’t suggested that I write the book, it might have languished in my mind for a long time.
I am grateful to all of the wonderful people named above, many of whom are very close to me.
Contents
Acknowledgement
Preface
Full List of Marketing Myths and Realities
Introduction
1 The “Raison d’Etre” for Companies Is to Provide Benefit to People
2 Praise for Marketing
Understanding The Consumer
Motivations
3 Maslow’s Hierarchy of Needs Theory Is a Marketing Myth
4 We Want to Be Both “Me” and “We” (Need Set 1)
5 We Want Control, but We Also Want to Release (Need Set 2)
6 Marketing Is the Design of Behavioral Architecture
Emotions
7 The Seven Characteristics of Emotions
8 Emotions Have Logic Too
9 Human Memory Does Not Record Anything without Emotion
Decision-Making
10 People Think in Metaphors
11 Fast and Slow Thinking
12 The Primal Brain Directs Human Behavior
13 People Make Decisions with Their Emotions
14 People Use Shortcuts to Make Decisions
Product, Brand and Buying
15 Every Product and Service Serves a Purpose in People’s Lives
16 What Is More Important: The Product or the Brand?
17 Every Brand Has a Value Proposition
18 Products Are Created in Factories, Brands in Minds
19 How Do Shoppers Behave?
20 Brand Is Imaginary Added Value
21 Humans Create Meaning While They Consume
22 Brand Value Estimation Is a Marketing Myth
Marketing Laws
23 Assumptions of Traditional Marketing
24 Marketing Is about Managing a World of Possibilities (The Origins of Scientific Marketing)
25 Marketing Is a Science
26 Double Jeopardy Law (Law 1)
27 Large Brands Lose a Smaller Percentage of Customers (Law 2)
28 20% of Customers Account for 60% of Revenues (Law 3)
