SOURCE: The Boston Consulting Group

The Boston Consulting Group

September 28, 2015 11:39 ET

Conventional Wisdom Says Customers Are Fickle and Unpredictable; New Book From The Boston Consulting Group Says You Can Predict Consumer Behavior if You Just Ask the Right Questions

Instead of Focusing on Demographics, Companies Can Unlock New Growth by Looking at "Demand Spaces": The Emotional Moments When People Choose Products

BOSTON, MA--(Marketwired - Sep 28, 2015) -  Conventional wisdom says consumers are fickle, inconsistent and unpredictable.

But that's not true, according to a new book from The Boston Consulting Group (BCG). Companies will discover that consumers are perfectly consistent and easy to understand -- in ways that unlock new growth opportunities for brands. All companies have to do is ask the right kinds of questions, questions that identify what really drives choice. Companies that understand how and why consumers make choices can build a market map of "demand spaces" and drive towards breakout growth.

That's one of the key points in Rocket: Eight Lessons to Secure Infinite Growth, a book co-authored by BCG Partners Michael J. Silverstein, Dylan Bolden, Rune Jacobsen, and Rohan Sajdeh that will be published by McGraw-Hill in October 2015.

According to Silverstein, too many companies buy into conventional wisdom about consumer fickleness and unpredictability because they ask conventional questions that lead to uninformative answers. "They obsess about demographics," Silverstein says. "They think the critical factor is that the consumer is a 30-something woman or a first-generation American.

"What they should look at instead is emotional and functional needs -- what do consumers really want, and when and why do they want it?"

The answer is to focus not on demographics but on demand spaces -- the context or emotional moment when a consumer makes a choice. "If you look at demand spaces, you will find that consumers are absolutely consistent and predictable," Sajdeh says. "And you can use that insight to identify new connections among your products and services and new opportunities to sell them."

The book describes how PepsiCo used BCG's Demand Centric Growth methodology to create a new demand-space "map" of their consumers -- and spark fresh growth for Frito-Lay. The company discovered that the market was divided into 10 unique demand spaces when consumers chose snack foods, including "Fun Times Together" (how people snack at parties and gatherings), "Young and Hungry," and "Family Fun."

Frito-Lay saw that each demand space was an occasion when people wanted and needed to snack. And in each demand space, people reached for a range of snacks. Consumers in the "Fun Times Together" space didn't just eat Lays Potato Chips -- they also ate Hot Pockets, food from McDonald's, pizza, cookies and Snickers bars.

PepsiCo discovered two things -- one, Frito-Lay wasn't just competing against other salty snacks, and two, their products were overlapping and cannibalizing each other.

The solution? Point different products at different demand spaces, bundle some of them together, and create new variations that fit the demand. Tostitos Cantina -- a bundle of four chip-and-dip products -- was marketed to the "Fun Times Together" space. Frito-Lay partnered with Taco Bell to launch Doritos tacos into the "Young and Hungry" space. Each became a runaway best-seller that created new growth for Frito-Lay.

Rocket tells the story of many companies that have mastered Demand Centric Growth because they thought about consumers the right way. They:

  • Looked at the choices consumers were actually making.
  • Identified the emotional and functional drivers behind the choice.
  • Used that understanding to identify the real triggers for the choice -- for example the fact that they were having a party, coming home from school or trying to get through the workday in the case of Frito-Lay.

"Identifying demand spaces is a game changing opportunity," Bolden says. "When you look at consumers in demographic terms, their choices don't make sense -- they're confusing and hard to figure out. But if you look at them in terms of the emotions and contexts with which they connect with your offering, you'll find that their needs are predictable and deeply rooted. Once you know those needs -- once you know the emotions that drive what they spend on and what they love -- you can use that information to make sense of your business and unlock growth you didn't previously know was there."

To order a copy of the book, click here.

To join in on the conversation, use the hashtag #RocketToGrowth.

For more information, or to schedule an interview with Michael J. Silverstein, Dylan Bolden or Rohan Sajdeh, contact Katarina Wenk-Bodenmiller of Sommerfield Communications at +1 (212) 255-8386 or katarina@sommerfield.com.

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