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A real example of why Trade and Shopper Marketing must play an important role in product innovation processes

Updated: Mar 18

You better know the story of Justin, the man who sold his little brand at 286 million dollars.

justin trade marketing innovation

Thousands of products, be they new brands or just line extensions, are launched on the market every year, but only a few manage to survive more than a few months. The high level of failure can be associated with different causes; lack of a clear differential with competitive brands, low level of marketing investment, or simply the product not liked. In this article, we describe the critical reasons why Trade and Shopper Marketing must play an important role in product innovation in your company.


INNOVATE SO THEY SEE YOU

Some new market studies show that most new products with low initial sales and consequently very low levels of space participation at the point of sale fail to take off simply because shoppers do not see them. We can say that they are invisible.


HOW SHOPPER WILL BUY YOU IF THEY CAN'T SEE YOUR PRODUCT?

The points of sale are saturated with thousands of SKUs. The brands and presentations with the highest sales participation will always have a greater opportunity to be seen and therefore considered and ultimately purchased.


Even new brands that have been bought by shoppers before, possibly motivated by some type of activation (sampling, tasting, impulse, etc.), are not remembered in the next purchase. The only chance to at least be considered again is to be seen.


But we insist that shoppers do not browse through all product alternatives on every visit. They mostly repeat with products that fulfill their expectations, mission, and needs.


The same market studies mentioned above show us that the only way to increase the levels of consideration is by significantly increasing the levels of ATTENTION and SURPRISE.


Yes, I know it sounds obvious, but it is the reality. But also, although it is easy to say, it is for most companies, quite difficult to achieve.


justin trade marketing innovation

A SUCCESS STORY: LEARNING FROM JUSTIN.


Justin Gold, Founder of Justin's Peanut Butter, quickly understood the problem he was having with his new brand of peanut butter, from the first weeks after its launch in mid-2003 in the state of Colorado (United States). Despite being a product of the highest quality and the first artisanal and organic brand in the category, nobody was aware of its existence at the points of sale (which is normal, as we said before).


Justin Peanut Butter was released in a 28-ounce jar like the ones the rest of the relevant players in the category had (Jif, Skippy, Peter Pan, etc.).


PACKAGING INNOVATION TO BE SEEN


Perhaps without having much information on consumption habits or purchasing behavior in the category, Justin ventured into the market by introducing new packaging.


The first thing he launched were individual sachet-type packages, initially designed for campers, people on diets, or simply those looking for an energy boost. However, he proved to get a lot of interest (especially because they generated a lot of ATTENTION AND SURPRISE) from mothers concerned about family health.


In a short time and without having thought about it initially, the sachets became an excellent alternative for children's snacks at school. This success helped them grow in the category, both with the sachets and the 28oz bottle, and achieve higher levels of space in the POS.


WINNING SPACE IN THE CATEGORY

Justin quickly knew how to get ATTENTION and SURPRISE in the category, and while competitors continued to gloss over Justin's Peanut Butter, Snacks and Protein Bars were introduced allowing him to not only widen his space in the category but also enter premium locations, expanding towards cash registers (impulse) and the gourmet section.


He additionally began introducing disruptive variants to peanuts, such as hazelnuts and almonds, giving the brand a new impetus and clear leadership in the organic (premium) segment of the category.


While he was introducing these innovations, the product was gaining brand awareness and also growing in the 28 OZ “mainstream” presentation. That irrelevant presentation which was hardly seen at the beginning of this story, began to obtain between 15% and 20% of the space in important supermarket chains, such as Whole Foods, in a short time, despite being a high-priced brand.

trade marketing innovation


BUSINESS EXPANSION TO NEW CHANNELS (ON-PREMISE & SPECIALIZED)


The individual presentations also showed great strength, penetrating the convenience channel, specialized stores (organic products, campervan stores), and even the HORECA channel (Consumption channel: Hotel, Restaurants, Bars, Coffee Shops, etc) with tailor-made presentations for Starbucks.


Being the only Peanut butter brand in these stores, at least for a short period, especially with individual presentations, generated significant levels of brand awareness and trial levels, increasing market share and obtaining the consequent greater share of space and visibility in the channels.


In May 2016, Justin's was sold to Hormel Foods for $286 million.

CONCLUSION

New or even not-so-new brands, but with low levels of market share and consequently irrelevant to retailers, have a major problem with visibility and ensuring availability in the market. Consumers and/or shoppers simply do not see them…and if they do not see them, they cannot be considered to be finally purchased.


The development and design of brands and packaging continue to be a practically exclusive function of Consumer Marketing, where in many cases they demonstrate a good understanding of the consumer and his behavior, but little knowledge about the points of sale and the shoppers who visit them.


Trade Marketing must play an important role in product innovation processes, bringing to the design table, opportunities beyond those of consumption (consumer). Deep knowledge of the characteristics of the channels, performance of own and competitive brands, measurement and control of the picture of success, the behavior of the shoppers in each of the channels and store formats, and a lot of common sense (such as what seems to be applied by Justin Gold) are essential to increase the results of our brands in the market.


If you need help to improve attention and surprise and therefore visibility of the brand, write to us and we will talk about it. You may also be interested in learning about TMC's consulting or training products in this area. Please get in touch with us and we will contact you immediately.


 




Written by Juan Manuel Domínguez R. CEO of TMC Commercial Consultants. If you are interested in learning about TMC's consulting or training products in this matter, write to us at contacto@tmcconsultores.com and we will immediately contact you.


If we are not yet connected on LinkedIn, it will be a pleasure to have you in my network of contacts https://es.linkedin.com/in/juanmanueldominguezr 


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