29 Over Time, Heavy Users Become Light Users (Law 4)
30 Natural Monopoly Law (Law 5)
31 Rival Brands Sell to Similar Users (Law 6)
32 The Image of Growing Brands Improves (Law 7)
33 Behavior Drives Attitude (Law 8)
34 Competing Brands Share the Same Image Attributes (Law 9)
35 Duplication of Purchase (Law 10)
36 Limits of Marketing Laws
Brand Management
Brand Differentiation
37 Brands Are Not an Important Part of People’s Lives
38 Brand Positioning Is a Marketing Myth
39 Brand Personality Is a Marketing Myth
40 Brands Are Not People but Software
41 Iconic Brands Are Also Subject to Marketing Laws
Segmentation and Targeting
42 Narrow Targeting Is a Marketing Myth
43 The Typical User of Every Brand Is a Light User
44 Every Brand Has Its Natural Target
45 Generational Theory Is a Marketing Myth
Brand Loyalty
46 Brand Loyalty Is Formed by Habit
47 Loyalty Programs Are a Marketing Myth
48 Lovemarks Are a Marketing Myth
49 100% Loyalty
50 Loyalty Pyramids Are a Marketing Myth
51 NPS Is a Marketing Myth
Brand Identity
52 Brands Cannot Differentiate but Can Distinguish Themselves from the Competition
53 Do Not Take a Brand’s Name Lightly
54 Every Brand Must First Determine What Category It Will Operate In
55 Color Can Distinguish a Brand from the Competition
56 Brand Management Also Is Managing the World of Symbols
Distribution
57 Brands without Widespread Distribution Cannot Grow
58 Ensuring Online Availability Is Just as Difficult as Achieving Physical Availability
Price Discounts
59 Ease of Purchase Does Not Make Brands Grow
60 Price Discounts Have a Short-Term Effect
Brand-Consumer Relations
61 Every Brand Must Understand Its Own Cultural Context
62 Every Brand Must Be Customer Oriented
63 Exceeding Customer Expectations Is a Marketing Myth
Brand Experience
64 Experience Marketing
65 Four Approaches of Customization
66 Sensory Marketing
67 How to Design Customer Experience
68 What Is the Consumer Decision Journey?
Brand Communications
69 The Purpose of Advertising Is to Create Brand Memory
70 How Advertising Affects People
71 The Best Advertisement Uses a Story
72 The Effect of Advertising Takes Time
73 Brands Must Be Consistent in Their Advertising
74 People Don’t Watch TV Anymore Is a Marketing Myth
75 Prioritize Reach When Using Media
76 360-Degree Communications Is a Marketing Myth
77 Advertisement Planning Should Be “Channel Neutral”
78 The Inevitable Rise of Video
79 “Engagement” Is a Marketing Myth
80 Unsolved
Problems with the Online Advertising Channel
81 Brands Must Obey the Rules of Social Media
82 How to Do Effective Advertising
Corporate Brands
83 Brands Are Not Just for Customers (Consumers)
84 Brand Vision
85 Employee Brand
86 Corporate Social Responsibility
87 Brand Management Is the CEO’s Job
Market Research
88 Marketing Metrics
89 Understanding the Nature of Research
90 Bad Research Habits
91 How to Get Good Market Research
How To Do Marketing
92 Be Realistic, Cleanse Your Mind of Myths
7 Rules of Marketing
93 Rule 1: Focus on Reach
94 Rule 2: Be Easy to Buy
95 Rule 3: Get Noticed
96 Rule 4: Refresh and Build Memory Structures
97 Rule 5: Create and Use Distinctive Brand Assets
98 Rule 6: Be Consistent, Yet Fresh
99 Rule 7: Stay Competitive
100 The Dirichlet Model
References
PREFACE
A few years after graduating from university, I worked as an assistant at the Istanbul University School of Economics. After my brief stint in academia, I worked for 25 years in the market research sector. I conducted and directed countless research projects in almost every field and sector during my research career. I was always involved in the decision-making more than in the research itself. Toward the end of my career, the service I provided to customers would be better described as marketing consultation than market research.
Early on, I learned about marketing by reading books by authors like Theodore Levitt, Philip Kotler, David Aaker, Al Ries and Jack Trout. I was always eager to apply what I had learned in my work with customers. Over time I gained my own understanding of marketing influenced by these authors, and my ideas crystallized. The rules I formed can be summarized as follows:
Powerful brands each have their own unique personality.
A brand must exhibit certain differences for consumers (customers) to choose it over competing brands. Brands must communicate the virtues of these differences to consumers to persuade them.
This differentiation is a critical factor in becoming a brand. Differentiation is the heart of brand creation.
Differentiation doesn’t have to be purely innovation based. Brands differentiate themselves from competitors with unique positioning as well. Positioning a brand in the consumer’s mind is the most important marketing task a company faces.
Brands play an important role in people’s lives. People identify themselves using brands.
Every brand must strive to gain the loyalty of the people who identify with it, and the brand must grow by selling more products and services to this loyal audience.
This loyalty relationship established with users is very beneficial for brands because it’s cheaper to retain loyal customers than it is to acquire new ones.
Television commercials are no longer as effective as they used to be. Irritating people with the interruption of commercials is a marketing strategy of the past.
Brands must use new media (such as social media) to directly reach their target audience. They must interact with consumers and customers.
I continued to hold these rules sacred for most of my career in research. When I ended that career, I decided to work as a marketing consultant. I brought my own set of rules of marketing with me into that new venture.
In 2015, while I was busy either with a frenzied schedule of customer meetings or writing articles for the blog I published, I chanced upon a book. It was called How Brands Grow, by Byron Sharp, Professor of Marketing Science and the Director of the Ehrenberg-Bass Institute of Marketing Science at the University of South Australia.
Sharp’s book was unlike any marketing book I had read before. He set out to prove how brands actually grew, based on research gathered from different countries, companies and time periods. His resulting claims about brand growth ran contrary to everything I had learned from famous marketing authors—including all the information I listed above. What’s more, Sharp gave empirical findings and scientific data to support these claims.
While I was reading his book, I realized with a shock that all of the ideas that famous marketing gurus had put forward—the ideas of my mentors—were based on their own beliefs and experiences, and that none of them were supported by empirical evidence. None of them were scientific.
