The consumer goods sector in India and the global market has the largest share of the FMCG (fast-moving consumer goods market). It is the fourth-largest sector in the Indian economy. Food and beverages account for more than 50% of the FMCG market in India. Personal care products are at 20%, while household care products are at 10%.
While consumer durables are highly competitive, the tech-driven market has the second-highest share of consumer goods. Some well-known names in this sector are Sony, Samsung, Whirlpool, Godrej, LG, Hitachi, Blue Star, Carrier, and Haier. It is a very competitive market. Even expensive products are imported today!
What, though, are consumer goods? Let us look into it!
Consumer goods: what are they?
All finished goods that are purchased by individuals or households for personal use and not resold are referred to as consumer goods. Consumer goods are divided into two categories: fast-moving goods and consumer durables.
The United States has the largest consumer goods market, followed by China. PepsiCo, Nestlé, Proctor and Gamble, Unilever, JBS, AB InBev, Coco-Cola Company, and Tyson Foods are the top global FMCG companies.
Why is innovation important for consumer goods?
Product innovation is essential for keeping your brand shining in a crowded market. For sustainability and profitability, you should re-invent or find new feathers in the same core product. You do not need to create a new product from scratch. One can take advantage of the already established market for old products, find niche segmentation that is particularly likable, and satisfy their needs
Companies like Apple and Instagram do not release entirely new products but rather upgrade the features available with every new version. Of course, innovations are based on research for better customer satisfaction and value addition.
Improve sales and customer loyalty
With globalization, ideas are spreading like lightning. That makes customers want to try new products and have new experiences. Customers’ loyalty is shrinking with increasing options and price races. Innovating customer-centric products is something that will give a boost to sales from time to time!
Stay ahead of your competitors
When you pay attention to customers’ needs, data analytics of customer feedback and buying patterns help you improve your products or offer new features. Nothing compares to a product that satisfies all the requirements of customers. Creativity and fresh ideas give you the first-mover advantage. However, make sure innovation is based on sound research and result-oriented strategies.
Employee engagement and performance
Front-line sales executives can do the strongest marketing for your product. Employees have nothing new to sell when you do not innovate your consumer goods. After a certain point, they do not have a market to approach. In this situation, you need to give them something new to sell so that they can focus on increasing market share and also retaining old customers. New challenges keep employees engaged with the brand and pump up their performance.
How to innovate in consumer goods?
Consumer goods innovations should be based on analyzing consumer behavior, feedback, and the market’s potential to accept them.
Identify customers’ needs
Many companies do not believe in market surveys once the product has established itself well. In fact, there should be a timely schedule for doing market research. That is how you get to know genuine customer demand and feedback. The survey will reveal a common dissatisfaction among existing customers or a reason for not buying the existing products from the rest of the market. Such insights fill the gap between product and market.
Understand the sentiment
Markets often do not operate solely on traditional economic principles. There is more than just good quality, price difference, and utility. Some products can be placed simply by knowing the right sentiment. For example, Women Horlicks created a market for themselves by knowing the need for women’s health, which is being ignored in many households. Another example is Meesho! They understood the need for routine products at an economical price in the Indian market.
Recognize the changing trends
It is essential to anticipate the market trends for the product and do futuristic market research. For example, after the pandemic, people are more conscious of healthy products. So, the fried chips have been replaced with spicy Makhanas. All leading chip-making FMCG companies are selling Makhanas now! Some companies even advertised that they only sold baked food.
Coca-Cola, one of the most popular FMCG brands, developed diet coke to meet the trend of zero-sugar cold drinks among young people! It gives you insights into what type of product is going to be most liked by your customer pool, and according to that, you can create a framework for innovating your upcoming products.
Create a customer experience ecosystem
Create a customer-centric system after you have a thorough understanding of the market. You might need AI-based data analytics software that does all the market research by collecting your customers’ buying habits and tracking their overall persona with great accuracy and efficiency. It will provide you with personalized insights for each customer.
Your digital platforms must be automated so that no customer will remain unattended. Your customer ecosystem should be responsive, even for after-sales services.
What is a customer-centric approach?
The process of innovating a core product while keeping customer utility and likability at the forefront is called customer-centric approach.
Customer-centric innovation is not only about diverse product lines but also sustainable, profitable growth, which leads to achieving maximum market share and becoming a leader.
Customer-centric research helps companies continually improve their understanding of who their customers are and what they need. Customer-centric innovation focuses on developing improved methods of delivering value propositions and satisfying customer experiences.
The better you know your customers and satisfy their expectations, the harder it is for competitors to destroy your business. The process of deeply understanding and then addressing customers’ needs leads to innovation that closes the growth gap.
Customer-centric innovation strategies
To establish customer-centric innovations, there are two main strategies: offense and defense. Let us take a look at them.
The offense strategy
Establish strong bonds with core customers
Identify core customer segments and create mutually beneficial value propositions that earn brand engagement and loyalty. Develop a system where the company can reach out to the smallest group of customers and fill the gap between product expectations and products or services.
Extend the customer base
Along with the innovation in the product, you need to expand your market by finding customers who might be searching for the same product as yours. With your product innovations, enter new segments of different age groups, interest areas, and genders. The bigger your universe, the more experimental you can be.
The defensive strategy focuses on scanning for potential competitive moves that can disrupt your comfort zone in the market. Customer-centric innovation also includes keeping track of the strategies your competitors apply to the market. With it, you can not only keep yourself ahead of them but sometimes learn from their mistakes too.
Innovation is the key to reaching potential customers in the fast-paced digital market. Also, it is necessary to expand the market, escalate the need to buy products, deal with saturation situations, and eventually improve sales. Therefore, customer-centric innovation is essential for achieving sustainable, profitable growth and dealing with competitive markets effectively.