Expanding Brand Penetration through Innovations in Consumer Goods

Byron Sharp, in his book How Brands Grow, challenges several principles of traditional marketing – one of the most important being the concept of consumer loyalty. Sharp argues that, contrary to what was once believed, most consumers are not that loyal to any brand. In practice, if a product is unavailable on the shelf, the consumer will rarely go out of their way to find it elsewhere; they simply choose another brand that fits the moment. This reveals that, instead of loyalty, consumers operate with "purchase repertoires": a set of brands they consider at the moment of purchase.

For brands, being present in these repertoires is crucial. This is why household penetration (the number of households purchasing a brand) becomes an essential metric for success in the consumer goods market, surpassing loyalty metrics. We have seen over and over, across countries and categories, that the only predictor in market share changes is variation in household penetration.

Here, innovation becomes a powerful strategic tool: when well-executed, it expands the purchase repertoire, attracting new consumers and increasing brand penetration.

Innovation Cases: When Strategy Works (or Doesn’t)

A few examples illustrate how innovation can expand a brand's repertoire – or, if poorly planned, simply redistribute consumers without real gains in penetration:

• Skol Beats: Expanded the Skol brand’s portfolio to new consumption occasions, attracting consumers who might not have chosen the original brand. Skol Beats connected with a younger audience and different consumption moments, establishing a new repertoire for the brand. ✅

• Skol Puro Malte: The launch of Skol Puro Malte aimed to expand penetration but ended up cannibalizing the brand’s main audience. The result? Eroded margins and few new consumers. ❌

Successful Innovations Across Categories

In recent years, some brands have stood out by breaking barriers and innovating, increasing their penetration by occupying previously unexplored spaces:

• Affordable Aerosol Deodorants: In the deodorant market in Brazil, there was a clear partition between roll-ons (cheaper) and aerosols (more expensive). Coty launched a more affordable aerosol deodorant, creating a new market space and attracting consumers who previously chose roll-ons. Unilever followed with a new brand focused on this accessible segment, solidifying the new repertoire.

• Entry-Level Hair Masks (Skala): Skala challenged the logic of the hair care market by entering with affordable hair masks, instead of starting with shampoos and conditioners. This strategy allowed Skala to win over a new audience, establishing a presence in a category that was still underexplored by affordable brands.

• Coffee Capsules (Nespresso): Before the popularization of coffee capsules, home coffee consumption was dominated by ground coffee and beans. Nespresso innovated by creating a premium, convenient experience for home consumers who wanted high-quality espresso without the complexity of traditional machines. This innovation transformed the home coffee market, creating a new consumption repertoire and making capsules a popular and convenient choice.

Implications for Innovation Strategy

To innovate effectively, it’s important to think beyond product features and focus on how it can access new consumption repertoires. This can involve:

• Creating Products for New Consumption Occasions: Explore different use contexts and create products that expand the brand’s presence in these occasions.

• Expanding into New Price Ranges: As in the case of the affordable aerosol deodorant, adjusting the price to increase accessibility without compromising the brand’s perceived value.

• Reconfiguring the Category: Innovations like Skala’s have shown that product strategy can transform consumer expectations and habits within a category.

In an increasingly competitive consumer goods market, innovating with new consumption repertoires in mind is not just an advantage – it’s a necessity. By expanding the context of use and connecting with new consumers, brands can increase their penetration, strengthening their presence and relevance.

Contact us at contact@insignia.partners and find out how we can contribute to the success of your strategy.

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Bruno Bullio

Associate Partner

Bruno brings 15 years of experience in strategic consulting, specializing in retail and consumer goods, with a strong track record across Brazil and Latin America.