HOW TO DRIVE SALES IN YOUR FMCG’S. PRICE REDUCTION IS NOT ALWAYS THE ANSWER
In a time when the supermarket giants are driving prices down, down, down, how can you stay on top of the game, maintain product quality, and continue sales growth for your products?
Delivering a good product experience is essential to repeat purchase and will help drive organic sales growth. Most consumers will not re-buy an inferior product – no matter how cheap it is. People are willing to compromise on product quality when buying a cheaper product, but there is a limit.
At a recent research conference in Sydney, Damian Young – General Manager Marketing at Chobani, spoke about Chobani’s success story and the strategy they used to drive sales from around $200k when they first launched in Australia in 2011, to over $90 million in 2016.
Young explained that they had a low media budget and had to come up with a sound strategy to drive growth in the presence of many long standing competitors like Yoplait and Ski. There were four key parts:
· to make a great product,
· make it available for sale,
· get people to try it, and
· invite people to talk about it.
Young stressed the importance of delivering a great product experience and measuring it. People are no longer fooled by pretty packaging. He said “If you make a crap product now or deliver a crap service there’s nowhere to hide”. Social media can quickly turn into your worst enemy if you don’t deliver on expectations.
Chobani have a philosophy that ‘The product has to be right’ and they do not compromise on quality. Young said “It takes four litres of milk to make a litre of Chobani yoghurt, and it takes one litre of milk to make a litre of Yoplait”. This is how Chobani achieves its amazing thick and creamy texture, and high protein content (without the use of additives) and why it commands double the price point of Yoplait.
Chobani have their own field team that give away a million pots of yoghurt each year. Product trial is a clever strategy to use when you have a great tasting premium priced product, as people can appreciate the quality of the product for themselves without the initial outlay. Once consumers have tried it, they are converted.
Streets deployed a similar strategy in the 1990’s when they introduced Magnum. Magnum was double the price of the most expensive ice-cream at the time – Heart, however, the product was worth it. People where happy to uptrade from Hearts ice-cream and compound chocolate to Magnum’s super premium ice-cream and Belgium chocolate.
