2016-07-19-Bain-Winning_with_India_s_Shoppers_28页_7mb

Summary of "WINNING WITH INDIA'S SHOPPERS"

Core Content

This report explores the dynamics of brand growth in India's consumer goods market, highlighting the importance of household penetration over brand loyalty in achieving market leadership. It emphasizes the need for brands to understand and adapt to the repertoire behavior of Indian shoppers, who tend to buy multiple brands within a category rather than being loyal to one. The authors, Joydeep Bhattacharya, Nikhil Ojha, and Shyam Unnikrishnan, from Bain & Company, collaborated with IMRB Kantar Worldpanel to analyze the shopping habits of nearly 80,000 Indian households across 37 key consumer goods categories, including food and beverage, home and personal care.

Main Findings

• India's Market Inflexion Point: India is at a significant growth inflexion point, with a strong economy, favorable demographics, and positive investor sentiment. It is expected to grow at a faster rate than it has in the past decade.

• Brand Growth Challenges: Despite the market's potential, only one in five brands achieves significant growth. This is not due to the category but rather due to how brands perform within it.

• Penetration Drives Growth: Household penetration is a more important factor than brand loyalty or purchase frequency in determining market share. Brands that increase their penetration tend to outperform others.

• Repertoire Behavior: Indian shoppers are not loyal to a single brand; they buy from multiple brands in a category. This behavior is observed across both urban and rural populations and is expected to intensify as the market grows.

• Churn is High: Leading brands in India experience high customer churn, with about one-third of their shoppers leaving each year. Brands must focus on re-recruiting to maintain their market position.

• Local and Premium Brands Gaining Share: Local and quasi-local brands are gaining volume share, especially in categories with distinct local tastes. Premium brands are also growing in categories like coffee and ready-to-drink juices but are losing ground in others like insecticides and puffed snacks.

• Hero SKUs and Range Productivity: Brands that focus on hero SKUs—products that are widely known and contribute significantly to sales—can enhance shopper visibility and brand growth. Brand winners also tend to launch fewer but more successful products, often focusing on innovations that cater to different channels, occasions, and price points rather than just high-profile products.

Key Strategies for Success

• Brand Memorability: Brands should consistently reinforce their audio and visual cues and develop memes around consumer needs and occasions. This helps in building a strong brand identity that resonates with shoppers.

• Shopper Visibility: Ensuring that core products are available in various sizes, formats, and price points across as many stores as possible, with prominent shelf visibility, increases the chances of landing in consumers' baskets.

• Range Productivity: Launching fewer, more successful products is key. These products should be designed to tap into new consumer baskets rather than cannibalize existing sales. This approach leads to higher innovation success rates and frees up resources for core brand development.

Checklist for Evaluating Brand Strategy

A set of 10 questions is provided to help brands evaluate their strategy. Some key points include:

• Maintaining brand assets consistently for at least five years.
• Focusing on numeric distribution rather than weighted distribution.
• Prioritizing acquiring new customers over increasing usage frequency.
• Ensuring hero SKUs have maximum shelf space and visibility.
• Measuring the impact of new innovations on penetration growth.

Conclusion

To succeed in India's consumer goods market, brands must focus on penetration, repertoire behavior, and strategic product launches. The report underscores that penetration growth is the only reliable driver of volume growth, and that brand winners consistently outperform by investing in memorability, visibility, and range productivity. With the market expanding and churn increasing, brands must continuously re-earn shopper attention and expand their reach to thrive in the Indian market.