Would you like to increase the penetration of your brand, but you don’t know exactly how? Sampling can be a good strategy to increase brand penetration. There are still options for sampling during this pandemic. By distributing free samples through an activation agency, the number of households trying the product can be increased. Another advantage of sampling is that the attention to the product and remembering the specific characteristics is relatively high when testing a product.
Most FMCG marketers are aware that penetration is one of the most important criteria for a brand. But knowing that the biggest brands have the most buyers, and attracting more consumers is the best way to grow, is not enough. We need to understand how decisions are made by consumers, where they are influenced by the huge number of brands available to them and the multitude of advertisements to which they are exposed.
Are you curious how you can grow your brand? Discover here the different ways to increase brand penetration.
Brand penetration as a growth strategy
Brand penetration is defined as the percentage of households in a market that buys a certain brand in a certain year. There is a simple rule that successful brands follow: it’s all about increasing household penetration. Loyalty levels within a product category can be extremely similar – and generally low – for all brands. And although loyalty between product categories does not vary significantly over time, household penetration does. Brand penetration as a growth strategy is very effective in providing faster growth in brand value.
Promotions and advertisements
When a brand offers lower prices than its competitors, consumers tend to switch to this brand more quickly. Lower prices are linked to higher growth and the more reasonable the prices, the greater the impact. However, according to Fraser McKevitt and Matthew Botham of Kantar World Panel there is evidence that price promotions have no effect in the longer term. When the price promotion stops, the consumers go back to the competitor.
Note: one brand lowers the price of its products and other competitors quickly do the same, which in turn lowers the industry price for that product, and brands can sometimes make marginally low profits or even losses.
Over time, advertising generates more awareness, brand preference and trust in the brand. Also, with reduced prices and aggressive advertisements, products from that brand often sell more. With more sales, the brand compensates for the lowered prices of its products and makes even more profit than before.
Nevertheless, the effect on advertising is minimal in the short term. Advertising alone does not create the conditions for brand growth. However, advertisements can help lay the foundation. It is generally accepted that this, together with the increasing availability in the store, will have a much greater impact.
Long term investment
To achieve success, brands must focus on the long term. Unfortunately, few brands choose to make plans for longer than the next 12 months. In addition, a lot is being adjusted in the meantime, such as the advertising strategy, instead of continuing to follow the existing planning. These brands run the risk of losing to competitors who stick to a plan to increase penetration slowly and steadily (Forbes).
In the meantime, it is difficult to increase penetration, also because of another critical performance indicator: brand consideration (the percentage of consumers who would consider your brand for a particular occasion). According to Forbes, the increase in penetration is dependent on constant consideration of the consumer’s consideration. Earning brand consideration and penetration requires investment in key brand assets: memory structures and product portfolios.
Building memory structures means anchoring a brand in the long-term memory of consumers, using the full range of touch points. Broadcast messages from a brand wide enough to be heard by the largest possible group of consumers. To get into the minds of consumers – and stay there – successful brands articulate messages that are clear and memorable.
Product Portfolios: Too many brands and SKUs can lead to ineffective advertising levels, customer confusion, and other misery affecting penetration. Surprisingly few innovations ultimately result in increased penetration. Hero SKUs generate higher volumes that increase the scale, leading to larger margins that allow investments to stimulate growth. Successful brands are constantly investing in their hero SKUs to continue to build on their success.
Fighting competition through sampling
Instead of focusing on upselling to more regular buyers, brand managers can better focus on the rare buyers. Market penetration encourages loyal customers of other brands to experience the products of this brand once. Let non-users get to know your brand through sampling. Lime Factory can help you find the right channels for your target group. What do you think of butter at the bakery or a snack with every online purchase? There are of course a number of options available. We will find suitable channels together with you. This strategy gives you the opportunity to capture those loyal customers and become the market leader. Below you can see the penetration before and after after a sampling campaign.
There are numerous strategies and tactics for brand penetration. However, these tactics are best implemented when you use multiple tactics together.
Sampling campaign at Lime Factory
Would you like to increase the penetration of your brand? At Lime Factory we can help. Do you want more information about our approach or do you have a question? Then please contact us.