It is easy to overlook what actually caused most of today’s market share-leading iconic brands to get where they are. While marketing and branding play an important role in the growth of any consumer facing business, it is very easy, in retrospect, to ascribe an unfair share of credit for a food product’s eventual success to its brand. After all, when you consider the youthful days of former niche players like Chobani, Kashi, Stacy’s, vitaminwater, few would argue they are stuff for case studies in excellent works of branding.
It’s no secret that young, especially premium brands, are increasingly making inroads on established, legacy food and beverage brands in the American market. As legacy brand market share continues to slump, we find that industry leaders are beginning to acknowledge a long-ignored truth: their companies’ portfolios are fully stocked with older, legacy brands that operate fundamentally differently in modern food culture than younger, entrepreneurial upstarts. Portfolios with younger (especially premium) brands, require a dual-mode strategic mindset that acknowledges where each brand lives in the product life cycle.
This is why we introduced our own life-cycle approach to better understand the role of brand in the product life cycle. The model was based on years of ethnographic research on the relative power of brand as a symbolic tool of persuasion to purchase and try a product as a business ages and grows (or doesn’t). This model reflects four key demand components behind food and beverage consumption:
- Product symbolism: Implies that food and beverage consumption is about more than what’s printed on the package (e.g., healthy greens, grains, and protein)
- Sensory experience: The lived experience of the food when eaten and while digested
- Brand symbolism: A clever handle for marketing communication and shelf navigation
- Cultural context: What shapes the meaning of the brand and product symbolism in ways no brand manager or marketer can fully control
We have since updated our earlier work with new research and present it in our special report, Working the Product Life Cycle as Portfolio Strategy. Our new heuristic model explains how the four components of demand interrelate as product lines age.
At each stage throughout the product life cycle, we find that brands accentuate different components of consumption. For example, early stage brands like Skinny Pop Popcorn accentuate (in order of importance) Product Symbolism and Sensory Experience, followed by Cultural Context and finally Brand Symbolism.
An important takeaway from our life cycle analysis is the notion that “brand” is not very important at either the beginning or the end of the product life cycle when it comes to persuading consumers and encouraging loyalty. This model reflects the unconscious symbolic prioritization of ordinary consumers but also impacts the marketing playbook’s priorities as well.
Understanding brand life stage within the context of cultural demand helps to illustrate key dynamics that leaders need to appreciate as they restructure portfolios for the long term. In a society where per capita packaged food volumes are declining slowly and per capita beverage volumes are basically flat it is particularly difficult to structure portfolios for organic growth.
For leaders committed to organic growth as a fundamental lever to drive shareholder return it is increasingly important to:
- Evaluate late-stage brand portfolios. The greater the proportion of revenue flowing through slipping and struggling brands, the greater the urgency to invest and acquire fast-growing mid-stage brands and early-stage ones that can be scaled quickly.
- Invest early in the life cycle to capture growth and optimal returns. The challenge with investing earlier in the life cycle to rebalance portfolios is that most of the opportunities that are cash efficient lie in the early stage.
- Learn the new playbook for scaling the small. Managing brands in the early stage of the life cycle is about managing the evangelization of a differentiated product experience with a small consumer base.
America is a very challenging market in which to manage large portfolios for organic growth in the twenty-first century. Nevertheless, examples do exist of large businesses that are currently and effectively working the entirety of the product life cycle to their advantage.
Click here to download a free copy of the report: Working the Product Life Cycle as Portfolio Strategy
As CEO of The Hartman Group, Demeritt drives the vision, strategy, operations and results-oriented culture for the company’s associates as The Hartman Group furthers its offerings of tactical thinking, consumer and market intelligence, cultural competency and innovative intellectual capital to a global marketplace.
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