by Erna George (@edgeo23) The craziest thing I experienced when I ordered water with my meal recently at an airport restaurant was “we do not give out lemon with tap water”. Say what? While I understand that managing costs is critical, when does the customer need come into play? How do you think the brand manager of the chain would react to the story?
Would they be pleased that cost-saving initiatives were met or would the impact upon consumer enjoyment be foremost? I assume the cost of lemons has sky-rocketed but so have other input costs —yet no one is asking me to pay for electricity at the local hairdresser! Maintaining or increasing profitability is within the remit of most, if not every marketer, but it is vital to maintain or build the brand experience and expression.
Destroying brand value
The obsession with cost-saving will not go away but the increased price-focus as a means of driving sales is, in my view, destroying brand value. Imagine someone applied for a job in your team and all they were interested in was the pay package. The alarm bells in your gut would be ringing! The fear would be that commitment levels would be low and that, at the first option of a higher paid position, the applicant would be gone in a poof. This is why employer brands have a proposition beyond salary. In the same way, you need to focus upon quality on offer and the basket of benefits, not only a price point to avoid no brand connection and drive constant switching.
This was the challenge at the airport restaurant. While I was a fairly captive audience, being stuck till my flight left, there were multiple restaurants to choose from. The restaurant’s hurdle is that I don’t see the benefit or value in bottled water, when in a restaurant, to add to the landfill problem, especially when our drinking water in South Africa is great. Nor did I need half a litre of water — just a glass.
How do they position this lemon limitation to make it okay? Restaurants should offer a level of flexibility.
About a week or so before the lemon chronicles, I’d gone to Wimpy and the person I was with wanted to customise her breakfast (something like swopping sausages with a hash brown and a discount, please). I rolled my eyes, thinking only cookie-cutter options were feasible in a chain such as Wimpy.
Breath of fresh air
I was wrong. The lovely waitress first stated that she understood and would check. This little acknowledgement of the request offered scope to give options. Even if the waitress had come back with a response of “not possible”, that there was a level of contemplation would have provided appeasement and maintained the brand experience. That the waitress came back with an offer close enough to, though not quite the request, was a breath of fresh air. The brand experience was enhanced and the brand perceptions improved.
When I heard exactly the same ‘lemon story’ repeated to multiple patrons at airport restaurant, I realised this was a flat, uncompromising story that all the waiters seemed to have learnt verbatim.
Language is critical in delivering a good value story. All I heard was a limitation. ‘You can only have lemon if you order bottled water’ sent anger rushing to every synapse and vein in my system. If the story was told as ‘we offer complimentary lemon for beverage purchases but you can order sliced lemon as a menu option’, my response would have been different (possibly still twitchy but not explosive). This is how pizza toppings work and people get it.
Just saying no for an option that is on offer by competitors all over the place makes the brand seem profit-hungry and consumer-satisfaction-shy. In fact, I’d wanted coffee and something sweet after my meal so the brand could have extracted more value from me, but I left to find a place where I felt my needs and requests mattered.
Blunt tool
I realise I may have harped on upon this, but I’m incensed that price and cost were the core focus of my restaurant experience. The reality is that an overreliance upon pricing is becoming evident in many areas and this concerns me, as price is a blunt tool. Brands are more than a price point or why bother? Yet, when times get tough, businesses move to a strong price focus which is astounding.
To check my thinking, I asked several people (about eight) about grocery pricing and brands. While not a true sample, the responses were interesting. Many attributed the value aspect to the retailer (retailer x offers great deals) while the language around promoted brands was “brand y is always the cheapest” or “I only buy brand x on special. It is on special every few weeks at, at least one store so I will just wait”. In case you were wondering, cheap is not a compliment and, if consumers are not willing to pay a little more even some of the time, than you don’t have a strong brand.
Yes, retailers do contribute towards lower pricing, as do the brands. The retailer, however, is able to balance these specials against the rest of the basket on offer. Something more is needed to ensure the brand also earns some brownie points. It cannot be a pure price focus or it will result in commodity status, or a price war. Then, if the competitor’s brand has a stronger consumer connection, it will win.
More memorable
The role of price-fighter or constant-discounter works for retail or as a role in a portfolio of brands — it is seldom a long-term single FMCG consumer-brand proposition. Get some gondola ends or category banners with brand messaging to connect with consumers. Develop a value promotion or family pack or develop a unique offer with the retailer that could be profiled in a broadsheet and will be more memorable and distinctive than just “R19.99”. This will draw consumers into stores and connect with them on a more-memorable level, contributing as a brand-building exercise.
In tough or highly competitive times, pricing does not have to be the only tool in your arsenal. Supplement pricing activity with something more about the brand or watch frequency of promotions. Even reviewing cost-efficiencies in manufacturing or other areas could help offset rising costs. In essence, manage costs beyond shifting price up or down by:
- Having tiered offers to allow choice, based upon consumer needs
- Use the price-fighter in your portfolio to drive upon price and protect your stronger brands
- Develop unique offers that cannot simply be compared on price point
Increasing returns with while building the brand requires a balancing act and, given all the parties involved this is a tough ask, are all you marketers up for this?
After starting at Unilever in a classical marketing role, Erna George (@edgeo23) 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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