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Category Development

Creating new categories: How do we go about it?

In all the years of my career in FMCG, I have been exposed to a lot of new product and category launches. As an organization, it is always a tough call to decide on the new category, but once you decide, you need to go all guns blazing to develop and nurture it.

Below is a toolkit, based on my experience, to develop a category.

Framework for New Category Creation

Answering the Why:

This is the first and foremost question you ask when entering a new category: Why?

Ask plenty of questions to get to your answers

Creating a new category means forming a new habit. It means introducing something new to the lifestyles of people.

Why will the consumers change their habits and adopt a new product? What is that product offering that will make them switch? Which of the consumers’ problems are you going to solve and how? Do consumers really need it?

Gathering consumer insights is extremely critical at this stage. You need to delve in as deep as possible, chalk out the relevant requirements and design your research/surveys.

House Immersions and focused groups are some of the best tools to have an in-depth understanding.

In-home immersions give us a peak into consumers’ lives. We go and spend a few hours with our consumers in the comforts of their homes, observing their habits and asking questions wherever necessary. There is no interference from the researchers and the consumers go about their normal chores.

Focus Group Discussions (FGDs) are a bit different, and usually take place in central location. You invite members to a hall or a room and discuss the matter with them at length, trying to draw conclusions. They are more exploratory and rely more on claims than observations.

These qualitative studies can give you insights on consumer behavior, requirements, need-gaps, and product features. That’s what you need as a platform to build your new product on.

Right Price Pack Architecture:

Once you have the answers to the questions, and you have fine tuned your product, you would want to get down to sizing and pricing it right.

A new product depends on the number of people who have tried it. So, you have to ensure the price-pack architecture is right to induce trials and then convert people to regular consumers. This is especially important in a developing market.

In developing markets, a large chunk of population is excluded from quality products due to affordability issues. Many people work on daily wages, and ration their expenses based on what they can afford daily.

Single Serves have been the success at the bottom of the pyramid

Concepts of “Super Saver” or “Value” packs don’t work so well since it goes beyond the income of many such individuals. So, in those cases single serves at the right price point becomes very important.

For example, in case of food, it should serve as one meal occasion per person. So, as marketers, we need to balance the price point (many times driven by coinage/ change) and portion size.

Again, its not a one-size-fits-all strategy. One would also need to look at consumption patterns for this. But our experience has shown that for inducing trials, single serves work best.

Educate and Engage:

Since the category is new, the onus lies on brand to teach the consumers about product usage. This is one of the most critical steps since this is what leads to behavioral changes and category growth in the long term.

Make enough noise in ways that make people look your way and listen

Depending on your target population, you can reach out to kids (of appropriate ages), mothers, youth etc, and choose activities that interest them. Find the right media channels and programs to advertise. And of course, most effective of all activities is sampling.

While sampling, its of utmost necessity that we don’t just induce trial, we also need to have proper processes to educate them and at the same time make it exciting and engage them.

For example, while engaging with kids, you could do it with simple songs, colorful charts, and cute mascots. It has worked very well for us in most brands that we have worked with. It excites them and creates good memories of the brand. So, essentially, sampling is just not about giving out a free product. It is laying the foundation for a future heavy user and brand loyalist.

It is also a platform to engage with consumers, teach them about brand and product usages, and give them an experience that brings them back.

Availability and Visibility:

Reaching the farthest corners where it is at arm’s length reach to the consumer

Being available in all places where your consumers shop is a dream for every brand. Arm’s reach, introduced on large scale by Coke, is what everyone wants to achieve. And thus, a quick route to market becomes a boon in our ever-changing world.

Apart from making the product available, marketers also need to ensure that the product is visible through curtain displays, carton displays and hangers and signages in Traditional trade, and through proper branding and shelf occupation in Modern Trade.

Brand wherever relevant and don’t do it you can’t dominate.

So, in summary, creating category is a very painstaking process, and needs a lot of commitment in terms of right strategy, right execution and of course a lot of marketing investment. However, once you are successful, it can transform the world of consumers and brands.

Please feel free to drop your comments in the section below. Would love to hear your opinions!

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