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Warren Buffett’s concept of “share of mind” refers to the idea that a company can gain a significant competitive advantage by occupying a prominent position in the minds of consumers, investors, and other stakeholders. This concept is closely related to the more traditional marketing term “share of voice,” which refers to a company’s share of the total advertising or marketing messages in a particular market.
However, Buffett’s concept of share of mind is broader than just advertising and marketing. It encompasses a range of factors that influence how people perceive and think about a company, including its reputation, brand, products or services, management team, financial performance, and other intangible factors.
Buffett believes that companies with a strong share of mind are able to build durable competitive advantages that can lead to sustained success over the long term. By occupying a prominent position in the minds of stakeholders, these companies are able to attract customers, retain employees, and build investor confidence, which can translate into higher sales, profits, and stock prices.
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Wall streets make money on activities, we, as value investors, make money on inactivities.
Coca Cola
To illustrate this concept, let’s take the example of Coca-Cola. Coca-Cola is a company that has been able to build a strong share of mind over many decades. When most people think of soft drinks, they immediately think of Coca-Cola. This is due in part to the company’s massive advertising budget, which has helped to reinforce its brand and message in the minds of consumers.
But Coca-Cola’s share of mind goes beyond just advertising. The company has also built a reputation for quality, reliability, and innovation, which has helped to maintain its dominance in the soft drink market despite intense competition from rivals like PepsiCo. Coca-Cola’s management team is highly respected and has been able to navigate a range of challenges over the years, including changing consumer tastes, health concerns, and regulatory pressures.
All of these factors have helped Coca-Cola to build a strong share of mind that has enabled it to maintain its position as one of the world’s most valuable and successful brands. By focusing on building a strong share of mind, Buffett believes that companies can create sustainable competitive advantages that can deliver significant value to shareholders over the long term.
Looking at examples of high mindshare in other industries, I believe when people think of smartphones, they think of Apple. Many have experienced switching from a non-Apple phone to an Apple phone, realizing how user-friendly and intuitive a phone can be, and as a result, they almost never switch back to non-Apple phones in the future.
Disney
When people think of theme parks, they think of Disney, along with its widely recognized cartoons that hold a special place in every child’s memories, and Marvel’s many heroes that embody the fantasies of both men and women.
1. Emotional Connection:
Disney is not just a company; it’s a brand that evokes deep emotions. People often associate it with childhood memories, happiness, and magic. Families have trusted Disney for generations, making it more than just an entertainment provider. This emotional bond is a prime example of how Disney captures a large share of mind—consumers think of Disney when they want wholesome entertainment.
2. Strong Brand Identity:
Disney’s iconic characters like Mickey Mouse, the Disney princesses, and their theme parks are deeply embedded in pop culture. This means that when people think about family entertainment, vacations, or animated films, Disney often comes to mind first. Their strong and consistent brand identity creates share of mind by dominating consumer perceptions in these areas.
3. Customer Loyalty:
People repeatedly return to Disney’s products—be it movies, merchandise, or theme parks—because they associate the brand with quality and emotional satisfaction. Disney doesn’t just capture market share; it holds a share of mind through its ability to keep consumers thinking about and preferring Disney products over competitors. This mental hold drives long-term loyalty, which leads to enduring profitability.
4. Diversified Portfolio:
Disney has extended its brand across various platforms: movies (Pixar, Marvel, Star Wars), TV (ABC, ESPN), theme parks, streaming (Disney+), and merchandise. Through this, Disney stays top-of-mind in different aspects of consumers’ lives, ensuring it has a broad and deep share of mind across multiple entertainment sectors.
Buffett’s investment philosophy values companies like Disney, which maintain a high share of mind because such companies are more likely to have durable competitive advantages and lasting consumer demand.
The conclusion is that whether managing products or selecting companies to invest in, choosing companies with high mindshare is a great strategy.”
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