Promotion-heavy communication raises price sensitivity; balanced brand building lowers it
PrincipleBrand Strategy
Marketing communication can significantly improve price elasticity, but an excessive focus on promotional messaging does the opposite. Moving away from promotion-heavy communication toward balanced brand building can reduce price elasticity by up to 20% in the long run.
Source
The Effectiveness Equation - Google Market Insights EMEA, with Kantar, Nielsen, Ekimetrics, Ipsos MMA, the Behavioural Architects and WARC (2025)
Michal Protasiuk, Ahmet Bas, Jonas Christensen, Vanessa Bruns, Emily Allen and Jonny Protheroe (Google Market Insights, EMEA)
p. 47, The Effectiveness Equation (2025), Kantar Worldpanel/GfK Data, UK and DE, Jan 2021-July 2024
Go to the originalMore from this source
PrincipleMarketing measures itself on only one side of the profit equationStatMost organisations have no agreed definition of what marketing effectiveness meansStatBrands with pricing power command roughly twice the price of brands without itStatPricing power comes from meaningful difference, not from salienceCaseA UK skincare brand turned a 2% revenue increase into 7% by lowering its price elasticity firstStatPricing power and resistance to price rises correlate strongly and measurablyStatHalf of advertising's sales effect arrives after the fourth monthStatMedia returns peak with roughly half to sixty per cent of the budget in brand buildingStatRaising brand awareness lifts short-term sales as well as long-term onesWarningWinning back share costs nearly twice what cutting the budget savedWarningEvery dark quarter costs future revenue that takes years to rebuildWarningShifting a shrinking budget into performance can destroy the returns performance depends on