I learned new marketing concept today: repertoire markets. Customers in repertoire markets purchase multiple offerings in a product category consistently; in essence, a repertoire of items, instead of sticking to one brand.
Dr. Corkindale, professor of marketing management at the University South Australia’s International Graduate School Business in Adelaide, cites several studies in an article, “Mistakes Marketers Make” in the Oct 20 issue of The Wall Street Journal, that show consumers claimed to be loyal to one brand, but in fact, bought several different ones during the studies.
For example, “Beer is a common drink among Australian men, and many claim they wouldn’t drink any other than their favorite brand. However, data on actual behavior show that only 10% of these men are loyal to a single brand. This is typical of repertoire markets in the developed world.”
Dr. Corkindale mentioned other studies, such as gasoline, to bolster his point that loyalty to multiple brands within a repertoire is typical and marketers pay dearly for ignoring this reality.
First, they should not assume that loyal customers are the best ones. If the majority of the consumers in a marketplace buy multiple brands, then focusing on the loyal customer, who is often an infrequent purchaser, ignores the majority of the purchasing in the marketplace. For example, one spirit firm found that its most loyal customer segment were older women who bought a bottle every other year.
He mentioned a marketing manager who commissioned a study which found that her brands’ buyers switched to a larger brand more often than that brand’s customers switched to her brand. She initiated a retention advertising program which Dr. Corkindale regarded as a waste of money. Such switching behavior is typical of repertoire markets, he said. He believed that she would have been better served with a campaign focused on obtaining new customers for her brand.
Secondly, he claims that trying to increase frequency of purchase is futile. Purchasers in this type of market will not increase their total spending in response to marketing activities, just as they will not become more loyal.
He also believes that product differentiation is not always needed for success. The Toyota Corolla became extremely popular, not because it was unique in any major characteristic, but because it was overall better than other products in its class. “What most customers want is not more differentiation but products and services that are simply better at providing the routine things they expect when making a purchase.”
Repertoire products are not quite commodities; consumers do have brand preferences, but they are not strong enough to dominate purchase behavior. If I’m having a night out with friends in a bar that does not offer my favorite pint, would I leave them to drink my preferred brand at another joint?
It is possible to create a brand in a commodity market space, Perdue Chicken anyone? But overall, Dr. Corkindale appears to be basing his opinion on tangible product characteristics while minimizing the importance of intangibles, such as service and reliability, in product differentiation. I could care less what my Toyota “Mommy Car” looks like, but I care a lot about its reliability which is to me a key aspect of the Toyota brand.
The professor does have a valid point in saying review the assumptions underlying your marketing programs. They may not be valid in a repertoire market.
Are you in a repertoire market? If so, how do you effectively compete against rivals? The traditional methods may not apply. Examine your own marketing plans vs. those of your key competitors to see which organizations may gain in today’s tough market.