In trade marketing, key value indicators (KVI) are brands and specific products which are well known to the consumers because of their constant presence, prominence, marketing activity, and regularity of purchase.
Today, we will discuss KVI products, and how to work with them to increase your company’s sales. Although “KVI products” is a common term for commerce, we will try to extrapolate the strategy of working with KVI products to other spheres.
Products of the KVI group
KVI products are products that influence the consumers’ perception of the entire brand. It is necessary to distinguish between KVI products for specialists and consumers.
KVI-products for specialists
For specialists in commodity management (buyers, category managers), KVI goods are, as a rule, marginal and (or) highly marketable, highly price-elastic, and price-sensitive goods. Any mistake in pricing them greatly affects the revenue and profitability of the company.
KVI products for specialists
For consumers, KVI goods are items in their consumer basket, products of regular purchases. The buyer remembers the prices of such goods and compares them when visiting other stores. If the prices of KVI goods do not exceed the threshold level of psychological perception between “acceptable price” and “expensive”, then the consumer believes that the cost of other goods on the seller’s offer is optimal as well.
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How they work with KVI products in trade marketing
As a rule, the KVI product group makes up approximately 3% to 5% of the entire assortment. Marketers constantly monitor the availability and sufficiency of KVI products and regularly analyze updates of KVI goods in the minds of consumers to change the product offer of the company.
Highlighting KVI goods is actively used in the FMCG segment, HORECA, food retail, electronics stores, and some other product categories. However, as we said, the use of the strategy can be broad.
From the merchandising point of view, KVI goods should be noticeable on the shelf, but the attention of customers should not be specifically focused on them. When customers see KVI products, they can understand which price category the store is in, what is the level of the product’s quality, and for which average customer the products are presented in the store.
How to use the strategy of working with KVI products in your niche
Identifying KVIs for consumers is important for developing marketing strategy and product positioning. Companies can use KVIs to emphasize their competitive advantages and attract consumer attention. Consumers, in turn, can use the KVI to compare different products and choose the most appropriate one for their needs.
KVI products differ depending on the sphere. For example, it can be white bread, eggs, and milk in the grocery store, a white casual T-shirt with no print — in the clothes store, gel polish coating — in the manicure salon, a one-hour dance lesson in the dance studio, or polishing the body of the car — in the car wash service, etc.
When a company determines KVI for consumers, it usually relies on market research and analysis of the preferences and needs of its target audience, using surveys and focus groups. This allows the company to understand what aspects of the product or service are most important to consumers and what factors might influence their purchase decision.
However, it is important to remember that KVIs can change over time and depend on changes in market conditions and consumer preferences. Therefore, companies must constantly monitor and analyze these changes in order to remain relevant and competitive.
Factors to pay attention to
- Your target audience’s needs and preferences. The analysis may include examining the demographics, behavioral patterns, motivations, and values of your clients. Based on this information, you can determine which aspects of the product or service are most important to your target audience.
- Competitive environment. Analyze the competitive environment and determine what factors and aspects of the product or service can help it stand out in the marketplace. This may include comparisons with competitors and identifying your products’ unique selling proposition.
- Market trends and innovations. The company monitors market trends and innovations that can affect consumer needs and preferences. For example, changes in technology, lifestyle, or the socio-cultural environment may affect the KVI for consumers.
- Feedback. Collect feedback from your clients.
Conclusion
In general, identifying KVI products for consumers helps companies better understand their target audience and develop products or services that best fit their needs and preferences. This allows companies to be more competitive, improve marketing strategies and increase customer satisfaction.
