Core to a brand’s revenue growth is a disciplined and methodical Go to Market strategy. This is the second in an 8-week series outlining the framework elements of a successful Go to Market strategy. The first focused on Purpose and can be found here. The second core element to a successful Go to market strategy is the focus of this article: Product.
When selling a product, the bottom line goal is to sell (1) The right product, in (2) The right place, at (3) The right price, at (4) The right time, to (5) The right consumer target.
This article will focus on product, with a reference to place as merchandising. Place is typically considered the selling outlet or vehicle. This and the other components of this equation will be addressed in subsequent articles.
Thank you for your interest in this topic. We welcome your feedback and comments, and the opportunity to help you on your journey.
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Although its authenticity is impossible to confirm, one of my favorite quotes of all time is attributed to Charles H. Duell, Commissioner of the US patent office in 1899. According to legend, Mr. Duell claimed that,
"Everything that can be invented, has been invented"
If this were in fact the case, everything that was created in the last 119 years – and I mean everything – would not exist. Nor would our own dreams of what could be possible, or those of every generation to come, would ever be manifest into reality. Man, that’s a real bummer.
Thankfully this isn’t the case, and in fact, it’s just the opposite. Our world is alive with new ideas, new breakthroughs, and new products every single day. If you’re a fan of food, beverage, personal care and wellness product discovery, there is no shortage of new products to delight, entice, intrigue, and engage with on a daily basis.
Therein lies the conundrum – it’s never been easier to start a new brand, whether as a personal mission, opportunistic entrepreneur, or defensive strategy, yet the chances of success are small (it depends how one defines “success”, but let’s use a general notion of a sustainable business model with a meaningful level of target consumer awareness, category market share, household penetration, and profitability). I won’t cite statistics because that’s not the point to center on. This is: product strategy requires thoroughly defining multiple positioning points, but success is dependent on differentiating through the right ones.
Consider this: do we really need another salsa? BBQ sauce? Peanut butter? Coffee? The answer is, actually, maybe. Thinking there’s nothing else that could be invented could easily lead to product commoditization. At best this thinking suggests the only opportunity for new product introductions are iterations of existing items (lower sodium or sugar, new size or flavor, etc.), and at worst, complacency with what exists and how things are. Thankfully there are acutely curious & observant people among us who see beyond the here and now to what “could be” with the passion to drive their ideas forward. And that is the first tenet of a successful product:
Address a market gap
The classic definition of a market gap in the simplest of terms is “an unmet consumer need”. This approach more often leads to an iteration, iteration+, or a combination of existing products (think pre-made s’mores). Some of these iterations are nice additions to our lives (think pre-made s’mores 😊), yet real innovation are products that create a new category or subcategory, and/or a retailer can’t figure out where to merchandise it in the store. Some examples when they were/are being introduced:
One company The Movitz Group worked with is Riley’s Organic. Better for You, er, Your Pet pet food has been in the market for many years. The founders of Riley’s still saw a distinction between what they ate and what their dog ate. Feeling like their dog was a member of their family and whom they didn’t want to feed something they wouldn’t eat themselves, they created dog treats made only from USDA certified organic human grade ingredients. Here’s the ingredient deck from one of their flavors:
Riley’s founders recognized the importance and culturally significant trend of healthy and clean eating for people, and how humans think & feel about their pets on a personal & emotional level, yet noticed the disconnect between the two. For the company, Riley’s human grade dog treats are just the first step in that journey to addressing that gap.
Design to nuanced consumer use occasion(s) &
Integral to understanding a market gap is the use occasion and need state of the consumer for the product. Need states are important to understand for context and marketing but don’t drive product characteristics like use occasions do.
Need states encompass a person’s emotional, spiritual, and physical needs, and include personal and social status desires. Following are examples of possible need states within certain categories:
Once the Need State sets the framework, defining the use occasion is essential for product positioning refinement, both for consumers to understand how to connect with the product and for brands to hone its marketing campaigns and messaging to be effective. Using a subset of the above Need State examples, use occasions might look like the following:
Need State: Celebration
Use Occasions: Birthday party, Religious ceremony, Engagement party, Halloween party
Product: How might product characteristics be shaped to fit the intended use occasion (shape, size, color, burning time, etc.)?
Need State: Meal Replacement
Use Occasions: Working through lunch, no time for breakfast, Smoothie preference, etc.
Product: How might product characteristics be shaped to fit the targeted use occasion (nutritional profile, serving size, packaging, product form, flavor, etc.)?
A great example of a product developed in response to the combination of a need state and use occasion is the yogurt tube. Yogurt is of course traditionally eaten from a cup or bowl with a spoon. Toddlers don’t always have the dexterity to eat with a spoon neatly (use occasion), in addition to the pace of life with toddlers is always like being on the run (need state). Viola!
The yogurt tube is a product form developed to clearly address this need and use occasions. The result is a lot more kids eating yogurt on their own, fitting into the lifestyle of millions of parents and their kids where it didn’t before tubes (or at least was a lot more work).
