Why Mass Marketing Wins Over Targeted Efforts

Why Mass Marketing Wins Over Targeted Efforts

A brand is most effective in its creativity when it has a system.

We explored the science that propels the system to be successful.

Check out our blog post here.

One important piece of the puzzle is brand’s customer bases and which—if any—buyers they should be targeting.

Let’s begin.

MARKETING TYPES

selling to all buyers

TARGETED MARKETING MASS MARKETING

Brands can market to their consumers in two major ways

selling to a distinctive segment of buyers

But which of the two is most effective?

Targeted marketing has been touted as the smart, modern way to market.

This is a marketing myth.

“Mass marketing is actually more effective.”

— Byron Sharp, How Brands Grow

To better understand why this is the case, let’s take a look at a brand’s customer base.

CUSTOMER BASES

Consumers can be split up into non-buyers and light, medium, and heavy buyers.

9%

25%

22%

44% Non-buyersLight buyersModerate buyersHeavy buyers

Buyer GroupsSample of leading brand of tomato sauce in the US

Source: How Brands Grow, Byron Sharp

Don’t buy at all44%

What does this chart tell us?Most buyers are light buyers. In many cases, almost 80% of a brand’s buyers can be light buyers.

Now, an example of this in action.

Let’s look at Coca-Cola’s customer base.

Their average buy rate is 12 Coca-Colas per year, but most people buy only one or two per year.

They do have some heavy buyers, or people buying three Coca-Colas a day (1,000 per year), but there are far fewer of these.

Buying Frequencies

Source: TNS.

%

0

6

12

18

24

30

36

42

48

54

60

Number of purchases in a year0 1 2 3 . . . . . 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

% of UK cola buyers purchasing Coke x times, 2005

This graph tells us two things.In the 2005 UK cola market…

1. Only a very small percentage of consumers were heavy buyers. They purchased a Coca-Cola 50 or more times a year.

2. The bulk of customers were non or light buyers. They got just a couple Coca-Colas a year.

“Though Coca-Cola’s light buyers may be purchasing only one or two drinks a year, collectively they add up.”

— Byron Sharp, How Brands Grow

“DUPLICATION OF PURCHASE”

We’ve now established that all companies should mass market to non- and light buyers.

Nonetheless, brands insist that their customer bases differ from those of their competitors, whether that’s by gender, age, household size, or income.

Do customer bases actually look different across competitors?

No. Buyers look the same across competitors.

“This is known as the ‘duplication of purchase’ law: brands share customers in line with brand size.”— Byron Sharp, How Brands Grow

Let’s visualize the effect of the “duplication of purchase” law using the UK ice cream market.

The “Duplication of Purchase” LawCarte D’Or vs. Mars

% o

f buy

ers

who

also

bou

ght b

rand

0

5

10

15

20

25

30

35

40

45

50

Walls Dessert Ben & Jerry's Haagen Dazs Nestle Walls

Carte D'Or Mars

Source: How Brands Grow, Byron Sharp

This graph tells us two things.1. Brands share a far greater average percentage of customers with Carte

D’Or, the market leader, than with Mars, a smaller brand. This is in line with the market share, or overall size, of the two brands.

2. Competitors do not stray far from the average percent of buyers shared with the two brands. Brands sharing customers with Carte D’Or are sharing around 38%, while brands sharing customers with Mars are sharing around 7%.

THE WRAP-UP

What have we learned?1. Mass marketing is more effective than targeted marketing

Light buyers heavily dominate brands’ consumer bases, so targeting them will provide the greatest penetration potential

What have we learned?1. Mass marketing is more effective than targeted marketing

Light buyers heavily dominate brands’ consumer bases, so targeting them will provide the greatest penetration potential

2. Brands share customers in line with their brand size Brand growth lies in increasing market penetration

You can read the full story on how to grow your brand on the Percolate blog: Why Mass Marketing Wins Over Targeted Efforts

Percolate is The System of Record for Marketing. Our technology helps the world's largest and fastest-growing

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Kat Gebert Kat Gebert is on the Product Marketing team at Percolate.