Consumer Products Strategy
Practice this intermediate market entry case interview question from BCG in the Consumer Goods sector. Includes detailed problem prompt, clarifying questions, structured framework, and expert recommendation. Part of ProHub's 835+ consulting case library.
This case requires candidates to combine quantitative analysis (market share and incremental revenue calculations) with strategic brainstorming tailored to a specific consumer segment. The key insight is recognizing that low-income consumers have different purchasing behaviors and preferences across product categories, requiring a customized market entry strategy rather than a generic expansion approach.
Our client is a large, multinational consumer products company with business in over 200 countries. Today, we are going to focus on its US business. It has been following US demographic trends and has found that low income households have been growing 2X (twice) as quickly as other consumer segments. Low income is defined as families with income at the poverty level or below.
Our client has always had a premium product strategy. It sells its products in grocery stores, convenience stores, mass retailers, etc., but its products are always priced at the high-end of their respective categories. It has never targeted the low income segment before and doesn’t have a strategy to do so, but, given the growth of this segment, our client is considering entering the low income segment.
Our client has 3 questions for BCG:
- Should it have a low income strategy?
- If it should have a low income strategy, what are some tactics it should deploy?
- What are some of the risks the client may face?
Clarifying Information
- Low income consumers purchase largely in smaller, local shops.
- Low income consumers can’t afford salons but will indulge on shampoos.
- Low income consumers are willing to spend more on baby food to protect their children.
- There are valid generics that compete with our client’s cold medicine.