New Products. Knowledge. Speed = Success
By Vikram Verghese
By Vikram Verghese
Insight from a marketing guru on how to track consumer trends, get ahead of the competition and turn these strategies into bottom line profitability.
Like everywhere else on the planet, Canadian food consumption is influenced by multiple factors. Health, age, income, household size and composition, number of incomes, ethnic background, attitude, media exposure, perception, lifestyle and awareness—all of these contribute to and impact our final purchase decisions. Consequently, those businesses that constantly monitor these factors and changes in them will be better equipped to deliver new products that best satisfy their customers.
Decades ago, changes in consumer habits, behaviours and needs tended to happen gradually; and there was little business advantage in keeping abreast or even ahead of consumer trends. Consumer needs in the 21st century are changing at a rapid pace, and businesses that wish to survive in such a constantly evolving environment need to adapt, be externally oriented and flexible enough to cater to an ever-changing set of demands from their customers and consumers alike.
Fundamental to growth, and at times, even for survival, is the ability to track consumer trends and the ability to quickly convert this knowledge into relevant products. Knowledge and speed are mandatory. One without the other is insufficient in the current marketplace.
Before we get into the exciting world of new product trends, it may be prudent to understand the difference between a fad and a trend. Many organizations, in their quest for being first into the market, pursue fads. This could either be due to insufficient data ,and/or due to the lure of the hugely increased margins that are associated with fads.
It does not take much to spot a fad and distinguish it from a trend. A fad is generally characterized by its sudden appearance and subsequent growth. When this happens, you can rest assured that it will disappear just as quickly. It is not always a bad business decision to cater to a fad, but businesses that choose to do so must be acutely aware that this requires rapid decision-making, short lead times to launch, and should be done with minimal investment in fixed-cost and brand-building expenses. If these businesses pursue fads, they should do so with the knowledge that the promise of huge gains in volume, margins and profits come only with perfect launch timing, and are extremely short term. The Atkins diet, and the low-carb craze that it created, is a perfect example of a fad.
A trend, on the other hand, is much slower in its buildup. The initial momentum has a multiplier effect; and over a period of a few years becomes a significant factor that impacts consumer behaviour and purchase decisions across an increasingly wider audience. Unlike a fad, a trend creates permanent change in behaviour, and those businesses that are the first to spot these and create offerings that cater to them are the ones that will benefit in the long term.
Understanding consumers in their current state is in itself a complex task, and most consumer goods companies continue to master techniques that enable them to get this right. This includes being able to understand consumer needs, motivations, attitudes, habits, media consumption, lifestyle, perceptions, background…. the list is endless. And what makes this even more complex is the fact that it is constantly changing. In Canada, this change is compounded, because it is impacted by normal changes in demographics coupled with the increasing rate of immigration.
In broad terms, food trends in Canada can be classified into four groups: convenience, health, pleasure and value. Whilst all of these could be true even at a global level, Canada displays certain nuances within each mega trend that will be critical for members of the food industry to identify.
Convenience and Health: Canadians are strapped for time, increasingly double-income families, with rising rates of diabetes and cholesterol. We are a nation that is aging, while becoming rapidly more diverse than similar. Pleasure: Currently, Canada enjoys economic growth with the increasing need to indulge, pamper and reward that comes with such success. Value: However, there remains a vast majority who want to be able to get the best value for every dollar they spend.
This wide, varied and rich social canvas provides a challenging task for any food business. Those that continue to stay on top of these trends, constantly addressing them — efficiently and rapidly — will be the ones that survive and grow in the increasingly competitive corporate world and with an extremely demanding and diverse set of consumers.
“The future will be determined in part by happenings that it is impossible to foresee; it will also be influenced by trends that are now existent and observable.” Emily G. Balch.
Vikram Verghese is Marketing Manager for Puratos Canada. Contact him at firstname.lastname@example.org.
See our December issue for more on the Innovation Centre and how Puratos uses it to keep its company at the forefront of its customers’ minds in innovation.