Brand Growth: A roadmap
There’s a fundamental truth about FMCG brands: the key to growth is attracting more buyers. In other words, increasing penetration, as measured by the number of households buying a brand in one year, is the secret of successful FMCG brands and growing Consumer Reach Points (CRPs).
Kantar Worldpanel’s Brand Footprint has access to panels making up 412,000 households across 35 countries. Experts across the globe have observed consumer and shopper behaviour in relation to over 11,000 brands. Here we focus on four rules for brand growth that contribute to achieving consistently high CRP scores.
Rule 1: Increasing Brand Penetration is pivotal
Penetration is a measure of brand or category popularity. If your brand is popular, says Richard Herbert, Global Insight Director at Europanel, “everything else follows”.
Europanel’s BG20 study of 16 countries in Europe, Asia and the Americas explored 9,000 brands in 79 categories covering foods, beverages, household and personal care. The strong relationship between penetration growth and brand growth is clear, whereas no such correlation exists between frequency and growth. Few of the Top 10 brands in the Global Ranking Top 50 dip below 20% penetration, with the strongest, Colgate, exceeding 60%. This means every brand has room for growth. Of all the growing brands in the world, 75% have grown in penetration.
Set your Penetration Goals
Innovation is a key penetration strategy for Top 50 growing brands. Downy, an outstanding example, increased CRPs last year by 23% with campaigns ensuring mental and physical availability across country and across category. In February 2015 the brand stretched outside the laundry category with the launch of the Unstopable Collection of home scenting products, including air sprays and candles.
Only five brands in the world get close to 100% penetration in their markets – Coca-Cola in Mexico, for example – however the most common brand penetration is below five per cent. So marketers need to be realistic in setting targets and these should be based on growing penetration.
Rule 2: Make your brand accessible to as many shoppers as possible
To win the penetration game, FMCG brands need to be distributed and marketed to as many consumers as possible. Sharp urges brands to ‘refresh and build memory structures’ with mass market advertising that features distinctive yet simple messaging.
The Top 50 brands spend millions of dollars annually on marketing in all its forms – expenditure that gives them a better chance of succeeding in the moment of truth and validate the CRPs they achieve.
Snack brand Lay’s is one of the fastest growing brands in terms of CRPs. Its launches in Italy and Brazil used all the levers to make its brand memorable, from traditional push-marketing (celebrity endorsement by footballer Lionel Messi in TV, outdoor, digital, in-store and on-pack advertising in time with the 2014 FIFA World Cup) to ‘pull’ marketing through a global crowd-sourcing campaign to create new flavours.
Available to Purchase
Coca-Cola, the world’s leading FMCG brand by CRPs, has long made physical availability one of its three core marketing principles. Through global distribution networks and franchise systems, Coca-Cola has lived up to its late president Robert Woodruff’s promise to put Coke’s products “within arm’s reach of desire”.
In Asia’s growing urban centres, distribution assumes even greater marketing significance. Local brand growth comes from concentrating on outlets in lower tier cities where global brands are often not found and boosting brand awareness in store. Chinese toothpaste brand Saky, for instance, has grown by being well-distributed and highly visible on store shelves.
Rule 3: Retain and attract light or occasional buyers
Penetration needs to be earned again and again. Kantar Worldpanel’s historical panel data shows that the vast majority of your brand's buyers will buy your brand once, and that the most common shopper behaviour within the category is not to buy your brand at all. This is largely because in most FMCG categories, consumers have a multitude of brands to choose from.
The majority of a category’s shopper base is light buyers, who are “very important because there are so many of them,” notes Alison Martin, Director of Kantar Worldpanel. Heavy buyers are important too, but chances are there aren’t so many.” While new shoppers come on board, others are lost; the challenge is to achieve a positive balance.
So brand penetration strategies need to focus on increasing the number of light buyers, rather than heavy or core shoppers. This can include targeting new usages, new consumption occasions, expanding equity into new categories, smart sizing or new brands to cover all price ranges.
Rule 4: Your buyers don’t belong to you
Your buyers are another brand’s buyers, who also buy your brand. Kantar Worldpanel data indicates that consumers buy a range of brands in most categories.
This underlines the need for constant buyer recruitment, even for high-penetration brands. A Kantar Worldpanel study of 2,000 brands in France in 2014 found 50% customer churn for each brand examined.
Chocolate spread Nutella is bought by 60% of households in France, but still has to renew a third of its customers every year.
Idriss El Ganari, Knowledge Director at Kantar Worldpanel France, says the reality of customer churn has implications for marketers focused on loyalty programmes. El Ganari explains: “Loyalty can't be efficient because customers don’t come to your brand on a long term basis.”