| March 01, 2017
I admit that ‘brand health’ is one of those concepts used in marketing that is often ill-defined. Maybe that is why there are so many conflicting beliefs about it. So in this post I thought I would address three of the most frequent myths that I have heard concerning brand health.
I would define brand health as the degree to which brand associations predispose people to buy a brand and pay the price asked relative to its size and competition, now and into the future. Once in purchasing mode people’s predisposition toward a brand will determine whether they notice the brand, how they respond to incentives and price offers and so on. The ‘relative to its size and competition’ statement is important, because a big brand is not necessarily a healthy brand and in most product categories second best means no sale. And, a really healthy brand does not predispose people to buy a brand now; it encourages them to repeat purchase.
So here are three things I have heard said about brand health that I think are myths:
Brand health and sales should move in parallel
If we accept that brand health is the predisposition toward the brand – something that influences the outcome of each purchase occasion rather than dictating it – then there is no reason why the health and sales should move in lock step. Your brand may be healthy but sales promotion on behalf of a competitor could divert potential customers from buying it. That competitor may have weak brand health but is shoring up sales volume by discounting its price and for some people the discount offered is simply too large to ignore. While some might see a contradiction, I see an opportunity for learning when two different data sets tell us different things.
Brand health only applies to long-term, base sales
No way. Brand associations influence every purchase decision, even if the association is an intuitive ‘that’s the one I bought last time and it was OK’. Even when it is clearly an external variable like the weather that triggers a sale, I am willing to bet that it was the strength and relevance of the brand associations that closed the deal. For more on this check out this post.
Changes in brand health should lead changes in sales
Now this is a tricky one, because in some cases changes in brand health will anticipate changes in sales; particularly for longer-purchase interval product categories or where people are locked into a fixed contract, where a change in predisposition cannot be activated immediately. In other cases, sales may lead to a change in attitudes. For instance, someone might suggest you try a beer you have never heard of before and you discover you like it. Rather than making arbitrary assumptions about which leads or lags, you can either test your hypothesis or simply accept that behavior and attitudes form a virtuous and self-reinforcing circle. Positive attitudes encourage people to buy; positive product experiences lead people to have positive attitudes and so on.
So what do you think about the definition and value of brand health? Please share your thoughts.