When consumption by current brand users is saturated, current users no longer represent a viable opportunity for growth, or the opportunity to make inroads on competitors' targets is modest, it is appropriate to analyze the opportunity offered by attracting nonusers of the category. Two types of nonusers warrant consideration. One segment is composed of those who are entering the category for the first time. The goal is to attract this point-of entry target to your brand. The other nonuser segment is composed of individuals who do not plan to use your category. The task here is to build the category in which your brand holds membership by convincing people that your category provides a better means of achieving some outcome than the one currently being used for the purpose.

Point of Entry. "At 1:58 pm on Wednesday, May 5, in Houston's St. Luke Episcopal Hospital, a consumer was born. Her name was Alyssa J. Nedell, and by the time she went home three days later, some of America's biggest marketers were pursuing her with samples, coupons, and assorted freebies. Procter and Gamble hoped its Pampers brand would win the battle for Alyssa's bottom. Johnson & Johnson offered up a tiny sample of its baby soap. Bristol-Myers Squibb Co. sent along some of its Enfamil baby formula." (Business Week, June 30, 1997).

In many product categories, there are nonusers who are likely to enter the category coincident with some life stage or life event. The idea underlying a point-of-entry strategy is a) to identify who will enter the category and when and b) to direct their consumption to your brand. Point-of-entry is analogous to a first-mover strategy, but here the user is new to the category rather than the product being new to the market.

Producers of baby formula, disposable diapers and other infant products have long used point-of-entry targeting to grow their franchises. Potential mothers are identified prior to giving birth and provided with product information. Pediatricians are detailed by producers to enhance the chances that they will recommend use of the firms' brands and category to prospective and current mothers. Free samples are given to mothers after giving birth in the hope that if consumers try the brand at point-of-entry, they are likely to be loyal to the brand.

Point-of-entry targeting is a particularly attractive strategy when two circumstances exist. One factor is the level of brand penetration, which refers to the percent of category users that have used the brand during a specific time period (usually one year, though it varies with repeat purchase frequency). For example, Tide has over 90% annual penetration, which means that of every 10 consumers who used detergent in a year, over 9 purchased Tide at least once. When penetration is low, focusing on building the number of people who try the brand can develop a brand franchise. If point-of-entry is to be a viable strategy, it is important that a brand's low penetration be accompanied by high loyalty, that is, an ability to hold the people that are attracted to the brand. Point-of entry can be used as the only targeting strategy or it can be deployed in conjunction with other targeting strategies such as maintaining current users. It can be used by category leaders or by followers.

Category Build. Like point-of-entry, a category build strategy is focused on nonusers. However, category build is directed toward those who have no intention of using the category in which your brand holds membership. Indeed, the goal of a category build is to convince people to consider achieving some goal by using one category rather than another. Category build is an appropriate strategy when there is a lack of saturation of the category and the firm has a means it believes will be successful in directing the demand generated for the category to its brand.

A category may be unsaturated in a variety of circumstances. This may occur when a category is new, as was the case with yogurt in the 1980s and sports beverages in the 1990s. In these cases, diffusion of information about the category increased its consumption. But there might also be a lack of saturation in a mature category that has lost its consumer base. For example, in 1990, per capita coffee consumption was about 65% of the level it had enjoyed in 1960, largely because that generation of young people drank far less coffee than had preceding generations. Or, the lack of saturation might be attributable to consumers' failure to recognize the problem for which the category is a remedy. This is a situation that arises frequently in the pharmaceutical arena where consumers are often unaware of their depression, low thyroid condition, and the like and thus do not prompt their physicians to prescribe the ethical products available to remedy these conditions. Finally, seasonal categories such as barbecue sauce or chocolate morsels may be unsaturated contra-seasonally.

There are a variety of devices that are used to direct the demand generated by a category build to a firm's brand. Most frequently, the assumption is that brands will attract category sales in proportion to their share of market. Thus, it is typically market leaders that engage in category build. However, leadership is but one means of directing category demand to a specific brand. In the absence of market leadership, firms with strong sales forces might use advertising to build the category and their sales force to direct this demand to the firm's brand.

When following a category build targeting strategy, it is important to monitor competitors who reside at the edge of the market. Supernormal profits attendant to rapid category growth might attract these firms to the category. In this event, a split ad spending plan is appropriate to support both brand and category growth. Thus, Gatorade might devote ad dollars to telling people why they should drink a sports drink, but with Coke and Pepsi poised at the edge of the sports drink market, it might also be prudent to support a brand sell. What is not prudent, is an effort to promote the category and brand in the same advertisement.

A major impediment to introducing a category build strategy is the lack of certitude about whether demand in a category is saturated. Electric razors are purchased by about 30% of the population. Is this category saturated or not? Two-thirds of the estimated million people who suffer from depression use anti-depressant medication such as Prozac. Is this category saturated, or is there an opportunity to build the category? Assessing the level of saturation is an issue that benefits from empirical data through which the reasons for people's failure to use a category are illuminated. The prospects for a successful category build are far greater if research suggests that the category growth is constrained by a lack of category awareness than if the problem is a negative disposition toward the category. Consumers who have once used a category and no longer do so are typically poor prospects for a category build unless there is category news that has emerged since they used the product. In addition, as we discuss in the next section, insight about the extent of saturation and the appropriateness of a category build may obtain by an assessment of brand performance in relation to category performance.

Dual Approach. There are occasions when a firm uses both a category build and point-of-entry to attract customers. Norelco is the leading brand with more than 50% market share in the $400 million plus electric razor category. Traditional users of electric razors are men 35 and over. While Norelco targets these users in the last several years they have segmented the market and skewed their $30 million ad spending toward the new shaver with a campaign that focuses on building electric usage. The ad copy highlights the irritation associated with a close blade shave and then shows the Norelco in action with the tag "Anything closer would be too close for comfort."

Competitive Considerations. Our analysis to this point has focused on consumers' use of the brand and the category in which the brand holds membership as a basis for targeting strategy. In developing a targeting strategy, consideration might be given to how consumers respond to competitive brands. This is typically done by comparing the performance of the brand against a particular target in relation to the category's performance against the same target. We illustrate this analysis in the context of a geographic segmentation, though it also applies to other segmenting variables as well.

When a firm has distribution in multiple areas of the country, it can create a brand development index, or BDI as it is generally referred to. This is computed by dividing the per capita sales for the brand in a particular region by the per capita sales for the brand in the country as a whole. For example, if Tide's per capita sales in Chicago are say $250 per year, whereas in the country as a whole they are $125 per year, the BDI for Chicago is 200 (250/125x100). In this way, regions can be divided into low and high BDI areas. A similar analysis can be done at the category level. This entails a consideration of the per capita sales of the category in a region in relation to the per capita sales of the category for the entire country. This computation allows the determination of high and low category development or CDI areas.

The product of this analysis is a fourfold classification that is a useful basis for designing strategy. For areas where both the category and the brand exhibit high indices, the first course of action is typically to maintain demand. Market saturation may have set in and investment spending may not be warranted. However, it is possible that a brand with a high BDI can make inroads in a high CDI area if the brand's market share is relatively low. Alternatively, a point-of-entry strategy might be possible if penetration of the market is low and loyalty is high.

Low CDI and high BDI suggests an opportunity to build the category. Caution is necessary here to ensure that a) the market is not saturated and b) market rank or some other means is available of directing the demand created for the category to the brand.

In situations where there is high CDI but low BDI, there may be an opportunity to grow the brand. Here the market might be penetrated if a brand had a point of difference in relation to competitors on dimensions important to consumers.