Category Entry Points: 5 analytical steps to Improve Business Performance

For CMOs to secure the investment they need for brand growth they must demonstrate how brand strategy positively impacts business performance.  In this article, we will show how Category Entry Points play a critical role in tying brand metrics closely to the business metrics that matter most.

Brand growth is achieved by growing Mental Market Share.  This is done by building multiple brand links to the most important Category Entry Points in the related category.

“Category Entry Points are the mental pathways category buyers use to retrieve brands from memory”

Jenni Romaniuk 2023

Improve Mental Market Share (MMS) and Sales Market Share (SMS) should grow proportionately.

Linking these two metrics enables the CFO to easily calculate the impact on business profit.

1. Incremental Share Growth x £Net Sales (unit) Revenue = Incremental Revenue
2. Incremental Revenue – incremental investment to achieve growth = Incremental Profit

There are 5 steps to get to this point, starting with…

1. Identifying the Category Entry Points for Your Category.

This is the foundation to build Mental Availability.

Define the category carefully

Define too narrowly, and you may be skewing the results in your favour, which limits your chances of spotting new growth opportunities. Define too widely, and unless you are one of the market leaders, your brand could fail to register as many links as it should.

Use qualitative research to identify the retrieval cues buyers use to access the category.

Take time to unearth the emotional Category Entry Points, not just the rational ones.

Run quantitative research to understand the importance of each Category Entry Point

As you continue reading, you will see the value of understanding how many category buyers use each CEP to access the category, as well as having an appreciation for how often each one is used.

2. Understand How Many Category Buyers Can Link Your Brand to at Least One Category Entry Point.

The SmilingCFO database shows a less than 10% chance a brand is purchased if it can’t be linked to at least 1 CEP. 

Looking at the chart below, if chocolate and soft drinks are removed from the sample then the chance of a brand being purchased by someone who can’t make a Category Entry Point link to a brand is less than 4%.  The hypothesis for chocolate and soft drinks having a higher chance of being purchased even if a brand doesn’t have Mental Penetration is the frequency of ‘featured promotions’ for these categories, resulting in more spontaneous purchases. 

KitKat is a wonderful example of a brand that has built strong Mental Penetration, (overall score 88%), by being associated with the ‘break time or timeout’ CEP for chocolate.  In our 2023 Mental Availability assessment this Category Entry Point ranked 7th in terms of the number of Category Buyers using it to access the category and two-thirds of these buyers linked KitKat to this particular CEP. 

If a brand has a low Mental Penetration then rectifying this needs to be the thrust of any brand strategy, ideally focussing on building associations with the category entry points that are used by the most buyers when accessing the category.  

3. Rank the Category Entry Points in Order of the Number of Category Buyers Who ‘Use’ Each CEP To Access the Category.

Quantitative research will enable you to calculate the number of buyers that use each category entry point to retrieve a brand from their memory in buying situations.  In this ‘chocolate box’ example you can see that the first 10 CEPs (running from left to right) all have a ‘Category Entry Point Penetration’ of +75%.  In other words, three-quarters of the Category Buyers use these CEPs in buying situations.  Not only does this chart provide a clue as to where brands in this category should focus, but it also confirms that the CEP’s originally identified in the Qual. research are the right ones as all are used by more than half of the category buyers.  

4. Ensure You Understand How Likely Your Brand Is To Be Thought of in the Most Important Buying Situations

Having ranked the CEPs, it is time to get curious as to the performance of your brand and your competitors.

In the example below we show the percentage of category buyers who link Hotel Chocolat or Lindt to a Category Entry Point.  The CEPs that are used most by buyers are on the left and the least used descend to the right-hand side. The average number of brands being linked to each CEP is shown on the right-hand axis and is represented by the yellow line.  

A ‘treat to make you feel happy’ has the highest Category Entry Point Penetration and encouragingly for Lindt, this is the CEP that is most linked to the brand.  In fact, 4 of the top 5 most important CEPs are the ones category buyers most associate with the brand.  The same is true for Hotel Chocolat.  A clue as to why both brands are strong.

When reviewing this data consider the following;

• Which are the most important?
• Which are the most competitive?
• How well does the brand’s Positioning align to each CEP?

5. Identify Areas of Mental Advantage and Disadvantage

So by this point in the process, we have identified the most important CEPs and how many buyers can link a brand to each one.  We are getting closer to finding the best growth opportunities.  Now we need to assess the feasibility of these opportunities by reviewing the competitor landscape.   

It is possible to calculate the number of links we would expect for each brand, based on its size, and highlight deviations of +5pp.  It is suggested by Romaniuk (2023) that there are diminishing returns if the positive deviation is beyond 10pp.  

In the example below, you can see that Hotel Chocolat has three Category Entry Points in the ‘Mental Advantage Zone’ and three Category Entry Points above the zone.  

There are three considerations for Hotel Chocolat in this example;

• Are any of the ‘white spaces’, (i.e. the CEPs where no brand has a mental advantage), realistically attainable, instinctively relevant to the brand’s positioning and valuable enough to pursue?
• Are there Category Entry Points ‘worth fighting for’, i.e. they are used by many category buyers, but there are few competitors in this space?
• Are there Category Entry Points where the mental advantage is sufficiently strong that some investment could be reallocated to strengthen associations with other target CEPs?

Summary of Key Insights:

The framework above adapts Jenni Romaniuk’s advice to “design for the category, analyse for the buyer, report for the brand…”.  We have tweaked ‘design for the category’ to become ‘define the category’ to stress the importance of this part of the process to ensure the integrity of the insight flowing from the research. 

We have also introduced a fourth dimension “translate for the business”.  As a former CMO and CCO, I would see firsthand the issues that the business would have to get complex matters to be easily understood with a clear set of options for the board to consider. Not being able to translate this for the board would result in great ideas not seeing the light of day.

The key point to convey is that this framework can inform a compelling brand strategy and track progress in a way that is meaningful to key stakeholders. Embarking on a brand strategy without identifying the most important Category Entry Points is similar to navigating a maze blindfolded, you might eventually stumble through, but it will be inefficient and frustrating for you AND your CFO.    

Remember, brand growth is achieved by growing Mental Market Share.

Firstly, build Mental Penetration to increase the chance of a brand being purchased.

Second, build associations with multiple Category Entry Points, ideally the most important CEPs, and even better if they are spaces with few competitors.

The output will be Mental Market Share growth, which should translate into Sales Market Share growth.  

The CFO can now make those all important calculations:

1. Incremental Share Growth x £Net Sales (unit) Revenue = Incremental Revenue
2. Incremental Revenue – incremental investment to achieve growth = Incremental Profit

Wishing you every success.

Martin
Partner

Footnote:  Investing in building Mental Availability is ineffective if your Physical Availability strategy is not working in unison as explained by Mark Smith, a partner at SmilingCFO. 

Building mental and physical availability to gain an edge

Credits:

The Ehrenberg Bass Institute for their scientific approach to identifying the growth laws of marketing.

Recommended reading:

Better Brand Health – Prof Jenni Romaniuk 2023

Why the CMO/CFO relationship is the most important one in the C-Suite.

Why Category Entry Points are the vital link between Mental Availability and Demand space theory.

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