By Santhanakrishnan Ramabadran
CPG brand managers across the globe are faced with the unenviable task of finding answers to this interesting question – what consumers want? I suspect there are even a few who wish they knew their target consumer segments as well as a ‘super-charged’ Mel Gibson did, in his movie with a similar sounding name.
For a variety of CPG categories such as Food & Beverages, Snacks, Confectionaries and the many sub-categories within, answering this question ahead of competition could mean significant headroom for growth in otherwise commoditized markets, and in some even a matter of survival given the choices made by increasingly discerning consumers.
To complicate things further, compared to the gradually changing consumption trends across generational cohorts seen till recently, brands today have to serve multiple segments that co-exist. These segments tend to be quite different from each other in how they consume information and make choices. Millennials are now sharing the grocery store aisle space with older consumer segments, and post millennials are just about starting to make household consumption choices This means older trends like convenience co-exist with recent ones such as snackification and healthy-indulgence. The new normal, if there’s one, is yet to set in.
Business opportunities identified by thorough analysis of data from multiple sources can help navigate this landscape. On the surface, this may appear to be a consistent practice. However,
– Traditional approaches of relying heavily on consumer household panels often suffer from the problem of sufficiency of coverage vs cost of procuring larger samples
– New age social media data analysis are called into question as they are still standalone reports on trends and sentiments as opposed to being a complete story
– Insights from historical product launch tracking data are robust, but regional insights within a country are difficult to get through this approach.
– Sell-through data is good, but is primarily a reflection of past/current assortments vs what could be the future.
Connecting the dots across all these to build an integrated story, discovering and sizing emerging opportunities, and putting an executable plan in the hands of seasoned sales and marketing teams is what is required – and today, only a few can claim to be masters at that. The few that do, leverage the above, and even go beyond.
For example, a global F&B giant was able to discover opportunities to improve sales volume by a few percentage points on its multi-billion-dollar snacks portfolio through a comprehensive analysis of all sources, including zip-code level demographic aggregates and snacking habits data available through public sources. A data science driven approach was leveraged to identify and size emerging opportunities at specific region x channel x product claim levels. Furthermore, it helped identify which specific levers to pull – assortments / distribution / price / promotions (trade) etc. Secondary research based on credible sources was used to further validate.
A comprehensive approach such as the above helps CPG companies go into their annual planning sessions with powerful stories to execute, along with a reliable estimate of size-of-prize for themselves and their key customers.
Elsewhere, a global commodity supplier looking to move up the value chain by focusing on specialty beverages took an integrated approach to understand which particular flavors, aromas, and origins clicked with different consumer markets and what’s on the horizon. Not only are they now geared up to serve their CPG clients better, but also to deliver a unique experience to the end consumer.
While reliable data from external sources is a function of individual market maturity, at Tiger Analytics we have often been able to support CPG clients using data sourced through unique partnerships and blending that with their internal data and of course, social media, to build a comprehensive story: an approach that can be leveraged in both developed and developing markets.
Though the foodie in me pushed to pick the above categories for illustration, smart brands across categories are now leveraging the integrated insights approach outlined above to serve their consumers not just what they want, but what they need as well: food for thought!?
Also, check out our other blogs on CPG Analytics and learn more about what consumers want:
1. 5 Current Priorities in CPG Analytics
2. Trade Promo Spend Effectiveness
3. eCommerce Data and Analytics in the CPG industry
4. Improving CPG Sales Force Effectiveness