2003-10-05-Bain-The_keys_to_growing_brands_1页_106kb

The Keys to Growing Brands: A Summary

Core Content

A recent global study conducted over four years, analyzing 524 brands across 100 categories, reveals that traditional indicators such as brand size, newness, or category leadership are not reliable predictors of brand growth. Instead, the study identifies product innovation and advertising investment as the key drivers of growth, particularly in categories with low or flat demand.

Main Findings

• Brand Growth vs. Category Growth: On average, brands grow at about 3% annually, matching GDP growth. However, a select group of 90 "brand winners" achieved an average growth rate exceeding 10%.
• Winners Across Categories: These high-growth brands were not limited to fast-growing categories like bottled water or frozen meals. Two-thirds of them came from categories with slower growth, such as dish detergent, which grew at less than 3% annually.
• Product Innovation: Brands that derived at least 10% of their 2001 sales from products introduced during the study period were 50% more likely to be among the winners. Innovation was not restricted to new brands; even mature brands like Old Spice achieved growth through product repositioning and formula changes.
• Advertising Spend: Winners were 60% more likely to increase their advertising spend faster than the category average. This suggests that effective advertising plays a critical role in amplifying the impact of innovation.
• Pricing Strategy: Traditional methods such as raising prices or using trade promotions were not effective in driving growth in a deflationary market. Instead, innovative pricing strategies, such as introducing smaller, premium-priced products, proved more successful.

Key Examples

• Old Spice (Procter & Gamble): Despite being over 50 years old, Old Spice achieved significant growth through repositioning. The introduction of High Endurance (1994) and Red Zone (1999) targeted younger male consumers and contributed over 75% of deodorant sales in 2001.
• Ball Park Franks: This brand used packaging innovation to reinvigorate its market position. The introduction of individually wrapped, microwaveable "Singles" allowed it to compete with Oscar Mayer. The product represented 10% of Ball Park's sales in 1999 and grew to a $31 million business by 2001, supported by a $12 million advertising campaign featuring Michael Jordan.

Key Insights

• Innovation is Universal: Innovation is not confined to specific categories. It can be applied across all industries, even in those perceived as saturated or "innovation-proof."
• Strategic Pricing: Innovating around pricing—such as introducing premium-priced, smaller versions of existing products—can stimulate demand and growth.
• Advertising as a Catalyst: Advertising is not just a support function but a strategic lever that can amplify the impact of product innovation.
• Growth Through Core Innovation: Brands that innovate around their core offerings and effectively communicate these changes through advertising are more likely to achieve sustained growth.

Conclusion

The study underscores that brand growth is not dependent on category dynamics or brand age, but rather on strategic product innovation and aggressive advertising investment. Brands that focus on these two elements, even in slow-growth categories, can unlock significant growth potential. This approach challenges conventional marketing wisdom and highlights the importance of continuous innovation and clear communication in driving brand success.