OPINION: Old-fashioned techniques still most beneficial

Look through the results of the recent Marketing Society Awards and one thing stands out: almost every category winner in the consumer goods sector is a brand that could easily have been left to live out its declining years as a cash cow, feeding company profits until its came to a merciful end.

From Unilever's Pot Noodle and Lynx to Nestle's Quality Street, these brands have history. And they could easily have been left to become history.

Except that their custodians understand the secret of marketing: innovate and advertise.

Bain & Company has figures to back up that assertion. The consultancy has just published the results of a survey of 524 brands across 100 categories carried out from 1997 to 2001, to find what distinguishes winners from losers. It found that 50 of them dramatically and consistently outpaced their counterparts by enjoying annual revenue growth rates of more than 10%, or triple the average.

Writing in the Harvard Business Review, the authors of the study wanted to find out whether it was true that big, old leaders in slow-growth categories find it hard to keep up with nimble, little brands. But that wasn't the case. Not only were almost two-thirds of the winners in slow-growth categories, such as dishwashing detergent, but market leaders, such as L'Oreal in hair colouring, accounted for only a quarter of the winners compared with followers, which made up the rest.

In fact, winners emerged from both high- and low-growth categories and among brands that were new and mature, big and small, premium and value, leaders and followers. So how did these firms manage to grow their brands so well - particularly in a deflationary environment with big retailers squeezing them on pricing?

It was discovered that that raising prices or trying to boost demand with endless promotions wasn't the answer. Instead, the study found two main trends. Brands that had at least 10% of sales in 2001 from products introduced during the four-year period were 60% more likely to be winners.

And this held true despite the maturity or the size of the brand. Innovation of Procter & Gamble's Old Spice, for example, saw the brand grow at 13% a year in a category averaging only 1% annually.

And then there was advertising. Brand winners were 60% more likely to increase their adspend faster than the category average. Or, as the authors put it, it seems that winners were casting back to good, old-fashioned innovation and advertising. So maybe when it comes to marketing the past really is all its cracked up to be.

In the same edition of the journal, University of Ulster professor of marketing Stephen Brown muses that fewer and fewer modern marketing ploys are working.

Every conceivable combination of inclusion(loyalty cards, customer care lines), nostalgia and irony has been attempted to entice marketing-savvy consumers. But the public sees right through all of them. In a marketing-replete world, going back to the good old hard sell is as close to marketing authenticity as firms can get.

After all, consumers know that marketing is about selling stuff. They are rightly weary and sceptical of, as Brown so colourfully puts it, "customer hugathons and brand-bonding brouhaha". They want honesty.

So, two different takes on what makes brands win. But the same basic message. Keep brands fresh and interesting and shout about them. And how old-fashioned is that?


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