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Who buys new brands?

News, 24 February 2016

NEW YORK: New brands should be aware that their earliest customers will be "heavy" category consumers, but also that these shoppers are unlikely to become loyalists over the longer term, according to research from the Ehrenberg-Bass Institute.

Jenni Romaniuk – a Research Professor at the Ehrenberg-Bass Institute for Marketing Science and Executive Editor (International) of the Journal of Advertising Research – distilled the task facing fledgling brands.

"Where might the buyers of a new brand come from?" she asked. (For more, including further tips, read Warc's exclusive report: How to launch a brand successfully: insights from the Ehrenberg-Bass Institute.)

And her response: "Well, luckily, there is actually a very simple and robust answer to that – and that is, they largely or disproportionately come from 'heavy' category buyers."

This confident assertion drew on Romaniuk's work co-authoring the book How Brands Grow Part 2, which drilled down into new product data across multiple categories and countries.

More specifically, by using a product's launch date as a "pivot point", the study analysed purchases made by "light", "medium" and "heavy" category consumers in the first year an item was on sale.

"We've done this for quite a number of launches … and there's one clear, generalisable pattern that comes through," Romaniuk said.

"When you launch a new brand, the people that will buy it – at least in the first year – are going to skew towards the heavy end of the category-buying spectrum."

In terms of marketing, Romaniuk reported, these consumers are not difficult to reach if products achieve the right penetration, as they are frequently in-market and possess a broad brand repertoire.

"This doesn't mean you have to go out and target them; it doesn't mean you have to go out and find them," she said. "They will come to you because of the natural circumstances of the market. Basically, they are the low-hanging fruit."

As such, any initial messages must not only pique the interest of these "heavy" buyers, but also engage the "light" and "medium" counterparts who will be essential in building a brand's longer-term future.

This is because "heavy" category purchasers typically remain promiscuous in their purchase habits, so reaching a larger audience is vital. "A hundred percent loyals, conversely, tend to be light category buyers," added Romaniuk.

Data sourced from Warc