Penetration Propels Expansion

Penetration is The Key Driver For Future Brand Growh

With heavy buyers driving 60% of current sales, it is important to keep existing customers happy. Despite the importance of customer loyalty, it is intriguing to note that existing buyers and repeat business does not appear to be the main driver for future brand growth.

In a recent study, Trinh, Dawes and Sharp (2023) have demonstrated a staggering 66% of the future growth comes from non-buyers. This finding aligns with the well documented double jeopardy law, asserting that smaller brands have fewer buyers which on average are less loyal to the brand.

Further, Ataman, Mela & van Heerde (2008) have shown that distribution breath (54%), displays (20%), and share of assortment (9%) are the most effective levers for growth potential, overshadowing the impact of price (5%) and discounting (2%).

So if you are contemplating how to best grow your brands, try investing in activities that are aimed at increasing penetration, like improving brand distribution, the deployment of second placements, and growing the share of shelf.

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Author

Pim is the co-founder of RGM Consulting and a core member of the global executive leadership team. In the leadership team he oversees: sales, research & knowledge development, marketing, and delivery.

Pim has extensive experience supporting leaderships teams across the globe, having worked on projects in Europe, Latin America, and Africa. Through his work, Pim has developed expertise in revenue growth management, business turnarounds, innovation management and marketing. Furthermore, he has deep expertise in the consumer goods industry.

Expertise

    • Revenue Growth Management
    • Business Strategy & Transformation
    • Business Turnaround
    • Innovation Management

Education

    • Master of Philosopy in Business Research (graduated cum laude)
    • Master in Business Administration (graduated cum laude)

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