What consumer goods do you sell
- 63 percent of consumers want to buy brands whose values they share. But two out of three CMOs lack a clear mission for their brand.
- Large consumer goods companies grow with small brands that benefit from the advantages of a large corporation and still retain their brand essence.
- A hybrid portfolio of small and large brands is the best prerequisite for protecting yourself against new competitors.
Small consumer goods brands often put everything on one card: They have niche offers that they sell with conviction and personality. They are not interested in reaching the broadest possible target group. They consciously advertise for consumers who share their values.
A concept that works. In the USA alone, more than 17 billion US dollars in sales have flowed annually from large consumer goods companies to more agile digital companies since 2013.
If you analyze the numbers, it's no surprise: 63 percent of consumers prefer to buy from brands whose values and beliefs they share. But two out of three CMOs in the consumer goods industry admit that their brands lack a clear mission.
consumers prefer to buy from companies whose values and beliefs they share.
Consumer goods CMOs admit that their brands lack a clear mission statement.
Think like start-ups, act like global players
Large consumer goods companies can grow if they specifically build, buy or develop small niche brands with a mission. Success depends on offering these brands the advantages of a large corporation (size and resources), but at the same time protecting them from the bureaucracy of large corporate cultures.
Micro-trends and local differences are celebrated in this new setting.
Niche brands that represent certain values are much more than a measure to hedge against disruptive factors. They offer consumer goods companies the opportunity to rethink their relationships with a changing consumer base, for which trust and transparency are becoming increasingly important.
Build a high performing portfolio
A hybrid portfolio of small and large brands with operating models that promote agility is the best prerequisite for effectively defending against disruptors.
But there is a loophole in agility that needs to be closed. 62 percent of digital disruptors say they can react quickly to changes in market conditions. Only 15 percent of current industry leaders believe they can do the same.
of digital disruptors say they can react quickly to changes in the market.
of the current industry leaders agree for themselves.
Companies that use transformation to adapt to change are likely to look at different aspects of their marketing models. They will use applied intelligence, revise their agency ecosystem and become consistently more agile.
In order to be prepared for the future, consumer goods companies need a hybrid growth portfolio: a mix of traditional large and small, “purpose-led brands”, ie brands with a mission with which they address different consumer groups. Companies can accelerate this development with the following principles:
- Unify agility. An organization can only handle a certain amount of complexity. Therefore, all superfluous entanglements that counteract the desired goal, namely growth, must be dissolved. Standardization in the background enables flexible rules to be introduced with which certain processes can run as if by themselves.
- Think small. Micro-trends and local differences are celebrated by small brands. Offers that are hyper-local and have little distribution can still be highly successful. If they manage to meet the needs of their target market and adapt quickly to changes. AI and analytics help them identify local needs and differences.
- More customer proximity. Start-ups are much closer to customers than large international corporations. Companies should promote this closeness to customers through real-time insight and feedback loops. In this way, they gain both qualitative and quantitative feedback.
The first step to success is to rethink the business model. But if you think you can simply imitate small brands, you will not achieve much. Large consumer goods companies need to create a clear value proposition for every single brand in their portfolio. This should then be reflected in everything you do - from the product to advertising.
MANAGING DIRECTOR - ACCENTURE STRATEGY
Nicholas helps executives rethink sales and marketing and drive growth in a disruptive industry environment.
Managing Director - Accenture Strategy
Fabrice advises corporations on the development and implementation of customer-oriented growth strategies.
Managing Director - Accenture Strategy
Matthew advises C-suite leaders on how to achieve growth with innovative customer strategies.
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