Leveraging the Competitive Frame to Drive
Profitable Revenue Growth

Do you really know the competitive frame for your brand within its category? It may be broader than you think. If so, that has implications for sales growth.

Here is an example. Several years ago, a major Brand in the Kids Cracker market worked with Henry Rak Consulting Partners to develop a complete usage- and purchase-based MarketMap. Its consumer behavioral view of usage and purchase indicated that the Kids Cracker category's competitive frame was quite broad. The category competed with a wide set of children's snacks ranging from potato chips, pretzels and cheese puffs to string cheese. The Brand also had unique strength above all other brands within the Kids Cracker category. That strength enabled it to source volume from other children's snack categories.

This is a common finding in our work with clients. The actual competitive frame for a strong brand within a category is often far broader than conventional thinking. Additional analysis demonstrated that the Brand had strength among a broader age range of children than previously imagined. The implications of this last point were particularly far-reaching, as our client had been contemplating launching a second brand to reach a broader audience. Instead of incurring the high costs of a new brand launch, our client could focus resources against an expanded target with its existing product platform.  

Armed with this knowledge, we worked with our client to develop an optimization strategy for the Brand to leverage its market strength. We simulated the business results of higher levels of advertising spending against a broader target and determined that the brand could achieve significant volume and profit growth through markedly higher advertising spending. The brand tested higher advertising in heavy-up markets and validated the results of our simulations. Over the past three years, the Brand has significantly and steadily increased advertising spending.

While plans for expensive new brand or new line extension launches were put on-hold, close-in innovations were introduced. New package types/sizes and new flavors were launched to make sure all key consumer needs of the category were met. The bottom line: consumers did not have a reason to switch to another brand because their favorite size or flavor was not offered.

The Brand had been locked into the same price point for years. Its unique consumer loyalty suggested the Brand likely had the ability to increase price, which was confirmed by subsequent pricing analyses, and resulted in a 10% list price increase.

The Brand positioning was sharpened around a more emotional, less functional message to parents while maintaining a message of fun for kids. At the same time, the competitive frame was broadened to kids snacking (not just kids crackers).

The results were immediate and spectacular.  A previously stagnant Brand grew 20%+ in revenue (and 15%+ in volume) for two consecutive years after the growth plan was put in place.  After the second year of 20%+ growth, the brand took a 10% increase in its list price – and continued growing!  Even as the economy turned sharply downward in 2008 and 2009, the Brand continued to lead growth in the Kids Crackers category.  Our client's Brand grew +4% in dollar sales while only declining -1.5% in volume. By comparison, the balance of the category grew only +0.5% in dollar sales while declining – 8.5% in volume.

Even in these very tumultuous times, brands can accelerate growth. Getting the fundamentals right is critical – regardless of the environment, but especially in turbulent times. This starts with understanding that the true competitive frame for a brand is the centerpiece of a transformational strategy because it opens up the reality of the consumers' world for marketers. It requires casting aside existing business paradigms and starting with an accurate, empirically-driven understanding of the true competitive frame of your brands, then creating a growth strategy that leverages your brand's strength.

In times of change, unanticipated opportunities are available if marketers know how to seek them out.