Effectively managing a marketing budget is a vital component of a marketer’s responsibilities. However, it’s often a domain where wisdom is notably lacking. Decisions on budget allocation tend to be deferred to senior management rather than being made with informed marketing expertise.
Advertising expenditure is an investment in the future growth of a business. This is especially critical for smaller businesses, where there is minimal room for error and budgets are typically constrained. Drawing from decades of experience and research, marketers learn not just how to allocate funds effectively, but also what costly errors to avoid.
This narrative unveils seven marketing missteps that are commonly overlooked, indicating a misallocation of resources and a disregard for the innovative insights that marketing science offers—insights that have the potential to significantly propel growth.
1. Rebranding (or Debranding)
A brand’s recognition is the result of the consistent and prominent display of unique brand elements, which cultivate consumer familiarity [1].
Achieving brand prominence requires substantial and ongoing investment in advertising.
Successful branding resonates with consumers, signaling clearly who the company is and confirming it as their preferred choice.
Rebranding should be approached with caution; it’s akin to a business shutting down and restarting with a new identity, symbolising, perhaps unnecessarily, a new start. Consider Twitter’s transformation, which introduced a completely new face to its audience, a move that could be perceived as an avoidable fresh beginning.
There are instances where a brand’s initial design may fall short, necessitating substantial improvements post competitive analysis. Yet, modifying well-established brand elements that have earned consumer trust is an oversight that often stems from managerial complacency.
When updates to the brand are necessary, they should be evolutionary rather than revolutionary, enhancing recognition and fostering consumer loyalty. Critical brand elements, such as core colors or logos, should be altered with caution.
Consider the case of Freedom Furniture in Australia: the company had a longstanding visual identity but opted for a rebrand that ultimately lessened its uniqueness.
Similarly, Suncorp, a distinguished name in Australian finance, forsook its signature green for yellow during a rebranding, inadvertently diluting its brand presence in a market where a rival, Commbank, is already distinguished by that color.
From these examples, it is clear that brand evolution should be a deliberate process that honors the equity accumulated over time, ensuring any changes enhance the brand’s legacy and consumer rapport.
2. Pricing Promotions
Pricing promotions are a popular tactic to attract new customers and boost sales quickly. They’re also employed to clear out excess stock. Yet, this strategy often leads to a reduction in profits and diverts funds from marketing activities that encourage long-term customer loyalty and profitability [2].
Several flawed assumptions underpin the strategy of using pricing promotions to drum up business:
- Consumers have perfect market knowledge and have compared all available options.
- Price is the paramount attribute for buyers.
- Consumers are always ready and willing to make a purchase.
- Potential buyers are aware of your brand and the promotion you’re offering.
Reality tells a different story. Brand growth and market retention are achieved by being the most accessible and top-of-mind option, because consumers tend to choose brands they remember first and can easily purchase [1].
Buyers typically have a variety of preferred brands and rarely exhibit complete loyalty. This means that while pricing promotions might attract customers temporarily, long-term retention is not assured [4].
There are further risks with under-pricing, such as diminishing the perceived value of your brand and sparking price wars that train consumers to wait for discounts, thus reducing the overall profitability of the market.
A more sustainable, profitable strategy focuses on increasing brand recall and making your product readily available at a reasonable price [1][3].
3. Product Advertising
Product advertising is all about promoting a product (or service). This can be either showing off a new catalogue or selling new features and benefits. Many advertisements happen to be pricing promotions too – how unforgiveable!
The problem with this is it’s not creative and therefore it doesn’t invoke any interest from viewers.
For the ad to perform well (generate more sales), the message needs to be profound. This means two things:
- The message needs to be simple and easy to digest. In many circumstances, you only have a few seconds to impact the viewer.
- To be memorable, a creative advertisement needs to make viewers feel strongly about the message. This means elaboration or artifice is employed, utilising emotion to create a memory linked to the brand.
Here are a few examples of brands that have done the opposite of product advertising.
Pricing promotions and product advertising are often symptoms of an even more sinister underlying sin: performance marketing. This sickness occurs when short term goals like ROI are imposed on (or create) marketers based on a false understanding of how brands grow or that great results are a result of long-term efforts. If short-term results are achieved, it’s definitely at the cost of greater future losses and trade-offs.
