When brands communicate, big or small, they are all trying to be heard in a competitive, always-on environment. Amidst the constant noise, customers form opinions and perceptions about what they see and hear. Are they targeting me correctly? Is the content relevant? Am I curious? Will I explore further and look for more? Given the competition, it’s sometimes pure chance that a brand gets discovered, and if the experience is good, chances are the customer will become a regular and start to build a sense of loyalty.
Where it becomes interesting is when a small brand decides to take on the bigger brands and aims to increase market share. John Phillip Jones from Harvard discovered an almost perfect correlation exists between “share of market” and “share of voice”. Generally speaking, if you have 5% market share, you’ve probably got 5% share of voice. All things being equal, if a brand underspends on their share of voice, it will inevitably lead to a decrease in market share. However, when brands overspend on share of voice, a term “excess share of voice” comes into play, eventually leading to an increase in market share (again, all things being equal).
For smaller brands, they usually need to overspend on share of voice to maintain or grow their market share, whereas bigger brands can sometimes get away with a lower spend on share of voice but still manage to maintain their market share. The reason for this is that in order to get the best bang for your buck in terms of a return on advertising investment, two key factors come into play: excellence of creative execution, and brand size. This might be daunting for smaller brands, but if you’ve got the right strategy locked in and communication that shapes the desired perceptions for new or existing clients, you can grow your market share against the big players.
Mark Ritson gives a brilliant demonstration of the above relationship and shows how the brand Lidl took on the supermarket giants in the UK and increased their market share in a saturated market through image-changing campaigns backed by an increased investment in share of voice.
Aldi’s positioning as “Good different” in Australia has similarly enabled them to carve out a unique space against the major players, and with their investment in communication dollars growing all the time, their market share has risen accordingly and reached 11% in 2018 according to Roy Morgan research. Having also achieved the highest level of “emotional connection” with shoppers, and growing at three times faster than its rivals, the rise of Aldi looms as a major threat to the established duopoly of Coles and Woolworths.
Source: smh.com.au
