Let’s start with a quick game of Blankety Blank.
If you’re over 40, think of Terry Wogan asking the question with his microphone like a magic wand. If you’re under 40, google “Blankety Blank”. If you’re under 30 you might need to google “Terry Wogan”.
Right - fill in the blank in the following sentence…
“The lost art of ___________”.
Maybe you went with “conversation”? Thinking of all the times you’ve seen people sitting together, all on their phones.
Maybe you went with “spelling”? Thinking about some of the WhatsApp messages you receive.
Maybe you went with “tolerance”. Thinking about the last time you scrolled through Twitter.
However you filled in the blank, you would have gone through the same thought process as everyone else.
Think “the lost art of…” and you think about something that used to happen. Something that we used to take for granted. That has gradually eroded over time. That you talk wistfully about down the pub. That’s if we weren’t all on our phones down the pub these days.
Why are we talking about this? Well, in our industry, we’d fill in the “lost art of…” blank with “category development”.
It used to be something that companies focused on as a matter of course. If only 25% of households bought your category, you were focused on making the pie bigger. You thought category growth first. Then trusted that your brand would benefit (often disproportionately) if you drove that growth.
But then many categories matured. When you have 80%+ penetration, you can’t immediately see the category growth opportunity. Then competition in most categories increased. Other brands came in. Start-ups came in. Private label became more competitive.
You started thinking less about a bigger pie and more about your slice of it. You promote more. Then a bit more. And a bit more. You launch a line extension. Then another. Then another. Things that are about winning share – increasing your slice of the pie. Not things that grow the category - leading to a bigger pie.
That is the lost art of category development.
So, how can you get this back?
Category development is based on behaviour change. Identifying the changes in shopper behaviour that will lead to a bigger pie. All category development is based on the same principles.
Penetration. Getting more shoppers to start buying a category. If you are in the incontinence category, you could focus on your slice of the pie. Getting current shoppers to buy your brand instead of the competitor brand. Or you could focus on a bigger pie. Encouraging more people who experience the issue (quite a lot) to buy a purpose made product (not many do). The short-term opportunity is in your slice. The long-term opportunity is in growing the pie.
If you are in the frozen category, you could focus on your slice. Growing share in a (pre COVID) declining category. Or you could focus on growing the pie. Reinforcing the reasons to buy frozen food. The things brands (Birds Eye) and retailers (M&S, Aldi) have been doing to address quality perceptions (“freshness & flavour locked in”) and reinforce strengths (“no waste – only use what you need, freeze the rest”) are great examples of this.
Frequency. Getting current category shoppers to buy more often. If you are in the oral care category you could focus on your slice. Trying to win the toothbrush sale when shoppers are next ready to buy one – which might be a long time away. Or you could focus on growing the pie. Getting more shoppers to change their toothbrush regularly. Colgate’s “replace your toothbrush every 3 months” communication is a great example of this. If the average frequency of changing a toothbrush is every 6 months and you change that to every 3 months, you double the size of the toothbrush market.
Repertoire. Getting current category shoppers to buy different, additional products. If you are in the tea category you could focus on your slice. Winning the share battle in the biggest segment – black tea. Or you could focus on growing the pie. Getting more people to expand the repertoire of teas they drink – green tea, fruit tea, cold brew. Giving tea the opportunity to play in more drinking occasions.
What about if you are in a category like plasters? Your market is limited by the number of times people cut themselves or get a blister, right? But even here, there is a potential regime. Elastoplast are trying to establish a cleanse (antiseptic wound spray), protect (plaster) and heal (wound healing ointment) regime. Add the cleanse & heal occasions each time and you’ve trebled the number of occasions in the category.
Trade Up. Getting current category shoppers to pay more for a superior product. If you think about value in a category you could focus on your slice. Managing value through things like pricing, pack sizes and promotional efficiencies that squeeze out a bit more value each time. Or you could focus on growing the pie. Giving shoppers genuine reasons to pay more for a product.
It could be product quality. Think advanced nutrition in pet food. It could be product performance. Think superior cleaning in laundry. It could be health. Think added benefit fruit juices. It could be convenience. Think prepared fruit or vegetables. Things that can drive value over the long term not just manage value in the short term.
When you are in the heat of the battle, it is easy to focus on your slice. But for long term growth you need to focus on growing the pie.
Create a bigger pie and you will get a bigger slice.
Take out the “lost” and you have “the art of category development”.
Feel free to forward. Have good weekend. Speak to you in a fortnight.