It's not exactly a secret -- efficiently managed brands frequently
generate better than 80% of volume from 20% of users. But here's
a lesser known info-bit. An astoundingly high proportion of healthy brands
with low market penetration or an extended repurchase cycle -- or both
-- track their success to the 80/20 Rule. Because the only way to succeed
as a small brand is to run lean. Efficient. Focused.
Question: if 80% of $volume of a mature brand is generated by
20% of users...why would a volume minded manager allow the lightweights
to drive the NPD process? It only takes third grade arithmetic to discover
the volume contribution of a frequent user is sixteen times that of moderate/light
users and therefore the only consumer needs, belief systems and product
technologies that really impact volume are the ones relevant to the heavy-users
of brands from which the new brand will draw its sales volume.
Ultimately the new product concepts created by the 80/20 focus also should
be evaluated by heavy-users and potential high volume prospects. Once
again, who cares how the lightweights vote?
NPD managers who know the new brand sales volume will -- from the introductory
launch to the bitter end of the brand's life cycle -- never support
the $24,000,000+ A&P spending levels required to maintain mass
marketing efforts should design the brand to reflect that corporate reality.
The consideration should influence every phase of the NPD process from
the concept development phase onward.
The ultimate reality, for most managers of low budget brands, is the bottom
line. For that materialistic but highly compelling reason, focusing concept
development on the hi-volume 20% user base is the most effective way
to maximize the productivity of every dollar invested in any new brand
-- large or small. For low penetration or infrequently purchased brands
it's the only way.
The tool is designed to supplement/enhance other Polaris processes available
to NPD managers. It concentrates the primary procedure -- for example,
Re-Engineering Technology -- exclusively on the high-volume users within
either the category...or...the competitor targeted as the primary source
from which the new brand will draw its volume.
To ferret out heavy-user targets that may be as small as 1% of the
US adult population, the tool uses a 200,000 consumer database to identify
the demographics, behavior patterns and lifestyle characteristics of homogeneous
clusters of the targeted 20% heavy-users. From mind-numbing arrays
of data cross-cuts, a collection of best-bet cluster profiles are generated.
Ultimately a half dozen are selected to generate the information that
will drive the primary NPD tool selected by managers.
Interviews with respondents recruited to match the selected subsets of
heavy users are conducted to execute the procedure involved in the preferred
NPD tool. The effort pinpoints need gaps and perceived deficiencies in
existing technology of competitive options. Ultimately the new product
concepts created by the concept team are also evaluated by heavy-users
and potential high volume prospects.
Most assuredly it's an elitist effort. For the last time, who cares
how the lightweights feel?
The addition of pre and post supplements to the standard procedure chosen
by NPD managers nearly doubles the effort, completion time. And cost.
Perhaps for that reason it's the last NPD Tool Polaris has added to
an extensive array of procedures. But the process that suggested the potential
-- the Management Tool called "Relevancy Marketing" -- has been
a mainstay for re-staging small brands for years. Under its direction
low penetration, small budget brands like Clorets, Certs, Vivarin, Campho-Phenique,
Blossom Hill and MG Vallejo typically project payout of A&P investments
in half the time required for traditional mass marketing programs.
Historically the profile of brands attracted to the process has run to
low penetration... infrequent repeat purchase...low margin brands that
must run lean and focus available promotional funds on high volume prospects.
The definition runs from household cleaners to sparkling wines. From PC
Notebooks to OTC drugs. Prospective users include financial, discount
brokerage and internet services. Perhaps travel cruises, gaming and recreational
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