Drive Share Growth in a Disrupted Environment, Part I
By Jayne C. Eastman, Managing Director

How to Define the Share Growth Opportunity?

Today's market environment offers a unique opportunity to grow share… or lose it. Consumers are more willing than at any time in recent memory to disrupt their normal patterns of behavior and switch brands, products, and even categories. Focusing on share growth now is both a defensive requirement and also a particularly viable offensive strategy.

To develop the most advantageous offensive and defensive share strategies, three critical questions must be addressed.

Share of What?

Consumers are accepting new ways to achieve desired end results, indicating new thinking about what constitutes core benefits. Some categories are clearly "closed sets," which means there are few likely substitutes (such as bathroom tissue or cat litter). Most others are far more substitutable than marketers would like to believe.

Marketers become trapped by the conventional wisdom that their competitive set is limited to brands or products that are similar in type, form, manufacturing approach, or retail location. But doesn't Amazon compete with Barnes and Noble? Isn't the simple home-made meal a source of volume for Applebee's take-out meals? Aren't consumers substituting – at least to some extent – vitamin-added foods and beverages for their Centrum?

Today there is increasing evidence that consumers are defining benefits more broadly, which then opens up new categories as solutions. For example, in beverages consumers may be redefining "health" benefits more loosely and including less healthful beverages as legitimate alternatives to pure nutrition products. In skin care, the trend to specialization may be reversing, with consumers willing to use less intense, less premium, or less specialized products to cover more usages and users within a household.

Knowing how to define share is more than a game played for the benefit of Wall Street analysts or the Board of Directors. It's an essential definition that directs how you frame your benefits for the consumer (what's desired in the correctly-defined category) and what it will take to compete vis-á-vis the correctly-defined competition.

Who Is the Competition?

In any competitive situation, share growth requires us to assess where volume will come from. Some brands and products are closer competitors than others; some are more vulnerable to competitive assault than others. The issue is in knowing which is which. The relative closeness of competition develops from consumers' understanding of the similarities and differences in the benefit structure of the category.

Fundamentally, brands, products, and categories compete closely because they are alike in providing the benefits consumers consider most critical. This benefit structure may not be the way manufacturers define their benefits and it almost certainly is evolving quickly in many areas as consumers seek more effectiveness and efficiency in their use of brands and products.

For example, when Dentyne discovered that the market for intense-flavor delivery included both gum and mints, they uncovered a new source of volume. Brands of mints, in contrast, were blindsided by an onslaught of new competition. The rapid growth of private label in some areas of the grocery store demonstrates the vulnerability of brands in this environment. Perhaps no better recent example of an expanded competitive set exists than in retail, where the growth of Wal-Mart is coming at the expense of higher-end retailers.

Failure to define the competitive set precisely with respect to the broad benefits sought by consumers is a more serious problem than is typically acknowledged. Marketers that become victims of narrowly defined competitive sets systematically institutionalize the likelihood of mismanaging every aspect of downstream strategies and tactics, from positioning, communication, pricing, spending, and retail execution.

The best talent and dollars against a narrow or ill-defined competitive set virtually assures that profitable growth will elude a branded product, or worse, force it into retreat. The only reliable way to understand how consumers define your competition is to quantitatively analyze consumers' actual purchase and usage behavior.

What Does it Take to Win?

Share growth depends on a precise understanding of category definition and competitive opportunity that is then reflected in what products we bring to market and how we describe them to consumers. However, both consumer communications and product development (base product improvement and innovation) can efficiently focus only on a limited number of benefits supported by a limited number of attributes.

When marketers do not have the right information to organize potential benefits and attributes, they often attempt to build in an unnecessarily large number of them. The result of too much comprehensiveness in execution is actually destructive – costing speed to market, inefficient development and product expense, fuzzy messaging, and fragmented and ineffective execution at retail. Precision is required upfront in the strategic process, in defining the bases of competition and consumer choice to make the hard decisions on what to prioritize and, just as importantly, what to de-emphasize.