VOL. 0056 – FLORIDA, WEDNESDAY, MAY 22, 2024
Juan F. Arjona Harry
President & CEO Strategee
For those who have the responsibility to be successful in the management of a brand, the strategies and tactics to implement, go through two types of vectors: one of them is the impact of selective demand, ie strategies, tactics and actions that increase brand sales performance and margin growth obtained from the same market and the displacement of competitors.
Other, are strategies, tactics and actions of the brand, that focus not the market but on the development of what is called primary demand or market development. That is, achieve sales increases for the category driven by actions that makes consumption grown dramatically (this grow for the entire market also benefits competitors).
The interesting thing about this latter group of strategies is that they are precisely the responsible for the rapid growth in demand and therefore sales.
When graphed with the help of two vectors (The "X" axis are the eight drivers of demand and in the "Y" axis are plotted the consumption growth in a category), the growth coming from the intelligent stimulation of some of the drivers of demand can be analyzed. Moreover, sometimes they even leave torpor of maturity to a category, firing it to higher growth.
These Critical Drivers are:
The increase in new Consumer Units due to severe or radical modifications to the product: that is, once identified the inhibitors of purchase, the category leader or challenger by a cross or radical innovation, manage to pass the barrier of the inhibitor, which immediately triggers consumption.
The increase in consumption occasions: by identifying the aspects of consumer time, the leader of a category or challenger, manage to transform the mode of consumption of the category, providing features like the immediacy, portability, miniaturization, simplicity, among some other categorical transformation strategies, creating a new wave of consumption for the category which will settle ever further benefiting the leader.
The increase in the rate of use or consumption: this is when the leader or category challenger -by cross innovation- add an element / ingredient / component / feature or product specific attribute or by stimulating complementary categories, encourages drivers of consumer decision, impacting substantially the rate of use or consumption and therefore demand.
Acceleration in the replacement rate: usually in durable goods, the category leader or challenger, decide the critical factors influencing the value chain or chain-cycle process that at times are inhibitors of demand, radically transforming them to translate them into drivers of purchase decision.
Increases in the rate of the first equipment: ditto the above. Thus enabling the category from a slow growth cycle to a rapid growth cycle. By adopting these strategies, is how radical changes in the rates of consumption are achieved, and as before was said, even a whole category could be potentiated from been in dormancy -in which it is not uncommon to find several leading categories consumption- to achieve a radical growth.