International Journal of Market Research Vol.

52 Issue 4

FORUM Do growing brands win younger consumers?

Katherine Anderson and Byron Sharp
Ehrenberg-Bass Institute for Marketing Science at the University of South Australia

Are young consumers easier to attract? We shed some light on the presumption that younger consumers are less loyal to brands and more willing than older consumers to try new brands. Analysis of 230 brands from 12 categories revealed a tendency for new and growing brands to skew towards younger consumers. This suggests that younger consumers are slightly easier for brands to attract. The most plausible explanation is that younger consumers are more likely to be new buyers of the category. We therefore caution that our results do not support a marketing strategy strongly targeting younger consumers. If a brand grows, then it is likely to attract a slightly disproportionate number of younger consumers. However, it does not follow that, if it seeks largely to attract younger consumers, it will grow.

Introduction and background

Are young consumers more willing to try different brands? Are they easier targets if you are trying to grow your brand? A colleague in industry had noticed that spirits brands that were growing strongly, like Patron and Grey Goose (UK 2006 data), tended to over-index among younger consumers, while those that were declining tended to over-index among older consumers. We were curious whether this pattern was evident in purchase data from other categories and what plausible explanations there might be. We were particularly intrigued by this pattern because research by Ehrenberg and colleagues has demonstrated that such deviations are uncommon, with rival brands tending to sell to similar types of consumer
Received (in revised form): 21 October 2009

2010 The Market Research Society DOI: 10.2501/S1470785309201387

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(Hammond et al. 1996; Kennedy & Ehrenberg 2000a, 2000b, 2001a, 2001b; Ehrenberg & Kennedy 2000; Kennedy et al. 2000). However, it seemed plausible that, within the small deviations that do exist between rival brands,1 a systematic pattern might be evident.

Research approach
We analysed purchase data for 230 brands across 12 product categories, looking for a systematic pattern in the data. Categories included coffee, bar confectionery, dog food, beer, spirits, cars, internet service provider, mobile phone provider, health insurance, car insurance, credit cards and financial services. Some of these categories grew, and some declined over the period studied, providing a robust sample. The data were generously provided by the Nielsen Company and TNS. The Nielsen Panorama Survey data described claimed purchase behaviour (penetration) in the Australian market for 2001 and 2006. The TNS Superpanel data described actual purchasing behaviour (volume) in the UK market for 2005 and 2007. By comparing two periods of data, we were able to determine which brands grew (relative to the category), which declined (relative to the category) and which were new to the category, and investigate whether the user profiles of these brands were systematically different. From the raw purchase data (2006/7), the proportion of each brands sales/customers from each age group was calculated the brands age profile. The profile of each brand was compared to the age profile for that product category. The proportion of users younger than 30 for each brand was plotted against brand performance (new brands were assigned a growth rate of 100% for the period). The axis intercepts were calibrated against the categorys performance and user profile (see Figure 1), dividing the scatter plot into quadrants of older and growing, youthful and growing, youthful and declining, and older and declining. The proportion of brand users older than 55 was plotted in the same way for each category. These category charts provided a broad snapshot of the patterns in the data. To quantify how well a brand performed in each age group, index numbers were calculated using the product category profile as the base. The index numbers for each brand were independently assessed by both authors. Brands that skewed towards younger or older consumers were identified and counted. Age was considered in relative rather than absolute
Ehrenberg and Kennedy had previously noted a few systematic differences, e.g. childrens brands skew towards children, Scottish newspapers have more Scottish readers (Kennedy & Ehrenberg 2000a).
1

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terms (i.e. younger not young) as the absolute age of new category buyers is dependent on the category, e.g. consumers enter the beer category decades before they enter the market for high-cholesterol margarine. Also, brands that skewed towards a particular age group because of obvious functional differences, like Kinder Surprise or Australian Pensioners Insurance Agency, were removed. The remaining 230 brands were divided into three groups new, growing and declining and patterns within and across each group were identified by the authors.

