“Advertising is therefore acting as a form of ‘unfair competition’…it is unfairly reinforcing buying habits; and…acting as an unreasonable barrier to the new brand.”
Established brands have a head start, as they have already established memory networks in the minds of many potential buyers and have more users who know about them. There is evidence that advertising and usage effects linger for long periods. Prior users are also more likely to notice advertising for brands that they already buy.
New brands have to overcome this mental availability barrier. And, in the heavily cluttered modern world with lots of choice and lots of advertising, this is not an easy thing to do. But, given that repertoire shopping is the norm, combined with near instant loyalty for new brands, this suggests that it is not an unreasonable barrier.
“Very few new brands are actively disliked; the problem is far more often one of indifference.”
The real world of brands is complex, with lots of choice. Shoppers are often time-poor and our brains have limits; we are not perfectly rational, carefully evaluating all alternatives – instead, we are cognitive misers, who ‘satisfice’. Emotions are what people pay attention to and influence the decisions we make.
“Getting a better performance than existing brands and producing a new brand that is radically different from them is a very great deal easier said than done.”
It can be useful to consider brands as mental shortcuts that save shoppers time and mental energy, and advertising facilitates this. The many consumers who buy branded medications – even though chemically equivalent generic substitutes are available at the same stores for much lower prices – are relevant examples of the value of brands to shoppers; it saves them having to think.
“Distribution is clearly shown as vital to success.”
King noted that one of the key determinants of success is good distribution. This has not changed. Recent analysis of 225 new brand introductions across 22 repeat purchase product categories over five years concluded that access to distribution breadth played the greatest role in the success of a new brand, and that investments in distribution and product innovation lead to greater marginal increases in sales for new brands than discounting, feature/ display or advertising. Good physical availability remains fundamental to a successful launch or to defend share in light of a new entrant; this means being accessible to as many potential category buyers as possible, in the range of situations where they may consider a category purchase. However, the power of retailers across the globe such as Walmart, Aldi and Tesco has increased, along with new opportunities for retailers to distribute online from their own websites or the likes of Alibaba, eBay and Amazon. Whatever routes are used to distribute, wide physical availability increases the chance that potential shoppers can access the brand, assuming that a brand is noticed or considered. If a brand is not available, many shoppers will simply default to a competitor.
It has been suggested that “…the Internet has changed the launch process – now companies seed products with influencers, leak information to reporters, bloggers, and consumers, live-stream launch events globally, and reward brand advocates with exclusives. The insatiable 24/7 news cycle and the dominance of social media makes launching a new product far easier in some ways – and more difficult in others.” Clearly, there are some new opportunities, but the established knowledge about how brands compete and grow suggests that, even with these changes, the fundamentals have not changed, and cost-effective and broad mental and physical availability will remain critical.