It may seem counterintuitive, but the ultra-premium market in nearly every consumer good is flourishing. It is continuing proof that during tough economic times that both the low end and the high end of any commodity or service seem to thrive, while the middle is squeezed at every turn.
Current sales statistics in the foodservice industry prove this concept as well. But as a manufacturer, it is risky to address only the low or high end during this temporary correction, so what is an organization to do?
It discusses the Mars company’s lavish introduction of the new “M&M Premiums” product this week. A current trend and a common theme, Mars “premiumized” their ubiquitous M&M candies with new packaging, product, and varieties of M&M candies. The article further outlines some of the current statistics --- and global issues --- driving this trend.
All well and good, but what does this mean to me? I make a good product, at a good price, and sell it into that “middle segment” whose sales suck right now. How does this work for me?
The premiumization concept should be thought of on a continuum. Any product at any level can be “tweaked” to “raise its value” to the user. But the introduction of a new product would require significant investment in development, marketing, and sales effort to before the producer would see a pay off in sales. Perhaps a more logical effort could be investment in a range of “premium-style” menu applications for all of your mid-scale segments, along with access by authorized small chains to your menu development resources to customize and premiumize some applications for them alone.
If you sell chicken, for example, develop exotic and interesting “premium-positioned” sandwiches like Thai or Greek-influenced applications using easily-sourced sauces, condiments, or breads. Smart marketers may also want to establish alliances with complimentary producers to work together on this strategy (i.e. source a good sauce company and an artesian bread maker for a combined effort to market the application in our example).
Support these new and interesting menu applications with a strong communication plan, field and agency training effort, and a range of PROMOTIONS to encourage distributors and operators to advertise or menu these ideas.
The bottom line is the “bottom line”: When an operator is struggling, they want to give their patrons something NEW & DIFFERENT, that PROVIDES VALUE. Smart premiumization accomplishes all three. The added benefit is that you have firmly established yourself as a resource to your channel partners. They will not forget that as the economy improves.
“… nobody likes to look like everyone else or consume the same way. The result is what marketers call ‘differentiation frenzy.’ It’s particularly acute because, in a post-ideological world, who you are is defined less by what you think…than by what you purchase and eat.” --- Roger Cohen