Brand Vs. Brand

26 Jul 2018
Louis Corso
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Brand Vs. Brand

(Thanks for the Idea Mom!)

Today we have an exciting bout between two amazing, fan favorite brands. They will battle it out to become the leading Brand in their segment!

The Champ

In this corner we have the reigning champ. This brand has market share; a great marketing campaign; well-thought-out packaging and recently changed their formula to be non-GMO and gluten free! They have been using focus groups to stay close to their customers; have 10,000 consumers at the ready;  geographically dispersed; aged 25 – 39; earning $50K per year and able to answer surveys; test new products and give feedback.  They have been the segment leader for 25 years and look like they can go for 25 more. Give it up for your favorite brand, Brrrraaaaannnnd AAAAAAAAA!

The Contender

I this corner we have the contender. They are the upstarts, rebels with a great new product, organic, taste amazing with biodegradable packaging,  certified not harmful to the environment. They have carefully crafted their image finding a niche that has tremendous demand and with the ability to create a wedge, gain momentum and unseat the reigning champ. They are focused and sharp and have been relying heavily on social media to get the message out.  They are conducting  tastes tests in strategic test markets to stay on top of possible new trends and gain brand awareness.  They are pulling their product through the channel and are using e-Commerce to get their products into the hands of consumers. They are hyper-focused on customer satisfaction, are hungry and are eager to stand toe-to-toe with the champ. Give it up for the Rebel with a Cause, your favorite upstart brand Brrrrraaaannnnnd Beeeeeeeeeeeeee!

Have a little Fun

We have to have a little fun with this one. Everyday these toe-to-toe bouts are taking place.  Whether you consider it a horse race, title bout in the boxing ring or tennis match, new Brands are popping up all over with new ideas and new products ready to take on the big enterprise brands. We like smaller and mid-sized brands, because they represent everything that makes us feel good. They are challengers and usually the underdog and everyone routes for the underdog. They are connected at the grass roots level, humble and willing to come out with new products quicker.  They are focused on quality control, have a smaller footprint and have a good chance of being bought out by a larger brand.

Enterprise brands can offer discounts and can rely on other brands in their portfolio to bring in cash just to maintain market share. They have the distribution and can be found at many places. They may lack the ability to bring new products to market quickly, because of their size and complexity. They may rely on the purchase of smaller brands to get into new markets and segments. They can push their product through the channel by offering better margins to their channel partners.

Innovation through Acquisition

How many new brands have come out in the last 10 years and how many have been bought out by enterprise brands? An entrepreneur or a group of entrepreneurs will put their heart and soul into these new products till they represent the individual(s). They are in fact their brain child and may have been for some time. As Mr. Gary Vaynerchuk, so aptly put it, “No one will love your business as much as you do”. In this case, the founders or that single person who brings this great new product to market.  Kind of makes you jealous in a way.  All the glory for those who have the guts to lay it on the line. If you have built your brand for acquisition and are in the right place at the right time, you stand a good chance of getting the attention of a large-enterprise brand and could hit a big payday. However, that is not the norm, and you better be good at your craft and have discovered something that can either not be replicated easily or at all.  Finding small markets that can grow because of a new idea is better (in my mind) than purely taking on the big guys just to be better at what they do. Market share, price and the ton of marketing dollars they can throw at a product campaign are hard to beat when you are a start up. Better to be a small fish in a small pond first.

Size can make a difference

The reason why smaller companies are taking on enterprise CPGs is simple. They can be innovative and move quickly into markets. If you want to succeed in the CPG industry as either a new or existing brand you have to be innovative. That means staying connected with your customers and look for ways to innovate and introduce new products. Better to imitate the good practices of companies like, Ben & Jerry’s, Arm & Hammer and MilkBone. They are great examples of companies that innovate through customer suggestions. Ben & Jerry’s introduces new flavors each year based on customer suggestions including Dairy Free options.

Nielsen said 88% of the about 900 food and beverage items that have been added to US store shelves the past five years came from small and medium sized companies. *1

Omni-Channel

Even though digital campaigns and e-Commerce is gaining tremendous ground you can’t forget about brick and mortar and traditional methods of advertising to get the word out, if you want to grow your brand. That being said, large enterprise brands realize the benefits of using social media to acquire new ideas and to get closer to their customers.

Final Thoughts

The CPG industry is where a creative entrepreneur can flourish. That being said, there are many brands that are strewn along the deep floor of this industries ocean of products.  If you think you are jumping in the water with a bunch of placid marine life that look pretty underwater, well you may be. However, there are big fish in this ocean that are very hungry and very protective.  If you find this as a passion and are willing to put in the time, then you can be successful, but after attending trade shows and seeing all of the would-be-products that have come and gone, it will be a hard fought battle. As always, my hat is off to those who try and succeed or fail and I cheer for the ones who fail, but get back up and try again.

Check out these reads!
  1. https://retail.emarketer.com/article/smaller-cpg-brands-upstarts-increasingly-level-playing-field/59406111ebd4000b2ceae057
  2. https://techcrunch.com/2016/09/28/large-cpgs-are-under-attack-by-startups-and-consumers-are-winning/
  3. https://www.strategyand.pwc.com/trend/2017-Consumer-Packaged-Goods-Trends

 

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