New reach channels and offer of FMCG company
How to go beyond the competitive FMCG market?
Scope: Strategic analysis, ideation, business model, value proposition, market and financial validation
Industry: Fast Moving Consumer Goods
Duration: 5 months
Executive summary
Challenge
- Strongly competitive market in the FMCG category - the fight for the consumer and space on the shelf
- Need to move away from typical sales channels and create a new value proposition to ensure revenue growth and profitability
Actions
- Competitiveness and offer analysis
- Team generation of concepts for new business models
- Strategic choice of concepts
- Market tests with clients and partners
- Development of P&L financial forecasts
- Recommendations of models and action plans for each of them
Results
- Two selected concepts with innovative reach channels and products from outside the FMCG market
- Confirmed high sales attractiveness and uniqueness of the offer
- Implementation requirements
- Financial plans
- Cooperation with a partner of a new reach channel
- Test pilot solution
Service description
We implemented the project in 4 phases:
1. developing areas with the greatest potential for change based on strategic recognition of the current model and market environment.
2. ideation and prioritization of the concept of new business models.
3. validation of the market and financial potential of new concepts and the selection of the most promising ones based on management criteria.
4. description of key conditions and implementation parameters for each of the models.
1. developing areas with the greatest potential for change based on strategic recognition of the current model and market environment.
2. ideation and prioritization of the concept of new business models.
3. validation of the market and financial potential of new concepts and the selection of the most promising ones based on management criteria.
4. description of key conditions and implementation parameters for each of the models.
Our client
A large company from the Fast Moving Consumer Goods (FMCG) industry, a leading producer of renowned brands of sweets and snacks. Its products can be found in every FMCG retail channel in Poland, from small shops to the largest retail chains.
Challenge
The struggle for a place on the store shelf and the high marketing competitiveness of reaching consumers in the saturated FMCG market made it difficult to achieve the profitability of the current business model in relation to the expected goals.
It was necessary to develop a new development concept that would allow the use of marketing, organizational and production synergies and would lead to a much higher profit per category within 3 years.
It was necessary to develop a new development concept that would allow the use of marketing, organizational and production synergies and would lead to a much higher profit per category within 3 years.
Our goals
Our objectives were to define, together with the management, strategic market opportunities and to develop and select new business models for one newly introduced category.
In the project, we were supposed to validate them on the market with clients and determine their business justification in relation to strategic and financial criteria.
In the project, we were supposed to validate them on the market with clients and determine their business justification in relation to strategic and financial criteria.
Key actions
Based on analyzes of the current business, its competitiveness, megatrends and inspirations from other industries, we have generated many new possible value propositions as a team. We then selected those that met the agreed strategic criteria.
We conducted market tests.
For some concepts, the key was to quantify the potential of the value proposition for consumers, for others we established a relationship with a business partner to check interest in cooperation and determine purchasing indicators and product requirements.
Taking into account operational and cost parameters, we developed P&L financial plans and determined necessary investments.
Confirmation of market interest and commercial viability were the basis for recommending two business models and their implementation conditions.
We conducted market tests.
For some concepts, the key was to quantify the potential of the value proposition for consumers, for others we established a relationship with a business partner to check interest in cooperation and determine purchasing indicators and product requirements.
Taking into account operational and cost parameters, we developed P&L financial plans and determined necessary investments.
Confirmation of market interest and commercial viability were the basis for recommending two business models and their implementation conditions.
Results
The company’s management board accepted our recommendations for a strategic development plan of one category that met the strategic, operational and financial management criteria. A market pilot test of the model with a new reach channel and an innovative consumer value proposition is planned for the next financial year.
Advanced talks have been initiated on the implementation of a new channel to reach consumers for the second category, using production synergies and cooperation with a business partner reaching consumers directly across Poland on a daily basis.
Advanced talks have been initiated on the implementation of a new channel to reach consumers for the second category, using production synergies and cooperation with a business partner reaching consumers directly across Poland on a daily basis.
Client benefits
Our client received not only concepts of new directions of action going beyond the competitive channels of reaching the FMCG industry, but also evidence that customers and partners are interested in them, and calculations indicating that they will help achieve the assumed financial goals. Thanks to this, the client can take advantage of the opportunity to build a new strategic positioning of the product category, and cooperation with a partner can bring quick business benefits.
Innovative, market and financially validated business models are an opportunity for strategic competitive development of the company with the maximum use of its competences and market and operational synergies.
Piotr Dreszer
| Project Manager, Innovatika
Summary
Entering the market with a new product category where competition is very intense is often associated with low profitability. The traditional increase in the marketing budget works in the short term and does not bring the expected results.
It is worth looking for solutions where no one from the competition has yet been found. Where we can offer consumers completely new experiences and a new value proposition.
And by working on new business models for one product category, we often discover opportunities for other categories which can significantly increase the benefits of working on innovations.
It is worth looking for solutions where no one from the competition has yet been found. Where we can offer consumers completely new experiences and a new value proposition.
And by working on new business models for one product category, we often discover opportunities for other categories which can significantly increase the benefits of working on innovations.
Let’s do great things together
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