Strategic Cost Trimming: Elevating Value in the Media Landscape
In the recent past, promoting consumer products resembled a genteel game of lawn tennis, where established competitors invested in creative strategies with extended lead times. This involved relying on proven models of TV advertising and big-box retail, often in collaboration with trusted agency partners. However, the contemporary landscape has transformed this dynamic into a sprawling contest of mixed martial arts. New competitors have entered the arena, adhering to different rules, introducing an unparalleled complexity of channels, content, and partnerships. This shift has brought about a significant change in the speed and methodologies of operation, with punches metaphorically flying at incumbent consumer products companies.
Adding to the chaotic nature of the battlefield is a radical transformation in brand growth models.
Throughout the course of most executives’ careers, technological advancements have revolutionized how consumers interact with brands. In both the US and the UK, over 60% of consumers now explore and discover products online, with 85% of millennials placing greater trust in reviews from anonymous individuals than in traditional advertising. These technological shifts have not only changed consumer behavior but have also significantly transformed the competitive landscape.
CMOs (Chief Marketing Officers) can no longer rely solely on forecasting future profit pools by expanding into new geographical areas or adjacent product market segments. Such an approach risks overlooking disruptive trends within the industry. Profit pools are swiftly transitioning from products to services, experiences, and communities, with mass products evolving into specialized segments characterized by rapid personalization.
In today’s landscape, the growth strategy for consumer products companies necessitates a dual perspective—looking both “present forward” and “future back.” This entails creating innovative solutions to meet current consumer needs while simultaneously envisioning future trends. It’s akin to developing a faster horse in the present while also conceptualizing the future car. This approach is crucial for defining new growth platforms that extend beyond the limitations of current products, business models, and capabilities.