Ehrenberg-Bass and Byron Sharp made an important contribution: brands grow when they reach more buyers, increase mental and physical availability, and gain penetration.
That is true enough in many repeat-purchase categories. But look at one of the largest recent consumer M&A moves: Mars acquiring Kellanova.
Mars did not spend roughly $36 billion simply to buy more penetration for existing candy brands.
It bought access to a larger demand space: global snacking. Pringles, Cheez-It, Pop-Tarts and Eggo are brands. But the strategic logic of the deal is bigger than the brands. Mars described the deal as a way to help “shape the future of snacking.” That is the point.
Penetration of what? Into which demand space? At what margin? With what pricing power? With what capital requirements? And with what ability to compound economic profit over time?
Penetration is an operating metric inside a market.
It is not a strategy for deciding which markets, categories, demand spaces or business models deserve capital in the first place.
This is where CMOs need to wake up. Do not get stuck in the operating language of awareness, consideration, penetration, DBAs, reach, availability and purchase frequency. Those metrics matter. But they are not the whole job.
The bigger CMO question is: What demand are we trying to capture, create, shift or defend? And can we convert that demand into pricing power, margin, ROIC and compounding economic profit?
A brand can grow penetration and still destroy value.
It can gain buyers in a structurally weak demand space, at low margins, with high spending requirements and poor returns on capital.
The better question is: Where can the company build demand, earn pricing power, improve margins, allocate capital well, and compound economic profit?
Penetration matters. But it is not the destination. It is one mechanism inside a much larger economic system.
If marketers do not define future demand spaces, finance and strategy will.
And then marketing becomes execution again.