One client, for example, took the identification of a new and vibrant consumer target as an opportunity to refine their existing product portfolio strategy to ensure maximum return on their investment. They chose to leverage The Cambridge Group's unique Customer Demand Analysis^TM approach to seamlessly align demand and supply insights in the development of their strategy. Through this demand-led process the team was able to maximize profitability by understanding precisely what consumer demand to serve with exactly which offers at the price points that optimized returns.

From previous Cambridge Group Demand Discovery Groups^TM the team had learned that consumers divide the category into two rather simplistic groups – taste threshold and taste trade-up. Taste trade-up consumers enjoyed the product for its inherent taste/flavor attributes – often making it the focus of a consumption occasion – while taste threshold consumers tended to consume the product with other items and paid little attention to the nuances of its flavor.

To determine exactly what product features to invest in for maximum returns, the team needed to better understand the specific trade-offs and decisions consumers were making when shopping the category. To do this the team conducted a Customer Demand Analysis^TM, in which consumers participate in a simulated shopping experience and are asked to select from a series of products based on the various benefits and features they offered. Consumers saw a range of scenarios during the online exercise and were asked each time to select the number and type of products they would prefer to purchase.

Based on the choices and trade-offs consumers made the team was able to optimize the client's product portfolio strategy – for their mainstream products as well as the more premium products.

The team quickly recognized that the mainstream products were best suited to meet the needs of the 'taste threshold' consumers. Through their modeling the team learned that consumers in this category did not value the more expensive ingredients that were currently in the product and certainly would not pay incrementally for them. With this knowledge, the team was empowered to substitute the more expensive ingredient for several less expensive options which had no negative impact on the product taste for consumers. This substitution resulted in reduced production costs with no negative impact to the consumer...money straight to the bottom line.

For the more premium products – those better suited to meet the needs of the 'taste trade-up' consumer – the team also identified a range of opportunities.

For these consumers who value the taste nuances of the product the team's investment in higher quality ingredients was validated. Not only did these consumers value the quality, they were willing to pay incrementally for it – if only they knew it was present in the product. In particular, to the targeted moms with teens, articulating that the product contained high quality ingredients, did not contain artificial flavors/colors/fillers and even was easily microwave-able were highly motivating and would cement a solid relationship with this consumer. In addition the team recommended further investment in quality ingredients knowing that these consumers would pay incrementally for it.