Market Architecture
Consumer Package Goods
The Challenge
The Client is a worldwide apparel company with a stable of over 30 brands. After divesting of one of its old legacy brands, the company wanted to implement a new growth strategy via acquisition. They approached Management Science Associates, Inc. (MSA) seeking a robust solution for identifying what types of brands and businesses would have the greatest future growth potential for the apparel industry.
What Did MSA Do
MSA’s Market Architecture™ solution was the perfect approach to clarify the current state of the apparel industry, as well as provide a glimpse as to where the best growth opportunities are within the category moving forward.
Instead of looking at repeat purchases as a way to compute brand loyalty, Market Architecture looks at brand purchases along key consumer dimensions to estimate what this solution calls ‘choice elasticity’.
- Market Structure – How do consumers choose products within a category?
- Brand Choice Drivers – What factors influence consumers to buy certain brands?
- Brand-to-Brand Competition – What is the nature of competition between brands? Why do consumers buy competitors?
- Profitability – How to leverage brand strengths to grow sales and profits?
While consumer survey data is usually the main data input for Market Architecture, in this case, MSA worked with ‘purchase occasion’ data from a syndicated consumer panel for the apparel industry to which the Client subscribes.
The study looked at all of the Client’s current retail customers, as well as other broader retailer classifications and channels. The study also covered almost all major retail apparel lines.
The Results
- The study delivered a clear, consistent three-tier choice hierarchy for both women and men, with only a few exceptions.
- Results provided the Client with a unified framework to better understand consumer preferences by gender.
- MSA developed a “strength of appeal” table ranking retailers, apparel categories, and brand types from highest to lowest appeal.
- This table became a critical tool for evaluating profit potential across target acquisition opportunities.
- As a direct outcome of the study, the Client completed two major brand acquisitions totaling nearly $1 billion in investment.
