Most Fast Moving Consumer Goods Companies (FMCGCs) claim that consumers are in the center of all their business decisions, but not all of them comply. Everybody knows that any process or activity of the organization should be focused on adding value to the consumers, and those which don’t add any value, should be eliminated.
Eventually, consumers will not pay for inefficiencies of the company, they will switch brands. It sounds obvious, but too many companies just miss it, and sooner or later they pay the price. This is not a discussion about Lean Operations, but it is about really understanding the consumer, assign resources to do it so, and be able to develop solutions that not only satisfy her Needs, Wants and Demands8 but also develop experiences that delight her and reinforce her loyalty. In the long run, this is much more cost effective.
The Impact
There are well known examples of companies, which at some point in time had the preference of a vast majority of people, but their success played against them, they ignored the trends of their users’ behavior, who simply abandoned them. Remember the big three American carmakers a few years ago, two of them needed the support of the government to reborn; other more recent examples are Blackberry or Nokia, or previously Zenith, Sears, K Mart or Gigante supermarkets in Mexico; they just missed the train of consumer oriented innovative solutions.
On the opposite side, Apple, Hyundai or Starbucks, and more recently Samsung or Cinepolis in Mexico, have in common their profound knowledge and understanding of what their consumers want, intuitively or fact based. Other well known companies and industries have a long tradition and robust processes to ensure their consumer knowledge is updated, such as P & G, Nestlé, Coca Cola Company and the National Football League (NFL), just to mention a few.
The Application and The Results
When I was marketing responsible in Gerber Mexico, my new boss at that time asked me if we had a deep consumer understanding of the Gerber shopper, I replied, “well, off course”. When she started to ask me why Moms bought Gerber, what were the drivers, what where the barriers, what they really wanted about baby nutrition, what was her roll as mom when she fed her baby, what were the main Consumer Insights, so on and so forth, I realized that we didn’t have all the answers. We had a good set of consumer research, more than 40 years of experience in the jar baby food category in the country and a very strong number one position in the market; the brand had also an impeccable equity, but this was not enough to face the brand’s new challenges to ensure a sustainable healthy growth in the future.
It took us more than one year to set up a market research program and cover all the gaps of information we needed, a Deep Consumer Immersion. We did qualitative and quantitative studies, e.g. Ethnographics, Focus Groups, Uses and Attitude Studies, among others. The purpose was to find key Consumer Insights to generate ideas for developing a strong Value Proposition9 and a Brand Positioning10. As a result, a long term new products pipeline was developed, as well as a sound communication strategy for the brand, which helped preempt and overcome successfully the entrance of competitors while maintaining the brand’s strong leadership of the category, until now.
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8 Needs are the basic human requirements. People need food, air, water, clothing and shelter to survive. People also have strong needs for recreation, education and entertainment. Needs become Wants when they are directed to specific objects that might satisfy the need. Demands are wants for specific products backed by an ability to pay. Marketers DO NOT CREATE needs: Needs preexist marketers. Marketers, along with other societal factors, influence wants. Source: Kotler, Philip. Marketing Management. Eleventh Edition. Prentice Hall.
9 A well defined Value Proposition statement should answer the following questions: What bundle of products and services are we offering to each consumer segment? which consumer needs we are satisfying? what value we are delivering to the consumer? why consumers would prefer our products instead of others? Source: Osterwalder, Alexander and Pigneur, Yves. Business Model Generation (Canvas). Wiley.
10 In marketing, Brand Positioning is the process by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization.
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