HOW THE RIGHT PERSPECTIVE CAN RESHAPE YOUR MARKETING DECISIONS
The primary objective of shopper response analytics is to explain purchasing behavior and then effectively utilize those learnings for commercial purposes. For the typical fast-moving consumer goods (FMCG) manufacturer facing stiff competition, as many as 70% of shopper decisions are made at the store shelf where there is limited immediate control of the engagement process. Therefore, analyzing purchasing behavior equates to evaluating how marketing activities, both inside and outside the store, influence shopper choices.
Explaining shopper choices requires careful consideration of all of the competitive factors. This is inherently more complex than the sales analysis for a single product or brand that dominates most shopper response analytics. Lee Cooper, Professor Emeritus at UCLA’s Anderson School of Management, once described the single product or brand approach as an extremely distorted view of the market. This limited analytical perspective implicitly assumes that the product or brand in question partially monopolizes the market. As a result, any strategy based on this implicit assumption is bound for failure if the structure of market represents an oligopoly or monopolistic competition, such as FMCG.
Many marketers have learned this painful lesson as they have watched their best-laid plans fall apart due to unexpected responses from competitors. Cooper went on to compare the problem to taking a picture of the market through a telephoto lens. While the one brand may appear in excellent focus, the foreground or background that surrounds this brand is either excluded or out of focus. As appealing as the picture may seem, this view ignores too many important factors.
This is precisely why Middlegame’s Shopper Response Analytics Platform for assortment, pricing, merchandising, and even media assessment is based on the wide angle view. This view enables us to share the same perspective of shoppers at the store shelf. When we assess various growth opportunities, we address the implications of those scenarios for every product competing for the shopper’s attention. Outcomes are always placed into the context of transferred demand versus category incrementality. Often, the competitive products are members of the same portfolio, so transferred demand is actually cannibalization.
Without the wide angle view, it is not possible to provide a true portfolio perspective for any opportunity. This is why the wide angle view is such an important construct for converting insights from shopper response analytics into action and sustainable growth.
To find out more about applying the wide angle view to your shopper response analytics or to see examples of this in practice, visit our website at www.middlegame.ie. In addition, you can check out the incredible work on market share analysis pioneered by Lee Cooper at https://www.anderson.ucla.edu/faculty/marketing/faculty/cooper/research.
Middlegame is the only ROMI consultancy of its kind that offers a holistic view of the implications of resource allocation and investment in the marketplace. Our approach to scenario-planning differs from other marketing analytics providers by addressing the anticipated outcome for every SKU (your portfolio and your competitors) in every channel. Similar to the pieces in chess, each stakeholder can now evaluate the trade-offs of potential choices and collectively apply them to create win-win results.