In this guest post, Alicia Barker (lead image), a senior marketing scientist at the Ehrenberg-Bass Institute, asks are tiny brands always destined to stay tiny against their much larger competitors…
A commonly held belief is that tiny brands are destined to stay small. Resources are extremely limited, making substantial growth seem more challenging than the average Joe conquering Everest. But just as average Joe can scale a mountain with the right training, tiny brands can climb the growth ladder with the right marketing strategy.
Some marketers claim the answer is differentiation, for the brand to aim to be bigger within a smaller market. But while this sounds plausible, it is quickly unravelled by empirical evidence. Instead, research by the Ehrenberg-Bass Institute shows tiny brands grow by expanding their customer base, and this requires growing a brand’s availability, including Mental Availability.
But how can tiny brands (with finite resources) build Mental Availability?
Differentiate and look the same
The Duplication of Purchase Law tells us that brands share customers in-line with popularity. Most people who visit their local independent coffee shop also visit Starbucks. But few people who visit Starbucks also visit their local independent coffee shop. It is completely normal (and expected) to see customers sharing loyalty across more than one brand in a category and that tiny brand buyers are generally heavy users of the category. If competing brands were truly viewed as different then we wouldn’t see nearly as much customer overlap, and especially not to such a generalisable or predictable extent.
In reality, buyers don’t perceive their brands as different to competitors. For the most part, customers view all other brands in the category as near substitutes irrespective of the positioning or marketing strategies. Both the local independent coffee shop and Starbucks sell coffee, food and have a place to sit. One is just much more accessible, for many more people, than the other.
Don’t get me wrong though, differentiation does exist! Some brands really are different. Although by that I mean functionally different in terms of products or services offered rather than a perceived difference created through advertising. For example, one of my favourite local independent cafes offers a 100% vegan menu. They still serve coffee, food and have a place to sit, but they also have a clear point of difference. Though even here, this difference is only important to some of their buyers. For most, it’s their sameness with other brands (e.g., they serve coffee) that matters.
Do factor any inherent differences into your marketing strategy*. But remember that customers aren’t that convinced or concerned if brands are different. They will naturally buy the brands they remember and can find when needed.
So, good news, you don’t need to worry about making your tiny brand different to grow! Your advertising should instead aim to build Mental Availability to remind people the brand exists when they are entering the category. Think ‘Hey, we’re here, we’re good, give us a try!’ rather than ‘We are different from other brands, this is why you should buy us!’.
But this is challenging for a tiny brand with a small marketing budget. While Starbucks can launch an international TV campaign, your local independent coffee shop might just afford a local radio commercial. So how do you allocate the advertising budget you have wisely?
Spending money to make memories
The good news is there’s no minimum advertising budget needed to be effective. Every single exposure with good creative and branding is sufficient to nudge buying propensities of people exposed. This means all brands can implement strategies that build Mental Availability. The only difference is that tiny brands will have far fewer executions and less freedom to make mistakes. So, knowing what to advertise is crucial.
All brands, regardless of size, may benefit from building Category Entry Point (CEP) associations. These are the thoughts people have as they transition into category buyers (e.g., buying coffee To wake up); and can be ‘linked’ with brands in memory to increase the chances the brand is remembered at the point of entry (e.g., buying Starbucks coffee To wake up).
Generally, when building CEPs, we recommend communicating one message per advertisement so it’s as easy as possible for category buyers to form memory structures between the brand and CEP. Then overtime, different pieces of communication can message different occasions, to get more people thinking of the brand in more buying/usage situations. But this does mean tiny brands (with fewer executions) may be capped in the number of CEPs they can effectively build, at least until the advertising budget grows. So, selecting the best CEPs for the job is essential.
Beware of selecting an esoteric CEP that won’t resonate with a big audience. The more people that encounter the selected CEP, the more chances they have of eventually buying your brand. For coffee, this could be messaging As a pick-me up rather than While on a road trip. Also beware of selecting a CEP that isn’t credible for your brand. There’s no point in building memory associations for something the brand doesn’t (or can’t) offer. For example, the local independent café messaging Something for everyone if they in fact only sell black coffee.
In conjunction with CEPs, advertising ought to feature prominent and consistent branding.
Without it, buyers (most of whom don’t know you exist) might mistake your ad for a larger competitor. We need them to correctly link the message to your brand. This is achieved by building Distinctive Assets (DAs), which are logos, colours, characters etc. that signal your brand without needing to show the name (e.g., the iconic Starbucks siren logo). The budget does limit opportunities, so consider investing in a single DA (like a logo) until it grows in Fame and Uniqueness. Then, as for CEPs, more assets can be added to the DA palette over time as the brand grows.
So, while it may seem impossible to grow tiny brands without differentiation, don’t try too hard to be different. Instead focus on telling people you exist and making it as easy for them to remember you as possible. Brands that are thought of, and found, are more likely to be bought… even if they’re small!
*Note even highly differentiated brands need to build Distinctive Assets as a line of defence against competitors. Short-term strategies can message brand differences, but long-term strategies should focus on Distinctiveness and CEPs.
