Thanks to Professor David Aakers, Blueberry preaches Relevance over Preference to our clients.
- Relevant organizations are obsessed with evolving customer behavior. They identify and act upon the new factors customers and non-customers are willing to invest in to experience value.
- Those marketing Preference go head to head only with competitors in their sets and along factors assumed (often incorrectly) as important to customer groups.
Most in the food industry still compete on Preference and are likely heading toward decline.
A few compete on Relevance. They will surely survive and shape the future.
To food & beverage CEOs, questioning their organization’s relevance may seem absurd. But the relationship between manufacturers and customers is broken. Executives generally cannot name today’s 8-10 new factors creating customer value. As a result, strategies, plans, innovation, hiring and other business practices are built on quicksand.
While Relevance has soup-to-nuts business application, consider the example shared by Professors W. Chan Kim and Renée Mauborgnein, founders of Blue Ocean Strategy, in the development of a product: Yellow Tail wine.
To non-wine drinkers and younger consumers, wine is confusing and pretentious: descriptions, aging, prestige of vineyards, types of grapes. Wine makers John Casella and Peter Deutsch could have assumed these were relevant factors when setting out to find another place to play.
Instead, they busted assumptions and identified new factors relevant to many wine and non-wine drinkers.
Yellow Tail offers only Red and White varieties. Laid-back, sweeter, easier to purchase, alive and fun. Casella and Deutsch captured a large pool of new followers from two non-customer groups: millions of soft drink and water drinkers.
Same thing happened when Cirque du Soleil converted circus lovers from Barnum & Bailey, theater-goers and TV couch potatoes.
You get the picture. Retail CPG companies have gotten the picture. Foodservice is in the early stages of getting the picture.
Manufacturers are at a crossroads with a choice to make: Relevance or Preference? Shape the future or risk oblivion?