The theories of Byron Sharp and the Ehrenberg-Bass Institute, on the other hand, were based not on their own beliefs but on empirical evidence, which forms the basis of all science. Their approach transformed the understanding of marketing from a set of theories into a data-based science. The most important information in the book was the “Marketing Laws,” which I had been totally unaware of until that time. I had never encountered any “marketing law” in any of the books I had read on marketing—perhaps because no one had observed any. Although I had worked in the field for many years, I was hearing this term for the first time. Before Sharp, the concepts of marketing and science had never been connected in my mind. Like those before me, I considered marketing more of an art than a science.
I studied this book for a long time, followed by Sharp’s second book, entitled How Brands Grow 2, published together with Jenni Romaniuk in late 2015. I also read and reread almost all of the articles written by Byron Sharp and the writers at the Ehrenberg-Bass Institute. I developed tremendous admiration for Andrew Ehrenberg, the founder of scientific marketing. The reason I admired him was that he was the first social scientist to prove that people’s purchasing behaviors demonstrate patterns that could be generalized, that those behaviors could be predicted and that there are laws in marketing that are similar to the laws of nature.
This marketing approach taken by the Ehrenberg-Bass Institute, which operates in Australia and England providing consultancy services to the world’s largest brands, was radically different from the marketing approach that I had learned. I studied closely their research and the scientific evidence they presented. I eventually became convinced that the marketing laws put forward by the Ehrenberg-Bass Institute—concepts I had initially approached with skepticism—were in fact true.
As you’ll appreciate, it’s not easy for a person to accept the fact that the knowledge he has accumulated over many years is actually not relevant in real life. It was a lengthy process, and as the famous economist John Maynard Keynes said, “The difficulty lies not so much in developing new ideas as in escaping from old ones.” It was extremely hard for me to let go of what I once considered true. For two years, I questioned every idea, every opinion I had embraced about marketing. At the end of this process, my mind was set free from these “marketing myths.” I updated everything I knew about marketing based on what I now saw as the truths of scientific marketing. In the end, I decided to write this book.
My goal with this book is to share with you what I’ve learned about the myths and realities of marketing so that you can go through the same process I did—but hopefully in much less time. This book is focused on theory, but it’s also a practical guide to marketing, with hands-on advice and resources that anyone in marketing and brand management can use: C-level executives, managers and people at the start of their careers.
I’ll present the standard misconceptions that guide much of the marketing world today, and I’ll talk about how they came to become entrenched in practice. I’ll then show you how these myths aren’t helping brands, and I’ll share the realities about consumer behavior and brand growth—truths based on empirical evidence collected from the fields of behavioral science, neuroscience, statistics, economics and a number of related areas. These truths form the basis of sc
ientific marketing.
Full List of Marketing Myths and Realities
Maslow’s Hierarchy of Needs
Reality: In real life, people don’t satisfy their needs in an orderly, step-by-step fashion. Rather, they’re constantly seeking to satisfy opposing needs (details in chapter 3).
Brand Value Estimation
Reality: Independent valuation companies routinely valuate the same brands very differently. The idea of readily available brand valuations is a marketing myth with no true equivalent in real life (details in chapter 22).
Brand Positioning
Reality: The difference between brands in a single product category is due to the size of the brand. Two competing brands aren’t distinct from one another and can’t be differentiated by their individual characteristics or a “unique selling proposition” (details in chapter 38).
Brand Personality
Reality: The personality that marketers want to attribute to a brand won’t differentiate it from its competitors, because consumers don’t view brands this way. If people are asked directly, they’ll say that brands in the same category aren’t different from each other (details in chapter 39).
Narrow Targeting
Reality: What grows a brand is not a small number of frequent users but a large number of light users and first-time buyers. Brands grow by targeting a large number of people, not a segment (details in chapter 42).
Generational Theory
Reality: Young people won’t maintain the traits of their youth throughout their lives. The most important trait that does mark the youth demographic is income. The income of young people in every country around the world is lower than that of middle-aged and elderly individuals (details in chapter 45).
Loyalty Programs
Reality: Shoppers’ purchasing behavior doesn’t allow one brand to achieve loyalty that’s significantly higher than the sector average. The difference in loyalty between large brands and small brands is due to the number of customers they have (details in chapter 47).
Lovemarks
Reality: Brands don’t grow by appealing to passionate users and expecting them to buy more of the brand. This misconception is the king of all marketing myths. In reality, 80% of the users of a brand are first-time users or light users (details in chapter 48).