Results
Figure 1 and Table 1 show the results from one category, coffee. Figure 1 illustrates the relationship between customer base growth and a brands user profile. In the coffee category, new and growing brands tended to have more youthful user profiles, as demonstrated by the clustering of data points in the top-right quadrant. Four of the six brands that grew more than the category between 2001 and 2006 also had more users under the age of 30 than the category. Declining brands tended to have fewer younger users, as demonstrated by the clustering of data points in the bottom-right quadrant. Eight of the ten brands that declined over this
100 Growth % 20016 80 60 40 20 0 20 Older 0 5 Proportion of brand users 1429 years old 10 15 40 20 60 80 R2 = 0.55099 100 Declining 25 30 Youthful 35 Growing

Figure 1 User pro le of co ee brands vs performance (2006)

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Table 1 User profile of coffee brands

Age groups (years old) Change 20016 (%) 37 3 100 100 100 100 100 100 100 100 100 10 7 10 9 11 9 10 9 6 100 515 1599 1179 1674 1591 1865 1584 1657 1513 1005 14 17 18 24 25 29 30 34 35 39 40 44 45 49 50 54 55 59 60 64 65+ 2603 16 100

Category

New

Growing

Declining

436 Users 2006 (000s) 16,475 100 100 26,216 Users 2006 (000s) Change 20016 (%) Brand profiles index numbers 106 99 130 92 93 126 113 114 96 122 81 75 65 87 150 73 156 52 40 80 95 102 68 109 134 94 110 67 67 93 81 96 117 78 84 91 81 102 111 121 102 85 98 81 101 86 96 105 99 90 54 101 86 99 145 109 111 102 131 81 101 104 94 64 75 100 101 166 101 97 109 118 104 87 112 115 94 97 89 71 91 86 111 104 78 73 88 270 126 75 56 78 87 34 67 79 137 116 109 70 91 128 94 85 53 103 74 80 86 115 166 177 82 76 95 107 108 112 112 117 110 93 89 56 57 102 121 146 74 60 94 97 110 104 101 151 101 101 97 107 89 101 138 129 108 69 96 90 91 100 99 121 130 88 115 113 100 116 152 127 112 35 100 59 73 94 96 102 138 136 69 158 120 145 130 91 8 8 11 32 42 52 57 62 70 70 72 72 77 78 432 241 6714 1130 1215 2295 559 579 681 1192 262 310 300 417 209 249 0 0 6240 1225 1368 3364 959 1210 1598 3098 867 1035 1058 1490 892 1120

Category

Users 2001 (000s)

Buyers

Profile (%)

Index base

Brands

Users 2001 (000s)

Riva

Piazza DOro

Nescaf

Lavazza

Forum: Do growing brands win younger consumers?

Vittoria

Moccona

Robert Timms

Harris

Maxwell House

International restaurant

Caf Aurora

Supermarket

Jarrah

Bushells

Melitta

Andronicus

* Users denotes the projected number of category/brand users in Australia based on a sample of n ~ 20,000

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period had fewer users under the age of 30 than the category. The inverse pattern was evident when the proportion of brand users older than 55 was plotted; declining brands tended to have more older users and growing brands tended to have fewer (results not shown). Similarly, as Table 1 details, both the new-to-market brands, Riva and Piazza DOro, skew towards young consumers index numbers across the younger age groups are greater than 100. Similarly, growing brands tend to over-index among consumers younger than 45, the median age of buyers of this category. This skew is more pronounced for brands that grew particularly strongly, like Nescaf and Lavazza. Furthermore, as expected, many of the declining brands over-index among older consumers. While there are some exceptions, such as Caf Aurora, the overall pattern was for new and growing brands to over-index among younger consumers and declining brands to over-index among older consumers, as highlighted by the bold numbers in Table 1. The same procedure was repeated across the other 11 product categories, the results of which are summarised in Table 2. Across the 12 product categories, the new-to-market brands were most likely to skew towards younger consumers (3 to 1 more likely to skew younger than older). Growing brands were also more likely to skew towards younger consumers. In complete contrast, declining brands were more likely to skew towards older consumers. The presence of younger customers appears to be an indicator of brand health, with declining brands tending to have a disproportionate number of older customers and lack of younger customers.
Table 2 Pattern of age skews across 12 categories
Skewed towards Younger consumers Middle-aged consumers Older consumers No skew Total New brands n = 69 (%) 48 7 15 33 100 Growing brands n = 96 (%) 34 15 24 23 100 Declining brands n = 94 (%) 19 14 30 31 100

