Outcome-orientated, need states positioning is more and more visible across fmcg industries, as brand owners expand the framework into an increasingly divergent range of categories. Consumers are increasingly primed to focus on the desired outcome or intention of their consumption, with nuance, and are beginning their purchase and consumption journeys working back from this point. This represents a step change in the way consumers reflect on their product choices, and provides a framework for product development in a world in which established structures have lost resonance.
However, there are three key challenges to the implementation of need states positioning for modern fmcg companies: regulatory restrictions, consumer expectations and competitive intensity.
Regulatory restrictions: Limits to language
Regulators, government agencies and voluntary codes all place significant restrictions on the ways in which companies can communicate with consumers. This represents a challenge for brands wishing to engage in need states positioning. In particular, need states frameworks often verge into what could be regarded as claims (implicit or explicit) related to health, which tend to be dealt with especially restrictively by policy and industry codes.
In some jurisdictions, such as the EU, regulators have established a set of authorised (and unauthorised) claims relating to specific ingredients and formulations. Brand owners are therefore entitled to use certain specific language in relation to certain products but are also barred from using others. In general terms, more specific need state positionings may be more likely to be regarded as objective claims which require supporting evidence that, for example, any ingredients underlying the claim are sufficiently present in the formulation. Broader implied claims through less specific positionings, such as “relaxation”, are perhaps less likely to be subject to the requirement for scientific substantiation.
Consumer expectations: Writing cheques that the product must be able to cash
One of the major reasons why regulators seek to restrict brand messaging and positioning is that consumers undoubtedly rely on it when making purchase and consumption choices. A need state positioning, particularly at the firmer end of offered outcomes is, however, likely to be viewed less as a product claim and more as a promise made by the brand. There is, therefore, a significant issue around expectation management to ensure that the positioning is sharp enough to meaningfully address the consumer mindset, while being well formulated and efficacious enough to fulfil the implicit promise.
Any significant disconnect between messaging and experience will rapidly lead to a loss of consumer confidence in the grammar of need states, with an attendant lack of repeat consumption. We have seen echoes of this issue in the growing CBD category as (often very low-dose) products make significant claims for the efficacy and potential of CBD. The predictable effect of overexuberant marketing has been unfulfilled consumer expectations and a lack of clarity and trust in the wider category.
Competitive intensity: Creating clear blue water (or differentiating from other clear blue water)
In 2019, a study by Brandeis University coined the term “the hipster effect” – the concept that groups identifying as counter-cultural or “anti-mainstream” and espousing individuality as a core tenet ultimately coalesce around a uniform appearance. In short, all hipsters look the same.
As the power of need states positioning becomes more broadly recognised, and products with a wider range of natural actives become more widely available, a similar uniformity is emerging. This is manifesting in the replication of a range of consumer cues, from colour palette to design aesthetic to the “trusted pal” style of grammar and language used in many need state-orientated offerings. In part, this is a natural outcome of the fact that many of these products are aimed at specific generational demographics, heavily influenced by design aesthetics like vapourwave. However, it nonetheless risks resulting in an extremely crowded field, where a greater number of products are competing for a finite number of consumers (in that segmentation) with broadly similar visual cues and often using the same hero actives in their formulations.
For further insights into the current manifestation of need states, their link to ingredients, cross-industry impact and case studies, access Euromonitor International’s recent briefing Consumer Need States and Mindful Mindsets Across Fmcg or contact Shane.MacGuill@euromonitor.com.