Defining brand growth as capturing market share from competitors is a self-limiting approach, according to the Institute for Real Growth, a study led by WPP’s Kantar Consulting.
The next threat to a brand may not come from its biggest category competitor, but from an inventor in their garage, the latest viral Kickstarter or a social media sensation.
The research, which included more than 550 interviews with senior marketers and over 1500 survey respondents across 73 countries, notes that overperforming brands regularly redefine their category to chase new long-term growth and avoid stagnation. They view their markets in an abundant manner.
85% of respondents from companies overperforming on revenue growth agreed with the statement that their company is (very) good at assessing and understanding where the market will go, while just 33% of revenue growth underperformers believed the same. Underperformers also tend to stay focused on increasing market share alone: 55% of revenue growth underperformers agreed that was the case at their company, compared to 44% of overperformers. In this area, there are clear differences between revenue growth overperformers and those brands with room to improve.
By taking a wide-angle lens on their category, overperformers expand their vision beyond just the products or services they currently have, to how they can meet the needs of a much broader audience. It’s not just about understanding the latest trends but building entirely new category opportunities. This approach can not only insulate against the inevitable shock of disruption, but also position the company for long term growth.
For example, if a brand has 27% market share in their specific sub-category, there’s probably limited prospects for significant growth. But if a brand expands the category definition – for example, considering products available in the category on Amazon or even on Kickstarter – this redefines their market share and creates a whole new battleground in which the company can compete. This is a mindset that growth leaders bring: they define and re-define their category so they can be one of those small, hungry, 3% market share players capable of great growth.
Mars is one such example: it evolved from pet food supplier to holistic pet care by acquiring the largest veterinary chain in the US. Likewise, Adobe – formerly best known for its creative products – re-centred its company on marketing delivery solutions, including the acquisition of Marketo. In doing this, the company successfully expanded to a whole new audience.
But it’s ‘staying the course’ that ultimately defines the brand overachievers from the underperformers. Having faith in the long term plan is a notable quality of revenue growth overperformers: 72% of overperformers agreed that they stay consistent on the big bets their company makes. Only 38% of revenue growth underperformers believed the same.
Google Glass was a fleeting trend. However, Google’s big bet wasn’t Google Glass, it was Augmented Reality. The new AR features combine Google’s existing Street View and Maps data with a live feed from your phone’s camera to overlay walking directions on top of the real world and help you figure out which way you need to go. It’s a lot like the promises Google had made with the original version of Google Glass, except without the need for wearing an additional AR headset. In addition to directions, the new AR mode can help identify nearby places, too, and Google is even testing adding a helpful augmented reality animal guide to lead you along the way.
Three keys to success:
- Shift investment from rationalizing the past to predicting the future.
- Second, they need to define their market so that their category share is 3% or less – regardless of company size. Remember, 30% share means there’s little room left to grow. If brands want to be hungry, they need to redefine their market so there’s always room to grow.
- And finally, define the compelling growth platforms, stick to the plan, and make sure those principles drive everything the business does.
This article was produced in partnership with Kantar Consulting.