Discussion
Pervious research has established that brand growth (and decline) is largely driven by customer acquisition (Riebe 2003). Our finding, that growing

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brands tend to skew towards younger consumers, indicates that younger consumers are slightly more easily acquired. A plausible explanation for our results is that younger buyers account for a disproportionate percentage of those consumers that are available for brands to acquire. Younger consumers are more likely to be new category buyers adopting brands as they establish a repertoire, and therefore represent a disproportionate amount of the consumers available for a brand to acquire. Consequently, younger consumers are more easily attracted, in comparison to older consumers who buy new brands less often because they already have an established repertoire of brands from which they tend to buy. Following Riebes findings, declining brands, which are failing to win many new customers, are not replenishing their customer base with the younger customers needed to offset the ageing of their existing customers, and consequently their brand profile gradually begins to skew older. An alternative, perhaps more salient, interpretation is that young people, by virtue of their youth are less loyal. There is a widespread belief among marketing practitioners that young people are fickle and hence less loyal to brands. For example, Young & Rubicams Simon Silvester contends that, when consumers are young they relish new experiences, are promiscuous in their brand buying and responsive to new ideas, but that as consumers grow older their buying habits ossify and their brand repertoires become fixed (Silvester 2002, 2003). However, our results do not lend credence to this, widely spread, speculation. Across the 12 categories, only 48% of new-to-market brands skewed towards young people, a far lower proportion than would be expected if young people really were more fickle and willing to experiment. Furthermore, new and growing brands tended to skew towards younger buyers, but not necessarily young it depended on when consumers were likely to be entering the category or considering new product varieties. So, for low-cholesterol spreads, growing brands over-index among younger consumers, meaning those aged 4564 years old. It might be easier to attract consumers who are younger than the average buyer of your category, but they may not necessarily be young per se. As for the notion of older consumers being unwilling to try new brands, our results show that this is an exaggeration. None of the skews was extreme and, besides, of the 69 new brands we analysed, 1 in 7 of them skewed towards older demographics, highlighting that older consumers do purchase new brands and that the brand loyalties of older consumers are not completely entrenched. Furthermore, as Table 2 illustrates, 33% of new brands did not skew to any particular age group, instead acquiring

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a normal amount of young, middle-aged and old consumers. This is particularly notable as, in most categories, consumers 55-plus account for about 30% of buyers, so a new brand had to acquire quite a few older consumers for it to have even a normal age profile. These results cast doubt on the conventional wisdom that, soon after reaching middle age, consumers fix their brand repertoires and rarely consider new brands. While about two-thirds of brands we studied showed an age skew, it is important to note that these skews were generally small, especially once put into the context of the brands age profile. Take, for example, Nescaf in Table 1, which skewed towards younger consumers. Nescaf has more customers aged 1417 than expected, as signified by the index number of 126. But a mere 3.9% of its customers fall into this demographic, which is only slightly more than would be expected given that 3.1% of category buyers are 1618 years old. As for the other 96.1% of Nescafs customers, they come from all age groups. Consistent with past findings, the dominant pattern in user-profile results is that customer profiles of competing brands are very similar (Hammond et al. 1996; Ehrenberg & Kennedy 2000; Kennedy et al. 2000; Kennedy & Ehrenberg 2000a, 2000b, 2001b). The patterns in the data suggest that young consumers are slightly easier to attract. Not because they are innately less loyal, but because they account for a disproportionate percentage of the consumers available for a brand to acquire in any given year. However, one limitation of our aggregate-level research is that we cant prove this directly. We cant track the behaviour of individuals and see what proportion of category buyers are new to the category, or what proportion of these new category buyers are younger. Further research to confirm our assumptions would be valuable, although we recognise the great difficulties in conducting such research empirically.

