Millward Brown replication - successful brands have low perceived differentiation
26/06/11 17:58
Nigel Hollis has written a Millward Brown position piece on perceived differentiation. It starts with:
The book How Brands Grow by Professor Byron Sharp and the researchers of the Ehrenberg-Bass Institute makes an important contribution to the science and practice of marketing.
Which is extremely nice of Millward Brown to give such a public endorsement. Additionally the piece includes some data which confirms (tests and extends) a finding reported in “How Brands Grow”, i.e. that brands have surprisingly low perceived differentiation.
Jenni Romaniuk, Andrew Ehrenberg and I reported that perceived differentiation is usually low for all brands, in a number of different questionnaires. And now Millward Brown confirm this with one more questionnaire – a further replication:
...we [Millward Brown] find in the BrandZ database, which contains information on over 6,000 brands collected over 10 years from category buyers around the world - on average, the proportion of people willing to endorse any brand as “different from other brands of (a specific category)” is low.
Nigel goes on to write that perceived differentiation is higher among people for whom the brand is acceptable (presumably that means they buy it):
Among those that consider a brand acceptable, an average of 18 percent agreed that it was different from others, with a range of endorsement from 0 to 86 percent.
Yes, that’s right, Millward Brown report that the low level of differentiation is higher amongst these people at an average of 18%. Yes, it leaps to a massive 18%.
Or put another way, on average 82% of people who find the brand acceptable to buy will NOT endorse that it is "different from other brands in the category".
Now that mean of 18% is based on a skewed distribution. A few brands score quite high (like very expensive, high quality brands), but most will be less than the average – for almost all brands the majority of their customers do not see them as different.
That’s a perfect replication of our findings, by an independent group of researchers – with a strong record of promoting the gospel of differentiation.
The empirical data is clear, most of the successful brands in the world have very low perceived differentiation, yet they have loyal customers, they earn profits, and many of them have done so for many decades. And will continue to do so, and with low perceived differentiation.
Professor Byron Sharp. June 2011.