Fair Exchange: Tough times for brands — stop the panic
by Erna George (@) A homerun or striking out happens not only on the baseball field but in markets, too. The equivalent brand scenario is you’ve just lost market leadership, your volume is down 10% and your competitor’s just launched a winning range at a discount… What do you do? Panic, persevere or prevail?
Panic is one of a marketer’s worst enemies and it’s very real, as businesses demand positive performance within a few cycles and, even after one cycle of missed targets, the business will demand a view on the plan to correct. I know this panic and can’t say I’ve always responded well. From my lessons and those of colleagues and brands I’ve worked on, below are a few watch-out areas to keep in mind when the chips are down.
The good ol’ price drop…
…And hope there is no roll of profits out the door. A quick reaction on price is one of the worst responses. If you continue, and consumers learn a new price point, you’ve lost. The trade is unlikely to let you off the hook from that low price and you’ve essentially restated your price strategy in the market. Pricing is definitely a key lever but it must be a well-appraised approach that doesn’t alter the brand positioning in the marketplace, unless by design. If you’re using price elasticity studies, please ensure it includes all context as I’ve seen too many shallow studies in my time. If you don’t have the context to explain competitor response or you own business decisions over the peaks and troughs, use the study as a benchmark and not as a fait accompli. Determine what price relativity or level of discounting for what time period and in which channel — you do have choices and different levers may be used for different impact.
In addition, beyond price and discounting, consider other value offers such as bulk or 3-for-2 that shift away from pure price comparison. Work with your sales teams and finance teams to model impact before moving. An ill-conceived move may cost millions but the right shift may yield growth and keep competitors guessing.
The quick launch to hold volume or block someone
Now, I’ve seen some amazingly successful quick launches off big ideas with a real consumer need and human truth behind them. But a rash and ill-prepared launch as a hope to change futures often costs more than it’s worth.
There’s the launch that doesn’t fit your brand strategy. The sales team come to you saying that, as this variant is really driving the competitors’ sales growth, we should launch one, too Press pause, consider and then ask for time to review. Imagine you are a health offer in your market and this new variant doesn’t have a link to better-for-you platform… what are you doing to how the brand is perceived.
Another is the low-margin or low-impact launch…Product X should be rationalised, given poor performance, but we need to keep facings on shelf, so let’s relaunch. Or we don’t have a finalised view on consumer proposition on a new product but it tastes good. so let’s launch. If it’s at a lower margin than core and isn’t positioned in a distinct position in terms of benefit or placement in store to steal from a different base, you’ll reduce your total brand profitability and you could even have a negative impact on the total market’s profits — reducing future size of prize for you and competitors. Rather consider limited-edition packs or new elements consumers can engage with on social media to create conversations and interest; look at listing in a new channel with a smaller or larger pack format — once again, there are options.
Forget the long-term brand-build for the short-term win
Many will try to save on advertising or brand building activities and rather invest in tactical elements that yield instant results. Let’s find a comparison. Imagine your job is at risk due to downsizing. Do you respond by taking your LinkedIn profile off the web, not talking to recruiters and putting your phone on silent? Does this sound like a good plan? So why would you remove your brand’s voice from the marketplace, going dark when times are tough? Why would you stop telling people about how they can benefit from your offer as a reminder amid the clutter? All this yields is a lower spend base, which makes justifying budget in the year to come harder, a brand with a weak consumer-brand relationship that struggles to convert off this weak foundation, or your consumers feeling bereft at your silence — disappointment becomes irritation and they move on.
Absolutely re-weight between long-term brand-building and short-term growth, but disinvesting in brand-build when it’s a key pillar of your growth strategy, or in markets where brand is critical to decisions, is a recipe for long-term decline and losses.
Stop the panic
Stop the panic. Strategy is critical. Brands are crafted over years but may be killed in a second. Strategy shouldn’t be inflexible but it can’t change as the wind blows. Many will have an opinion or some will try to keep you to tactical wins. You know what must be maintained; find alternate ways to articulate or express your strategy — that’s your job and where your creative prowess, strategic skill and staying power will be tested the most.
- Plan tactical approaches within your existing strategy or reformulate the long game so that you aren’t led by reaction but well-considered actions
- Use your teams to source ideas for cost-saving with procurement, shifting deals with sales and other mechanics, rather than disinvesting in brand-building or investing in ill-conceived knee-jerk reactions
- Reformulate your plan, present it internally to gain alignment and, once aligned, get going and maintain some flexibility within your strategic play
Play to stay in the game, not just exist.
After starting at Unilever in a classical marketing role, Erna George (@) explored the agency side of life, first as a partner at Fountainhead Design, followed by the manic and inspiring world of consultancy at Added Value. She has returned to client-side, leading the marketing team in the Cereals, Accompaniments & Baking Division at Pioneer Foods. Her monthly “Fair Exchange” column on MarkLives concerns business relationships and partnerships in marketing and brandland.
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