Source Volume From Outside Your Category to Win
It’s a law of marketing seldom discussed, but first popularized by Byron Sharp many years ago. What’s the gist? Well, the evidence shows that consumers with a robust set of brands they’re content within a category are much harder to distract with a new brand than those who don’t consume the category at all. And my research shows it may be even more true in some CPG categories when it comes to attracting large amounts of trial at a premium price point. Really? Yes.
This phenomenon is primarily relevant for lower HH penetration categories like jerky, kombucha, hummus, and fancy night creams. But it can be utilized deliberately by founders growing a brand in almost any category that is amenable to brand development (i.e., NOT paper lunch bags).
What it challenges you to think about is the fact that shoppers in normative categories are very habituated to scanning a limited set of brands at the shelf in retail and searching for them online. They have to develop a strong motive to look elsewhere on the shelf. They acquire that motivation set out-of-store in most cases because outside of the store is where we spend 99.9% of our social time.
By looking at non-category consumers as a significant source of volume, you have eliminated the barrier of ‘existing brand preferences.’ You will be the ONLY brand they consider for an initial period. Moreover, you can utilize both category demand drivers AND unique attribute-outcome signals tied to your brand to attract and defend your consumers. Non-category consumers also have no built-in price assumptions per se. So, they won’t necessarily see themselves as ‘trading up,’ reducing the demotivating effect of a 100% unit price premium. They don’t have an ‘appropriate pricing’ frame you have to battle. The key is that you want to do this for a smaller HH penetration category that is otherwise growing AND shows signs of long-term potential to grow HHs. This can be determined, roughly, with straightforward survey techniques executed within large samples.
Another reason that this has enormous power for emerging CPG brands is that by focusing efforts on bringing new consumers into the category and pulling it off, you will more easily impress category buyers at conventional chains. This is especially true if you’re moving $ volume from less profitable parts of the store to more profitable parts of the store (i.e., from produce to nutrition bars).
I discuss this topic and many others in my upcoming May 7th strategic planning webinar. Join us! About 10 slots left.