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Consumer Product Market Penetration is Much Easier If Exclusivity Is Key to the Lines Branding Strategy

by: Geoff Ficke

Consumer Product Market Penetration is Much Easier If Exclusivity Is Key to the Lines Branding Strategy

Recently I had the opportunity to visit and work several Trade Shows while on an extended business trip through Europe. One was a huge Beauty Product expo in Italy, another a jewelry fair in Switzerland, and a Gourmet Food Show in England completed the itinerary. Each of the venues would be considered apex convocations within their industry space. Each offered a range of products touching many price points.

As any consumer of economic news knows, today Europe is struggling and in a severe commercial downturn. Consumers are caught in a severe pinch between sky high government taxes and budget deficits, slowing growth, job losses and a real decline in personal incomes. The fear is palpable in many obvious ways, even to a foreign traveler.

And yet, the Trade Shows I attended were each doing their most brisk commerce in the categories that offered the more expensive, exclusive product offerings. I queried any number of vendors from across a broad range of retail price positions. Inevitably the higher end products on offer reported that they were doing well. The mid-market brands seemed to be suffering most. The mass market lines were of course also doing well as many middle class shoppers were trading down in these uncertain times, although many mentioned that they were cutting margins to maintain market share.

It is a fact that in many product categories, exclusivity as a marketing strategy can be an easier route to store shelves than almost any other model. In higher-end markets there is less pricing resistance, and thus greater opportunities to enjoy fatter profit margins. Competition can be much less severe. Obstacles to gaining distribution are much less in specialty
stores and boutiques than exist in chains and mass market discounters.

Pet products that cater to passionate owners often seem eccentric. Jewelry, cashmere sweaters for dogs, Halloween outfits for cats and luxury pet beds seem extreme. But, they sell. A visit to any Pet industry Trade Show will confirm this fact.

Cosmetics, Jewelry, Couture Fashion, Footwear, Automobiles, Gourmet Foods and Drinks, Electronics, Luggage, and many other product categories that provide exclusive brands are booming. Brands in the mid-market range are being squeezed. Private label offerings are picking up market share, though margins are squeezed in order to lower and hit needed price points.

The market for Skin Care products priced over $100 per ounce is sizzling. Gourmet Food brands are enjoying a golden age thanks to the popularity of celebrity chefs and food networks. Jimmy Choo and Manolo Blahnik, among other show designers, have elevated more than the heels on their products. An order for a new Ferrari or McLaren sport car, paid up-front with cash, will earn the buyer a spot on a waiting list with a 2-year wait for delivery of their vehicle. Every Hermes Birkin bag is pre-sold each season before the purses ever hit store shelves. The valet parking concession at Harrods and Harvey Nichols in London is constantly backed up with a constant cue of chauffeur driven Rolls Royce and Bentley automobiles.

Launching Consumer Products with an Exclusivity distribution Marketing Strategy and Sales Model is a course we often we choose for client projects. Once a market has beenĀ  penetrated, and consumer demand is stimulated for a product it is always an option to replicate the item in a lower price point presentation. You can always come down in price.