Mondelēz innovation executive Gil Horsky challenges brand owners to fully understand what packaging “premiumization” means so they can leverage the experience for the consumer’s ultimate delight.
Global consumer branded products are facing headwinds in developed markets with rising commodity costs and retail chains becoming more focused on private label. While in developing markets, rising disposable income is accelerating the emergence of the middle class, people who expect their trusted brands to deliver experiences that are more special than before.
These macro-trends should serve as a catalyst for mainstream global brands to premiumize their portfolio. The term premiumization was coined sometime in the 1990s to open a new door in the alcohol and beverage market, redefine top-shelf offerings and provide a taste of the higher life for consumers. It is in essence the process of creating a bridge between the desirability of the luxury world and the function and necessity of the mass market.
But as more brands look to premiumize their offerings, they discover that stretching a mainstream brand upwards in an authentic and sustainable way is proving to be more challenging than expected.
Finding the convergence between these two markets demands the right kind of magic from brand owners, marketers and designers. Here are three key tips to enable global mainstream brands to premiumize their portfolio:
1. Frame of reference
When premiumizing a brand, one of the key strategic aspects to define is the frame of reference the brand wants to play in. This can be different from where it is positioned today, and the decision will impact the overall product and pack brief. A great example was when the Cadbury chocolate brand decided to enter the premium gifting space in Asia. Until then, the frame of reference for the Cadbury brand, including its gifting offerings, was limited to the confectionary category. But with the entry into premium gifting, it became clear that the frame of reference should be much broader, with extended gifting categories.
This led to the development of Cadbury Glow (see photo above), which borrowed into confectionary new visual design cues from broader gifting categories, such as liquor, perfume and jewelry. The Glow premium pack is tall and slim and, when closed, looks more like a champagne case than a chocolate box.
When the outer pack is revealed, the inner pack resembles a treasure or jewelry chest that glows from the inside out.
This extended frame of reference, translating into a premiumized proposition, enabled Cadbury Glow to gain sales from new broader gifting categories, that previously the brand didn’t have access to.
2. Consumer and market context
Premiumization is often subject to context and location, and how developed (or not) the market may already be. It’s about deep understanding of culture, to decipher the semantics and mood of what premium really means for local consumers and their mindset.
A study conducted in 2015 by BuzzBack asked consumers across several markets what they considered to be the most important attributes in determining if a product is premium. Reviewing the results might lead one to think that there are more similarities than differences in how consumers define premium, but marketers and brand owners need to delve much deeper into the real meanings of these attributes to successfully premiumize their brands.
Although most consumers prioritize “high quality” in determining if a product is premium, they mean different things across markets. In developed markets like the U.S. and U.K., hand-crafted food products equate to quality and premium. But in emerging markets like India, China and Brazil, mass-manufactured food products by large multinational companies with strict quality standards equate to quality.
3. Distinctive brand assets
The question of what premiumization means for brands is becoming increasingly dependent on drawing out the particular specialness inherent in a brand’s own equity. This is something that Professor Byron Sharp, from the Ehrenberg-Bass Institute, calls “distinctive assets.” The distinctive assets could be specific brand colors, shapes, packaging or even country of origin.
These distinctive assets need to be further stretched to convey more-specialness, and it is critical that they are at the heart of any premiumization process. Toblerone is a great example of a brand that has distinctive assets that are core to the proposition and are even further leveraged as it stretches to more premium offerings in retail channels such as Duty Free. It has a unique triangle chocolate and pack shape, uses gold on pack and identifies Switzerland as the country of origin.
As we all aspire to a better quality of life, luxury can make us feel special—because it is special. Premium-ness, as with luxury, establishes difference—our difference—but at a price we can afford and in ways that we can incorporate into our daily lives.
If brand owners can develop a truly resonant understanding of what premiumization means for them, they can use it masterfully to take their brand to a new level.
Author Gil Horsky is innovation platform lead for the Global Chocolate Team at Mondelēz Intl. Horsky’s passion is growing brands and creating innovative products that delight consumers around the globe.
Learn about the latest developments in packaging design at PackEx Montreal 2016 (Nov. 30-Dec. 1, in Montreal, Quebec, Canada).