A couple of days ago, I read a fantastic New York Times piece on the weird jargon of Modern Marketing. If you manage to pass their paywall, you can find it here. I recommend it and challenge you to eliminate one word from your marketing vocabulary at the end of this year. Will it be “Snackable content” or “Storytelling” or “Humaning.” I will try to move away from using the word CORE and go back to the more simple BRAND. Before doing that, I wanted to share some ideas on our marketer’s constant struggle to position different line extensions or sub-products in consumers’ minds when at best, they can only remember the master brand.
A typical growth strategy in fast-moving goods is to piggy-bank on a brand name and launch another variant with a twist (a different flavor, smell, better feature(s), etc.). We call that line extension, or more fancy: product innovation. The purpose of this launch is to get some incremental sales or positively cannibalize the current offer at a higher price, or to create something that you can talk about with retailers and with customers. In some categories, not launching innovations is similar to breaking the conversation with your retail partners. They want it for novelty, promotional appeal, and buzz. You want it to drive growth on the core brand variant. In some product categories, the competitive pressure is so high that you can’t avoid playing this game.
But, it’s always better to grow your main product, which I will no longer call CORE as of next year. In general, this is the established proposition that benefits from the scale of the supply chain and its distribution channels. It usually has also a better margin for you as a company. I firmly believe product innovation’s role is to build further the brand equity that will halo on the core – on the brand. It’s hard to acknowledge, but your customers don’t care about your innovation and all the efforts you’ve put into it. They don’t care about your brand, either. They probably are curious to try, but they don’t want to be confused and, in general, want to relate the offer to an existing memory structure.
So how can you launch an innovation that has more chances to grow your brand?
In communication, Make sure the line extension voice belongs to the brand, and you use the brand’s distinctive assets at maximum.
In pricing, be careful with undercutting your current price levels with too much promotional activity or a lower permanent price for your innovation.
Stop believing that your customers will fall in love and/or marry your product innovation. At best, they will think your brand did a cool thing.
Happy to hear your views on using line extensions to grow brands.
The fantastic book “Atomic Habits” by JamesClear changed my life! I vividly remember the dreamlike beach of Ko Poda in Krabi, Thailand, where I dived into it. The book’s key insight was no novelty to me, but James’s storytelling somehow convinced me to change my mindset. To build a habit, you need to do something for 30 days continously, and then it becomes a part of you. What habits can you build as a marketer to be a better version of yourself?
Here are three ideas:
Read a (different) opinion about your area of expertise – I know; we are all busy, we are all swamped in emails and Powerpoint decks, but those who exceed tomorrow are the ones who slowly build their insights in this knowledge economy. Read a blog, follow someone smart on Twitter (like Seth Godin), subscribe to a magazine (could be Harvard Business Review or The Economist – I know it’s not free, but nothing is), select a website (could be The Drum or Marketing Week), or even a Marketing book and read at least 10 minutes every single day. Augment your coffee break with a marketing read, and you will start making better knowledge connections.
Talk to a Customer or at least observe them – I know; it’s difficult to talk to consumers in a social distancing world, but when was the last time you’ve been to the store and observed consumers without being creepy. When did you search for your brand onTwitteror Redditand learn the reactions? When did you last ask yourself a question and answered not from your vantage point but the consumer vantage point? Remember, you are not the consumer. It would be best if you “talked” to them daily.
Learn your Customer’s Media habits – we love our Social Media streams, our YouTube accounts, and our TV bundles. When was the last time you glanced over the usage behavior stats for your target audiences? How much time your customers spend on TikTok, and how much time they watch TV? The numbers from 2015 are different from today, so why not challenge your media agency to show you the data. “Show me the data…daily!”
I challenge you to pick up one of the three ideas or anything else you have always wanted to do and challenge yourself to do it for 30 days in a row. You will discover how the practice slowly grows on you and how it becomes you. And you develop into a better version of yourself.
We love millennials! Millennials are different; they are sharp, open-minded, techy, digital, and the perfect fit for our brand, whatever brand we might own. In digital apps, books, consumer package goods, or alcoholic drinks, millennials are the magic solution to our marketing segmentation. Is this the myth of the last decade in Marketing? One that we fell so quickly into its trap. Because if you work in Marketing, there is a high chance that you are a millennial. Just remember, you are not the consumer.
The next two simple graphs should create an A-HA moment and convince you that the millennial opportunity is not that big. Two significant insights spring to mind: millennials are not the majority (duh), and second, they have the least disposable income to spend.
By targeting millennials, you are consciously deciding to ignore 80% of the population, maybe because you are a Pareto fan. Do you know accurately that 20% of your customers represent 80% of your revenue? Recheck your data. Unless you are active in the business of graduate recruitment or student debt repayment options, I would doubt it.
Second, irrespective of the year, unemployment among millennials was higher than any other age group (that’s in the US, in Europe is even worse). Add to this the limited purchasing power of millennials, and your story starts to have legs. Don’t you think you should broaden your target?
3 simple insights to start your recovery journey:
Understand who buys your category – not just your brand.
Learn about your customers; know the revenue each age-group segment generates.
Study demographic trends for your market; in an aging population world, don’t be blind to your most valuable target group.
The role of a marketing researcher is to help marketers make smarter decisions through an excellent understanding of consumers behaviors and the market context. It is evident to me that the final business decision-maker is the marketer, but on insight generation, she/he should trust the researcher’s experience and let him drive.
As I think of the most significant breakthrough in the advertising creative measurement research practice at Mars, a single change comes to mind: the moment we stopped giving marketing numbers and forced them to decide based on a four stars scale effectiveness rating. You could call it an intelligent traffic light; at each level of the scale, the next action-to-be-executed was crystal clear, with no room for interpretation. Similar to every organizational change, it wasn’t easy, but the new common language and direct actions were transformational for Mars marketers. A decision to restrict access to details fixed.
Why did it work?
Raw data numbers require a deeper understanding of statistics, of variance, of confidence intervals, of probabilities. Most marketers, with all due respect, are not trained to play with those concepts. As a researcher, keep ambiguity of data interpretation on your side, tell them a crystal clear message they can action.
Traffic lights or a star rating scale are simple constructs present in our day to day life. From car traffic control flow to hotel bookings or online ratings, we got trained to read quality scales without too much training. What matters to a marketer is the correct next action: make it binary, make it simple, make it decisive.
A strong endorsement from the CMO is helping. Convince first a senior marketer that can become your spokesman with things that matter to him. Show how meta-analyses are easier to manage, how internal behaviors could be shifted more easily or how positive competition gets triggered between units using a common simple language.
How can you streamline your research to get to the essence?