Every year for the last decade, the soft drink industry has experienced a decrease in consumption as measured by volume. This is a result of a cultural trend. A 2015 Gallup poll found that six in ten American adults were attempting to avoid soft drinks, whether diet or regular. They were making other choices such as the wide variety of teas, coffees, and waters. They were shifting their tastes.
Those who are still drinking soft drinks increasingly view them as an indulgence. The markets that are particularly concerned include moms and upper-income consumers. They want portion sizes that reflect these reduced consumption preferences.
Partly to address that situation, seven years ago Coke offered a mini-can that held 7.5 ounces along with an 8 ounce glass and aluminum bottles. The sales of these smaller sizes have been a plus for Coke with double-digit increases over the last three years. In 2015 sales jumped fifteen percent in the first five months alone.
These mini offerings are a 30% reduction in volume but an increase from 31 cents to 50 cents a can in sales. This significant increase in revenue has contributed to more than an 80% share price gain since March 2009. That has shareholders impressed.
I found this information interesting and wanted to share it with you for two reasons. First, consumers are definitely thinking small. Pay attention to the talk of downsizing and building smaller residences. Notice the suggestions of smaller portions and portion control in food consumption. Keep in mind that people are reducing their number of belongings. The trend of less being more is permeating many areas of our lives.
How is that trend impacting your business?
Second, we businesspeople are always juggling price increases, when to adjust prices, and how to present the changes. We are concerned about retaining revenue and profitability while not losing customers. Many of us are dealing with the concern by reducing the amount of product and keeping the price the same. Consumers seldom notice the reduction. If they do, some do not care that much because they don’t buy the items by the unit or pound. They buy them by the package. In Coke’s mini-can example, the company was obvious in its size change by creating a smaller can or bottle. Consumers embraced the change because they wanted smaller portions and were not sensitive to the price. They had not purchased for volume; they had bought for a small amount.
All of these considerations depend upon knowing your customers well and talking to them regularly. That understanding helps when addressing price changes. You will also be aware of trends within your target market and be able to adjust to them in ways that your customer will embrace and you will find profitable.
When was the last time you interviewed your customers?
This week's marketing trivia challenge is How has talking to your customers helped your marketing? E-mail me your answer.
Those who are still drinking soft drinks increasingly view them as an indulgence. The markets that are particularly concerned include moms and upper-income consumers. They want portion sizes that reflect these reduced consumption preferences.
Partly to address that situation, seven years ago Coke offered a mini-can that held 7.5 ounces along with an 8 ounce glass and aluminum bottles. The sales of these smaller sizes have been a plus for Coke with double-digit increases over the last three years. In 2015 sales jumped fifteen percent in the first five months alone.
These mini offerings are a 30% reduction in volume but an increase from 31 cents to 50 cents a can in sales. This significant increase in revenue has contributed to more than an 80% share price gain since March 2009. That has shareholders impressed.
I found this information interesting and wanted to share it with you for two reasons. First, consumers are definitely thinking small. Pay attention to the talk of downsizing and building smaller residences. Notice the suggestions of smaller portions and portion control in food consumption. Keep in mind that people are reducing their number of belongings. The trend of less being more is permeating many areas of our lives.
How is that trend impacting your business?
Second, we businesspeople are always juggling price increases, when to adjust prices, and how to present the changes. We are concerned about retaining revenue and profitability while not losing customers. Many of us are dealing with the concern by reducing the amount of product and keeping the price the same. Consumers seldom notice the reduction. If they do, some do not care that much because they don’t buy the items by the unit or pound. They buy them by the package. In Coke’s mini-can example, the company was obvious in its size change by creating a smaller can or bottle. Consumers embraced the change because they wanted smaller portions and were not sensitive to the price. They had not purchased for volume; they had bought for a small amount.
All of these considerations depend upon knowing your customers well and talking to them regularly. That understanding helps when addressing price changes. You will also be aware of trends within your target market and be able to adjust to them in ways that your customer will embrace and you will find profitable.
When was the last time you interviewed your customers?
This week's marketing trivia challenge is How has talking to your customers helped your marketing? E-mail me your answer.
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