Merchandising is not category management
Merchandising is best thought of as the presentation of products. In a brick & mortar store, merchandising includes display design and display location, shelving design, signage/POP materials and sampling. Speaking of POP, check out this page on Pinterest for some inspiration.
At a macro level, product preservation method will dictate the department of a store in which a product will be merchandised (ambient, refrigerated, frozen). Your product would be ideally shelved where consumers expect to find it, and hopefully in a high traffic area. If it’s not, suggest cross-merchandising (product placed in or near the set with which it is most likely to be used as a compliment (think chips and salsa)) or double/secondary merchandising (mustard in the condiment aisle and at the deli)). Product placement location within a category set is subject to an entire science for optimal placement (spoiler: eye level), and a number of tactics are important for subtle but important visuals (label front-facing, stock rotation, dusting, shelf/price tag visible and current, and more).
Given the tendency of consumer preference for fresh products, developing a traditional ambient category-based product for the refrigerator sways the fresher perception in your favor. The Perfect Bar is a great example of taking an ambient category into the refrigerator. One caveat – this also means limiting your possible merchandising locations to the refrigerated case – for now. Today that space is fairly fixed within a store, but retailers are or will be making investments to redesign the store experience thanks to consumer and cultural food trends, and more refrigerated space is inevitable. Keep in mind too that a refrigerated or frozen product has a more complex logistics path than a shelf stable product.
On line merchandising includes page design, multiple product views, reviews, extended narratives & product information, ‘where to buy’ or ‘buy now’ buttons, ease of searching for and finding the desired product, and more.
All this said, first and foremost, product presentation begins and ends with branding, packaging and labeling. There are entire books, degrees, and businesses focused entirely on branding, and for good reason. However, context matters, which is why all points noted above matter, too.
Nutrition & characteristics through
Your target consumer’s lens
There are dozens if not hundreds of considerations a consumer makes when choosing a product: clean ingredients, grass fed, compostable packaging, allergen friendly, vegan, high fiber, high protein, low sugar, (vegan version) same nutrition profile (as the animal version), good value, price, and on and on. Looking for inspiration on product features? Look across the category and identify the common and emphasized features. Then look at adjacent and complimentary categories, and even disparate categories, to identify product attributes and nutrient features. What do they have in common? Where do they differ? How is your product distinct and alike? Does your product combine sought-after attributes from multiple categories? Does your product elevate some aspect of the target category? Most importantly, what is important to your target consumer? Why does the consumer buy product ‘A’? Why don’t they buy that same product? Why does your consumer need your product?
A product might have a dozen attributes it could highlight and claim on its package, but it can’t (or at least shouldn’t). Working with an experienced packaging designer to build an effective label is vital – there are things you have to state, things you want to state, and things the consumer will be moved by. Knowing the first and last of these 3 is what matters.
Consider how flavor profile can be a differentiator – and be realistic about the appeal strength to a sizable audience of certain flavors. We know consumers are increasingly interested in global flavors and experimenting with new flavor combinations, but vanilla and chocolate are still two of the best-selling flavors across categories. Your objective should not attempt to be everything to everyone (it’s just not possible), so extending or even centering around unique, special or unusual flavors could be part of a very successful product strategy. Keep in mind though, the more exotic the flavor profile, the more limited the consumer appeal and/or occasions where it is likely to be consumed.
Build a platform, not a product
Products are nice. Platforms are awesome. A platform is an element that gives a brand permission to logically and naturally extend into multiple categories. A platform catalyst might be an ingredient, a proprietary blend of ingredients, a proprietary supply chain with large barriers to entry, a philosophy, a diet, a lifestyle, or even a branded set of experiences. Below are examples of platform brands and the number of categories in which they compete. None of them started in the number of categories they’re now in, but the consumer engagement and brand equity that developed over time, in combination with the vision and ambitions of the founders or owners, propelled these brands to where they are today. As a footnote, in the herbs & supplement, and personal care categories, platforms are common – brands typically offer products across the entire department.
categories defined by SPINS
One last consideration - one platform bigger than all of the above, and which continues to grow in influence, competitiveness and category dynamics, is private brands….
Strong positioning begins with clearly targeting a market need for which there is a solution gap. Next, articulating the consumer need state and use occasion are vital to forming an actionable framework and product strategy within this market gap. Differentiation can be achieved by elevating a nutrient or attribute from within the category or borrowing from an adjacent or disparate category, while offering unique and inviting flavors along with flavor stand bys enables the most consumer appeal and experimentation. Presentation of your brand matters, in store and on line. Think about the shopper journey to discover or select your product, and pay attention to the details surrounding in store or on line placement. Lastly, building a platform has the power to earn sales and consumer breadth and depth at levels exponentially higher than single category products. While in some cases the store brand can be the largest platform brand in a given retailer (and in Aldi & Trader Joe’s, the vast majority of selection), store brand are followers. National brands are truly the inspiration and innovative engine consumers seek.
Next week: The other side of product strategy: Production Strategy decisions.
About The Author...
Michael Movitz has more than 25 years natural/organic products industry experience across retail, manufacturer, broker and market research organizations...