Why has BAT's Velo nicotine pouch market share decreased by 10% in the US despite increased marketing spend in the past 6 months?

Introduction

BAT's Velo nicotine pouch market share decline of 10% in the US, despite increased marketing spend over the past 6 months, presents a complex product execution challenge. To address this issue, I'll employ a systematic approach to identify, validate, and resolve the root cause while considering both immediate and long-term implications.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might be a seasonal component. Has this 10% decrease been consistent across all months, or are there fluctuations?

Why it matters: Seasonal patterns could indicate external factors rather than product issues. Expected answer: Fluctuations exist, with more significant drops in certain months. Impact on approach: If seasonal, we'd focus on strategies to counteract cyclical trends.

• Considering the increased marketing spend, I'm curious about the specific channels used. Has there been a shift in marketing strategy or channels alongside the increased spend?

Why it matters: Ineffective marketing could explain the disconnect between spend and market share. Expected answer: New channels or strategies were introduced. Impact on approach: We'd need to evaluate the effectiveness of new marketing initiatives.

• Given the competitive nature of the nicotine pouch market, have there been any significant moves from competitors in the past 6 months?

Why it matters: Competitor actions could be drawing customers away from Velo. Expected answer: A major competitor launched a new product or aggressive campaign. Impact on approach: We'd need to analyze our product positioning and differentiation.

• Thinking about product quality, have there been any changes to the Velo product formulation or packaging in this period?

Why it matters: Product changes could impact user satisfaction and repurchase rates. Expected answer: Minor changes were made to comply with new regulations. Impact on approach: We'd need to assess the impact of these changes on user experience.