Conclusions
Our research indicates that younger consumers are slightly easier for brands to attract. We believe this is because they are more likely to be new to the product category and not yet the established customers of other brands. Younger consumers are more likely to be new to the category and adopting brands to develop a repertoire, so they probably account for a disproportionate percentage of the consumers available for a brand to acquire. This matters because brand growth depends so heavily on acquisition.

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The results underscore that brand loyalty is alive and well its not easy to change the habitual loyalties of buyers and win them over from other brands, but it is possible. The brand loyalties of older consumers are not completely entrenched or unchangeable. While young consumers may be slightly easier to win as customers, it is difficult for a brand to grow, and near impossible for it to be a big brand without selling to consumers from all age groups.

Implications for strategy

Growing brands should expect that a disproportionate percentage of their new customers will be young, or rather younger than their existing customers. But whether marketers ought to skew their advertising, distribution and sales efforts to younger consumers is an entirely different matter. For new brands that are under time and budgetary pressure to prove their commercial viability, it makes sense to go for the easier targets at least at first. And, for established brands, its important to reach younger consumers who are learning about brands. But we would caution marketers against targeting younger consumers exclusively. Brands that successfully grow are likely to have a base of somewhat younger customers, but this does not mean that targeting younger consumers is the path to growth. No marketing or media strategy should deviate much from the demographic groups that deliver most of the category sales volume.

Acknowledgments
We acknowledge Andrew Barnett of Highland Distillers (UK), whose work inspired this study.

References
Ehrenberg, A.S.C. & Kennedy, R. (2000) Users of competitive brands seldom differ. Paper presented at the Market Research Society Conference, Brighton, UK, 1517 March. Hammond, K., Ehrenberg, A.S.C. & Goodhardt, G.J. (1996) Market segmentation for competitive brands. European Journal of Marketing, 30, 12, pp. 3949. Kennedy, R. & Ehrenberg, A. (2000a) Brand user profiles seldom differ (Research Report No.7). Adelaide: Ehrenberg-Bass Institute for Marketing Science. Kennedy, R. & Ehrenberg, A. (2000b) The customer profiles of competing brands. Paper presented at the 29th European Marketing Academy Conference, Rotterdam. Erasmus University, 2326 May. Kennedy, R. & Ehrenberg, A. (2001a) Competing retailers generally have the same sorts of shoppers. Journal of Marketing Communications, 7, Special Retail Edition, pp. 18.

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Kennedy, R. & Ehrenberg, A. (2001b) There is no brand segmentation. Marketing Insights, Marketing Research, 13, 1, Spring, pp. 47. Kennedy, R., Ehrenberg, A. & Long, S. (2000) Competitive brands user-profiles hardly differ. Paper presented at the Market Research Society Conference, Brighton, UK, 1517 March. Riebe, E. (2003) Normal rates of defection and acquisition and their relationship to market share change. Unpublished PhD, University of South Australia, Adelaide. Silvester, S. (2002) Youre getting old. Admap, 433, pp. 2931. Silvester, S. (2003) The ageing populations threat to innovation. Market Leader, Autumn, 22, pp. 4149.

About the authors

Katherine Anderson is a research associate at the Ehrenberg-Bass Institute for Marketing Science at the University of South Australia, Australia. Byron Sharp is Professor of Marketing Science and director of the Ehrenberg-Bass Institute for Marketing Science at the University of South Australia, Australia. Address correspondence to: Katherine Anderson, Ehrenberg-Bass Institute, University of South Australia, North Terrace, Adelaide SA 5000, GPO Box 2471, Adelaide SA 5001. Email: Katherine.Anderson@UniSA.edu.au

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