The secret lives of category leaders

Top-selling brands enjoy perks, but they also face challenges
1/27/2015

Hockey players dream of winning the Stanley Cup. For tennis players, it’s to be champion at Wimbledon.

But for CPG brands, the ultimate goal is to become category leader.

Top-selling brands in any category enjoy certain perks that lesser brands do not. Among these: better bargaining power with retailers, price-setting influence and the ability to sway product trends.

But not all category leaders are the same, says Virgilijus Narusevicius, senior data scientist with Euromonitor. Narusevicius recently examined category leaders worldwide, their market share and their challenges to grow, in an article posted on Euromonitor’s blog.

Among his findings: category leaders' share varies greatly by aisle and country.

Outside booze and tobacco, soft drink category leaders have the highest market share, at 55%. Hot drink leaders enjoy 42% and packaged food leaders have 39%.

Among countries, Procter & Gamble has an enviable 60% share on laundry detergents in the U.S. But in Brazil, Unilever is the category leader for deodorants with just 39% share.

Being on top comes with downsides, Narusevicius points out. One is that, after a while, consumers want more choice and “will reward new and smaller companies over established and familiar ones.”

Also, brands that dominate a category have to spend more to acquire additional market share.

As Narusevicius writes: “After a certain point, diminishing returns begin to appear, and the costs of chasing additional market share may outweigh the benefits derived from it."

Read the full story here.

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