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Dr. Maxwell Winchester • Australian, English Canadian.

• Worked internationally in app 30 countries.

• Adjunct Faculty Copenhagen Business School.

• Senior Lecturer Marketing Victoria University.

Top 3 Skills On LinkedIn – Market research.

– Lecturing

– Consumer Behaviour Specialist

Quote by unknown:

“It’s not who you know, it’s who knows you”

#AdvanceYourPotential

You can only compete head on: Differentiation is a fallacy

Dr Maxwell Winchester

Victoria University

The (apparent) importance of STP

• “Segmentation is often the key to developing a sustainable competitive advantage” – pg 26, Aaker & McLoughlin, 2010

Assumptions • Consumers

– Think differently about your brand • (Perception)

– Behave differently toward your brand • (Loyalty)

• Brands are not substitutable

9

Prototypicality

• Attributes of items are prototypical – Brands tend to be

prototypical

– No differentiation on evaluative attributes

– Differentiation on “irrelevant” descriptive attributes

User & non-user response level USERS Bank 1 Bank 2 Bank 3 Bank 4

Up to date with Technology 65 59 67 63

Offers friendly service 49 43 33 48

Responsive 31 36 20 25

Low fees and charges 7 7 8 7

NON-USERS Bank 1 Bank 2 Bank 3 Bank 4

Up to date with Technology 56 48 50 48

Offers friendly service 19 16 15 15

Responsive 11 8 7 8

Low fees and charges 3 4 3 3

Duplication of Purchase in Cola % who also bought…

% used

Diet

Coke Pepsi Coke

Tesco

Cola

Coke

Zero

Asda

Cola

Sains.

Cola

Diet Coke 35 48 44 12 28 9 5

Pepsi 33 52 47 14 26 11 5

Coke 34 45 45 10 21 8 4

Tesco Cola 9 48 50 40 22 22 14

Coke Zero 14 70 61 51 14 9 6

Asda Cola 6 48 55 42 32 20 10

Sains. Cola 4 48 49 41 36 24 18

Average 47 55 41 24 22 18 10

Source: TNS superpanel 2007 Declining duplication as brand size reduces

This is the penetration of each brand

This tells us that 47% of respondents who

drank Pepsi, also drank Coke

Luxury Fashion Brands % who also bought…

% u

sed

Bo

ss

Bu

rberr

y

Pra

da

Giv

en

ch

y

Ken

zo

Ma

rc J

Fen

di

Mo

sch

ino

Ba

len

cia

g

a

Bo

tteg

a

Boss 31 49 46 42 44 31 27 27 12 15

Burberry 30 52 48 38 31 34 32 28 19 16

Prada 24 59 58 43 42 32 40 29 19 14

Givenchy 21 62 54 50 48 33 37 38 22 20

Kenzo 21 66 44 49 49 35 37 37 16 16

Marc J 17 57 60 47 42 31 34 29 26 25

Fendi 15 55 61 63 51 37 37 35 25 24

Moschino 13 65 63 55 61 60 38 41 22 23

Balenciaga 10 39 59 49 48 34 46 39 30 39

Bottega V. 8 57 57 41 53 41 51 45 37 47

Average 19 57 56 50 47 41 36 36 32 23 21

Romaniuk, J. & Sharp, B. (2016) How Brands Grow Part 2: Oxford University Press: Melbourne

Declining duplication as brand size reduces

Don’t take my word for it • Duplicating purchases is NORMAL!

• Prior research has established marketing laws and empirical generalisations can predict what level of retention and attrition is normal:

– Double Jeopardy Law

– Duplication of Purchase Law • Ehrenberg (1993)

• So why would these not apply to your brands?

• Markets include: – Hundreds of FMCG products

• Ehrenberg & Uncles (1995); Dawes (2008), Ehrenberg et al (1990)

– Aviation fuel, petrol, cars • Uncles et al (2002); Colombo et al (2000)

– Medicines and pharmaceuticals • Stern (2002)

– Store chains • Ehrenberg & Uncles (1995)

– Clothing • Dawes (2009)

– Radio and TV programmes and channels • Lees & Wright (2012); Barwise & Ehrenberg

(1998)

– Politics • Ehrenberg (1991)

– Globally

Conclusion

• Brands are not perceived as markedly different

– On things that actually matter

• Customers are shared across brands

– In line with each brand’s respective market share

∴ There is no differentiation!