What drives revenue growth?

Because the Household and Personal Products industry is a stable and well established industry, the leading companies must find more unique methods to garner revenue growth. Companies within this industry earn revenue simply through the sales of their products. In a market analysis compiled by Wipro IT Business, four recent trends in revenue growth strategies were discussed. These strategies are branding, “micro-selling”, product enhancement, and combating private label competitors.

Branding

For many companies within the Household and Personal Products industry, the importance of the marketing strategy of branding is key. Many companies are seeking to create a sense of loyalty with its customers. To create this brand loyalty, companies offer reward promotions, consistently provide highly quality, and maintain reasonable prices. The goal for these companies is when a customer is standing in front of well-stocked grocery shelves; the customer will purchase their brand again and again, rather than choosing another.

Micro-Selling

            Micro-selling is a revenue growth strategy that targets developing economies. Within developing markets, like India and China, there are lower incomes than compared to United States’ incomes. These lower incomes make it difficult for Household and Personal Products companies to enter and be successful in these types of markets.

A strategy to tap into these markets is the micro-selling method. The products within these low-income markets are packaged smaller. The smaller size of the product makes it cheaper but this is not a detrimental factor because of the sheer immense size of markets like China and India.

Product Enhancement

            Product enhancement deals with what companies call “value-added products.” What this means is that instead of simply selling tissues, companies are selling tissues with lotion inside of the paper tissue’s fibers so customers’ noses do not get chaffed. These “value-added products” are sold at higher prices and are sold within economic markets where they can be afforded.  

Combating Private Label Competitors

            Private label competitors, more commonly known as store brands, are a threat to companies because of their ability to be sold at low prices. These low prices found at private label competitor stores like Wal-Mart and CVS make it difficult for major companies to raise prices because they would quickly lose revenue. To deal with this threat, companies are investing their money into their research and development departments to create and innovate products worthy of higher prices.