Given favorable economic conditions, it’s intuitive to expect demand to grow along with them. That was the case for a supplier organization in a mature, highly competitive mass-consumption market, with decades operating in it. Everything pointed to the business growing: the economy was growing, inflation wasn’t managing to curb consumption of the category, and yet, month after month, growth wasn’t coming. It’s the contradiction that first puzzles and then frustrates any decision-maker: when the context is favorable, the explanation for why something isn’t moving is almost never simple.

The initial response was the most intuitive — and the most common: adjust the price on some products, polish the message on others, invest a bit more in digital channels. Each front solved separately. Each adjustment, technically correct. The result, the same as always.

Demand That Resists Inflation, But Growth That Doesn’t Arrive

The period’s data told a story with two twists that, read separately, looked like good news. Consumer income was growing. Sustained inflation typically hits non-essential categories first — but consumption of this category held steady, without the decline demand theory would have predicted.

A price-elasticity of demand calculation by product line revealed something even more interesting: that resistance wasn’t even. Within the same category, lines that were clearly price-sensitive coexisted with others —the higher value-added ones— where price barely explained the variation in quantity consumed. Brand loyalty? Habit inertia? Either reading holds up on its own. Neither, on its own, explains why total growth stayed flat.

Three Readings That Only Make Sense Together

Behavior: consumption occasions multiplied. The sociological literature on consumption habits (Poulain, 2002) documented a fundamental shift: daily consumption moments went from a few well-defined ones to several, smaller and spread throughout the day.

From 3 to 6+ — that’s how much daily consumption occasions multiplied, as documented by the habits research cited in this case (Poulain, 2002).

Crossed with demand’s resistance to price, the reading changes completely: consumption wasn’t sustained by inertia. It was sustained because real consumption occasions multiplied — even when paying for them cost more.

Economics: two distinct demands within the same business. The same analysis of economic and consumption data revealed something the organization had right in front of it and wasn’t seeing: within a single category, two distinct demand behaviors coexisted, one price-sensitive and one not. And yet, the organization kept competing with a single pricing strategy and a single message for both.

Behavior and the digital layer: how the consumer looked for the company. Research on purchase motivators revealed consumer types with different decision logics — some guided by price, others by trust and the relationship with the supplier. Reviewing how those same consumers found and evaluated the organization on its digital channels, the inconsistencies surfaced: incongruities: the message the business projected outward didn’t match the kind of relationship the higher-value consumer was looking for.

Each of these readings, taken separately, contributed a distinct but incomplete operational piece:

• habits research gave evidence of new consumption moments, but not what price to hold in them

• price elasticity of demand guided pricing policy by segment, but didn’t explain what the buyer was looking for beyond price

• consumer behavior revealed what motivated the higher-value consumer, but not how to get that message to them

Each discipline solved one part of the offer’s design and left a gap exactly where the next one began.

None of the layers explained the stagnation on its own; the combination did.

Moving One Isolated Lever Doesn’t Explain What Sustains a Position

Classic competitive strategy teaches you to choose: you compete on price or you compete on differentiation. The evidence from this case reveals something different: what sustained the organization’s position for decades wasn’t choosing a single strategy, but the combination of both — competitive pricing in the segment that demanded it, differentiation based on relationship and expertise in the one that didn’t. For anyone facing a similar stagnation, the implication isn’t to adjust one isolated operational parameter —price, channel, message— but to first understand how consumer behavior, the economic structure of demand, and the way the brand presents itself interact. Then, decide how to intervene: in this case, it meant differentiating prices by segment, shifting the message’s register toward the relational, and diversifying distribution toward digital and HORECA.

Observed result: total sales growth in the 10-15% range and new strategic alliances within 12 months, after aligning price, brand message, and digital presence to the higher value-added segment.

Adjusting one isolated parameter —without knowing the full environment around it— can feel like progress. It rarely is: it’s almost always treating diverse signals separately, forgetting that they interact with each other. The company, in its first attempt, did exactly that — price, channel, and message, each solved on its own, as if they weren’t part of the same system. Demand never stopped responding; what was missing was reading it whole, not signal by signal. That, at bottom, is the difference between optimizing pieces and understanding a system.

References

• Poulain, J.-P. (2002). Sociologies de l’alimentation: Les mangeurs et l’espace social alimentaire. Presses Universitaires de France.