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5 principles for targeting brand growth

03/10/2017

It is by now a widely-accepted fact that for a brand to grow, it needs to find more buyers. The largest brands in the world attract the most buyers and the fastest growing ones are finding more buyers than the competition. This is true in every category, in every country, even within defined retailers or demographics.

But knowing that, by itself, is not going to grow your brand: it’s time to get specific. How many more buyers do you need to attract to increase your market share and meet your sales target in the short and long term? Where are they going to come from?  And, consequently, what do you need future marketing activity to achieve to grow buyers at the rate required?

1. Understand your target

Creating better category definitions allows you to create actionable buyer targets.  Most brands solve various needs, will come in a range of formats and present us with numerous features. Any one of these could create a different buyer and loyalty structure containing different competitors. You need to understand how your brand is bought and used – and which other brands are chosen in a similar way – to properly define the category that you are competing in.

Once categories are properly defined, they can tell us a lot about a brand’s future growth trajectory. Fundamentally, they reveal how many buyers are going to be required to meet the next quarterly or annual sales target. 

The job of marketing then starts to become clearer – it’s about investing appropriately and in the right activities to be able to attract these extra buyers.

2. Never think advertising, on its own, is the answer

Advertising is vitally important in maintaining the long-term viability of brands — the ability to get people to pay significantly more than a cheaper equivalent, particularly a retailer’s own-brand. These long-term effects also maintain stability – a brand leader this year is likely to be next year’s one as well.         

Good advertising creates overall better conditions for brand growth: affecting the probability that a buyer will notice and recognise a brand when the time comes to buy something. The better a brand is known for needs at an affordable price, the easier it will be for more people to choose it.

These long-term effects are by far the biggest influence on most of next week’s sales, so they need to be consistently invested in. 

But to grow next year, in a measurable and sustainable way, it’s usually not enough to just be more recognisable to more people than ever before.  Taken on its own, this is unlikely to increase your sales significantly.  

To grow consistently every year, activity at the point of purchase must be improved. The ‘mad men’ must connect with the ‘trade men’ to truly succeed.    

3. Be the first thing people see  

Brand growth is predictable.  You’ll sell more when you can be bought in more places. Without more availability – an ever-increasing chance of being bought – it’s unlikely a brand can sustainably grow.    

The goal then is to increase the number of potential first moments of truth, that is; the number of opportunities in which a shopper can see or choose your brand, physically or digitally, in and out of home.  Simply being available to buy in more places will have an immediate and lasting effect on your sales figures. 

Your advertising might be achieving all the objectives set, yet if availability reduces then sales will fall immediately and permanently. The trade men need to leverage the advertising to make sure that the brand is immediately seen when a potential buyer comes looking. 

Most famous brands are already widely available.  But to reach more shoppers, they need to think about dominating the shelf.  This means gaining more space: on their existing shelf, in better positions and other areas of the store.    

If the effects of successful advertising can’t transfer into your brand achieving more availability perhaps your advertising isn’t really working well enough. Marketing plans that connect today’s advertising with retail partner growth plans are essential to grow the brand over short and longer-time horizons.             

4. Leave no need unturned 

Extending the number of products sold – filling the available shelf space up with your brand – is the most practical way to dominate the shelf. Sometimes new products are there to block competitors.  But the best new products offer incremental value to the whole category.       

By understanding how people buy and use your products, and how this might change, you can quantify where potential gaps lie for a brand.  Where there are needs and not solutions.  The solution to the need could be as simple as a different pack format that opens new usage occasions or as complex as adding a new step into an existing routine.

The brands that can create products that either better fulfil existing needs, solve new ones, or preferably do both, to ultimately increase their overall availability in store and attract more people, will be the ones that will grow more significantly in the short and longer-term.  

5. The (big) short and the (not) long of it 

Temporary price promotions, especially when they have additional space positioned away from the normal point of sale, are one certain way of increasing sales in the short-term.  But there is no long-term advantage because although they do attract additional buyers, these buyers will disappear as soon as the price promotion stops. There are no exceptions to this rule it seems.    

Price promotions bring in more buyers, but typically at a lower price and profit margin.  To continue growing sales you will need to keep increasing the force of the promotion to drive more and more ‘temporary’ buyers over time – either by running additional or higher discounts than before.    

In all pricing matters, the competitive context is everything.  If competitors are using price promotions to defend or grow their share, it is unlikely you will be able to grow sales without a similar level of response.   

From a retailer viewpoint, increased sales of a category or brand – whether that is because of a lower price, greater presence, more demand – look the same. They shouldn’t, but they do. Increased sales through price promotions could potentially mean the retailer allows your brand more space on the shelf permanently.  The short-term tactic in this way could result in more sustainable long- term growth.   

Given the fickle nature of the way people buy, try and get all your marketing activity working together.  Bring the brand’s advertising close to the purchase event and the shelf to signal good value – to effectively nullify competitive signals.       

Conclusion

To grow you need to attract more buyers this year than you did last year. To keep doing this year in, year out, brand owners need to identify the categories that their brand is operating in and develop targets for the buyers they need to attract in each of them.

A brand that wants to grow sales will not be able to meet these targets unless it increases its availability at the point of purchase. The part advertising plays in this – making the brand more famous (noticeable and recognisable) – works mainly on maintaining the long-term sales.

Advertising therefore needs to work alongside the sales teams’ negotiations with their retail partners. It will need to create the right conditions to achieve more first time listings, launch new products or even help secure profitable price promotions. 

Without connecting all the pieces together, brands are not maximising the opportunities that advertising gives them.  Understanding the market, you are in to target appropriately and then using all growth levers, strategic and tactical, is how to grow brands sustainably and profitably.

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First published in Admap

To grow you need to attract more buyers this year than you did last year.

To grow you need to attract more buyers this year than you did last year.

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Paul Murphy

Global Analytics and Insight Director

 

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