Case Study: Growing a Brand by Expanding Its Competitive Frame

The actual competitive frame for many categories is often far broader than conventional thinking. For example, the competitive frame of the children's cracker category is quite broad. It consists of a wide set of snacks ranging from potato chips, pretzels and cheese puffs to string cheese. The maker of a major children's cracker brand that was popular among young children had tried line extensions aimed at expanding the audience and failed, resulting in dampened expectations for the brand. Our analysis of consumers' actual usage and purchase behavior revealed that the brand was stronger among a broader age range of children than previously imagined. In fact, its unique strength above all other competitors enabled it to reach beyond the children's cracker category to source volume from other snack categories for children.

HRCP worked with this brand to develop a complete usage- and purchase-based MarketMap. Instead of incurring the high costs of a brand launch, we recommended focusing resources against an expanded target with its existing product platform.

We helped our client to develop an optimization strategy for the Brand to leverage its market strength. Here are the steps taken:

• We simulated the business results of higher levels of advertising spending against a broader target and determined 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 been significantly, and steadily, increasing advertising spending.
• While plans for the launch of expensive brand or line extensions were put on-hold, other innovations were introduced. For example, new package types and sizes and new flavors made sure that all key consumer needs of the category were met. 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 fun snacking message to kids. The competitive frame was broadened to kids snacking (not just kids' crackers).

The results were immediate and spectacular. The 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 in early 2008…and continued growing!

Even as the economy turned sharply downward at the end of 2008, the Brand continued to lead growth in the Kids' Crackers category. In the fall of 2008, our client's Brand grew +4% in dollar sales while only declining -1.5% in volume vs. the same period in 2007. By comparison, in the fall of 2008, the balance of the Kids' Crackers category grew only +0.5% in dollar sales while declining – 8.5% in volume vs. the same period in 2007.