Article

Backyards without fences: Carving out

territory in the changing consumer
products terrain
Shifts in channels and a more heterogeneous consumer base are
weakening the traditional fences firms once maintained around
sizeable consumer populations. Building new, more effective fences
amid the complexity will require a different approach.
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For many farmers, repairing fences, maintaining boundaries, and strengthening
fortifications is a never-ending task. So it is with consumer product companies. Over the
past three decades, many consumer product companies in the United States had strong
fences to mark their territory and protect their business. Most large companies in the
industry often enjoyed unquestioned consumer trust in their brands; a fragmented, often
subordinate, retailer base; a vast innovation and quality advantage over store brands; a
command of advertising media; and the resource and margin advantages associated with
scale. The US consumer base, too, was relatively homogeneous, making it easier to capture
the business of large numbers of consumers using relatively undifferentiated tactics. But
times have changed.

Today, many brands struggle to maintain relevance and a price premium. Shifts in channels
and a more heterogeneous consumer base are weakening the traditional fences firms once
maintained around sizeable consumer populations. Building new, more effective fences
amid the complexity will require a different approach.

Backyards without fences: Carving out territory in the changing consumer products
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