Speaking at the Pricing, Promotion and Trade Investment conference, Energizer UK MD Nick Powell said his company had accelerated category growth and NPD by taking on leading brands such as Duracell. Categories dominated by one brand didn't have the same rate of NPD or deals as those with strong challengers, he said.
"Consumers are looking for value," Powell added. "That doesn't have to be the lowest possible price. Consumers want the benefits of brands, but want to pay less for them. That makes NPD as important as aggressive promotions."
In many cases, a brand leader's sales also benefited as it upped its investment in response to the contender, he said. Since 2003, sales in the batteries category have grown 12.9% by value, with Duracell up 16% over the period and Energizer increasing 49%, he said.
Retailers over-trading in strong second and third- ranked brands would grow their categories, said Powell, adding that competition was the only way to stop categories falling in value as promotional discounts became steeper and more plentiful.
"Sales made on promotion taking an increasing share of the total is nothing new," he said. "But this year the rate at which it's happening has increased four-fold. Brands have to invest in innovation and above-the-line, not just on trade deals."