It has always been difficult to maintain an edge in a world where a capricious consumer sets the rules. Consistently above-average performance requires owning a low relative cost position in combination with recognizable differentiation. While various types of scale (global, regional, drop size, run length,…) provide a low-cost platform, they don’t guarantee anything. In fact we find with unfortunate regularity that “gold plating” often offsets the leverage scale should provide. By way of contrast, innovation and differentiation tend to favor the smaller player. Large companies often find themselves in no-man’s land, intuitively recognizing that they should buy concepts after incubation, but continuing to overinvest in building them – in the face of repeated failures – thereby hedging their bets to a point where neither option works.
Especially in difficult economic periods, marketing (in all its dimensions) suddenly becomes discretionary in nature. While R&D tends to withstand downturns, perceived as having a more measurable ROI, marketing unceremoniously gets the ax. Not only is it easy to turn off this spigot, but there also is an underlying sense that 50% of all marketing is wasted, we just don’t know which 50%. However, from Parthenon’s perspective significantly more science can be applied to building consumer demand than most companies recognize – across all demand building levers.
Over the past few decades Parthenon has developed an extraordinary consumer practice, consulting to large corporations, private equity firms, and portfolio companies. In the simplest sense our toolkit is organized around growth, cost and competition. In addition to the standard advantages of outside strategic assistance (objectivity, focus, dedicated teams), Parthenon is unique because we offer a data-rich, customized approach; a world class economist and supporting team who we integrate into our case teams; extraordinary market research turn-around capabilities with a strategic twist; a large portion of our thousands of diligences have focused on the consumer; finally, we provide rapid access to senior people across the firm.
Parthenon has tremendous confidence in our ability to deliver actionable insights. Consequently, we put significant portions of our fees at risk, subject to managements’ discretion – and not just when the economy is in the tank.