|
|
 |
| |
Innovative and heavily advertised brands can grow on average three times faster than their competitors according to a new study by Bain & Company.
|
|
 |
| Consulting-Times E-zine
|
 |
|
|
This is a key conclusion of Brand Growth: Beating the Odds, a four-year study by the global business consulting firm. The study calls into question the conventional wisdom that brand success is based largely on size, maturity, or leadership within a category.
"The most significant point is that any brand can win," said John Blasberg, leader of Bain's North American Consumer Products practice.
In fact, winning brands (defined as those that gained share every year for four straight years) posted average annual-revenue growth rates above 10 percent according to the study findings. That is more than three times the average rate. The winners were 60 percent more likely to grow their share of category advertising.
"If brand managers want to outpace the competition with odds of three to one in their favor, they need to come up with something different," said Blasberg. "It can be a new product, positioning or packaging."
Any brand can win
The study revealed that both newer and older brands were able to grow faster than their categories on an annual basis during the 1997-2001 study period. Category dynamics, such as small or large, premium or value, had no influence on a brand's ability to win. However, categories with intense competition between two leading brands were more likely to produce a winner.
The Bain study found that both large and small brands can win. In fact, two-thirds of the winners were in slow growth categories, such as dishwashing detergent. Only one in four winners were leaders in their category, such as L'Oreal in hair colouring. Follower brands such as Mountain Dew accounted for 75 percent of the winners.
Innovators and aggressive advertisers
So who is leading the pack? From 1997 to 2001, Oreo introduced a cavalcade of new cookies and packages including Chocolate Creme Oreo, seasonals like Baseball Oreo and Mini Oreo in bags and single-serve packs. At the same time, Nabisco stepped up to the plate on advertising, spending $34 million on Oreo-related ads in 2001 alone. That's equivalent to a third of the total spent in the entire cookie category.
During the same time period, newcomer Boca soy protein products sizzled with an annual growth rate of 51 percent, almost four times the growth rate for frozen meats. Just entering its tenth year of business in 2003, Boca increased its revenues five-fold from $8 million to $41 million between 1997 and 2001.
In this time period, Boca rolled out new products such as vegetarian breakfast sausages and grilled vegetable burgers, and included grill marks and cheese in burger substitutes. It added "meat-red" colored boxes to attract new customers, particularly health-conscious carnivores. It grew its advertising buy 133 percent a year between 1998 and 2001 with new creative campaigns such as "You Won't Believe It's Meatless" and "The Taste Will Change You." In 200l, it jumped to number two in the frozen meat alternatives category.
"The common theme for winning brands is growth: in the product line, in the advertising spend and ultimately in sales," said Bain's Blasberg.
The Bain study focused on 524 brands in 100 consumer product categories. Ninety brands (17 percent) were ranked as winners. The data include $220B in sales and 75 percent of consumer products dollar sales covered in the IRI database.
|
|
|
|
|
|
|