Creativity drives interest and interest drives business. As soon as you start “selling”, viewers’ minds switch off. So, don’t go there!
4. Differentiation
Differentiation is a strategy focusing on convincing customers to choose a brand because it’s different or offers something unique compared to others. This approach, popularised by Michael Porter’s books since the 1980s, is still prevalent in tertiary-level business education.
However, the Duplication of Purchase Law contradicts this, showing that brands share buyers in proportion to their market share, meaning larger brands are more commonly chosen [5]. This challenges the idea that differentiation alone leads to success.
A study analysing smartphone purchasing patterns in the UK found that customers of larger brands were more loyal, even when smaller brands offered unique features [6]. Evidence also suggests a low level of perceived differentiation among competing brands [7], emphasising the need for distinctiveness in brand strategy. This involves designing and consistently using brand assets to create unique associations for easier identification.
The sin of focusing solely on differentiation is deadly because it can influence the entire marketing mix in suboptimal ways, potentially limiting appeal to wider market segments and restricting revenue.
The sin of focusing solely on differentiation is deadly because it can influence the entire marketing mix in suboptimal ways, potentially limiting appeal to wider market segments and restricting revenue.
5. Targeting and Niches
Segmentation, targeting, and positioning strategies aim to appeal to demographics expected to be more frequent buyers. Niches take this further, tailoring products or services to very specific segments.
Exclusively targeting buyers based on demographic characteristics observed as buying more can create barriers to reaching other potential customers with different characteristics. This risks losing market share to competitors who adopt a more inclusive marketing approach.
For instance, focusing solely on a target segment defined by specific demographic characteristics means ignoring all other customers outside those parameters. Often, the number of buyers excluded is greater than those targeted.
User profiles for each brand are not unique; consumers buying from a category of competing brands are proportionally similar across demographics. Empirical evidence supports a broader marketing and advertising focus, targeting the wide range of user profiles within a category [8][9]. Therefore, customer profiling (personas) should be approached cautiously, providing only surface-level examples of typical customers across the broad category.
Instead of operating in a niche, the marketing mix should offer attributes and features that appeal to a diverse group of consumers within the category. This involves providing a variety of product variants to cater to different preferences.
6. Loyalty Marketing
Many businesses, particularly well-established ones, invest heavily in loyalty marketing programs to increase sales from their existing customer base. While these programs can be expensive to implement and maintain, their effectiveness in driving growth is often overestimated.
Research suggests that growth is more effectively achieved by broadening a brand’s appeal to a larger customer base, thereby increasing purchase frequency [10]. This is in line with the Law of Double Jeopardy [11], which indicates that larger brands naturally have higher loyalty rates.
Simply satisfying current customers is not a pathway to significant expansion. Successful brands are those that attract a wide range of customers, including those who may initially be less profitable. This approach is akin to a successful election campaign, where the focus is on appealing to a broad electorate rather than just the most loyal supporters.
The goal, therefore, should be to benchmark and maintain inherent loyalty according to the brand’s current size, while primarily focusing on expanding the customer base and enhancing the brand’s universal appeal.
7. Design-Led Marketing
Relying solely on design skills without integrating branding expertise is a common shortfall in the realm of design-led marketing. Many design agencies focus on creating visually appealing artwork but often overlook the critical market research and branding strategy necessary for differentiation.
The ultimate goal of advertising is to make your brand the preferred choice among consumers. To achieve this, your brand needs to be distinct and easily identifiable in the market.
Research shows that brands with relatable characters or personalities resonate more with consumers compared to mere symbols or words. Brand assets’ effectiveness often hinges on their design. Yet, many businesses opt for generic, minimalistic logos, seeking a modern look but missing the opportunity for unique brand representation.
For example, a local coffee shop with inconsistent branding across its logo, colours, merchandise, and signage may struggle to establish a strong identity. In contrast, a chain like Starbucks consistently uses its iconic green colour and mermaid logo across all channels, ensuring instant recognition.
The design of visual assets is crucial; it can either confuse consumers, diminishing the impact of marketing efforts, or foster brand consistency and value, enhancing the effectiveness of advertising investments. Brands seeking growth should not only invest in unique design work but ensure it is part of a comprehensive marketing strategy, guided by branding expertise.
