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8 winning brand strategies during a slowdown

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Many CEOs of consumer companies are complaining about a slowdown affecting their growth and profitability. But does a slowdown really effect the 2nd challenger brand or beyond. I don’t really feel so. A 2nd challenger would usually have a sub 15 per cent market share and chances are quite high that it may not be in majority of the consumers consideration set nor well distributed. It’s also highly probable that the penetration would be low in the concerned target consumer. The problems of a challenger only get compounded with a slowdown as the strategic mistakes become glaringly evident. More and more brands in this world are in the position of challenger, they are really feeling the heat.



So why are challengers feeling the heat? They may have benchmarked their product and their growth to the industry’s top 2 brands. Or they are unable to ride the wave of category development work done by the leader, as the leader cuts back during a slowdown. One reason is they try to emulate the leader as product differentiation reduces with technology available to all.



So how does a challenger manage a slowdown in these situations?



#1. Touch points: Top management has to experience and connect with the customer, the trade and the market through firsthand experience. If enough time is not spent in the market one will never know what the real problem is or what the next challenge will be. The solution usually lies in improving monitoring of daily business health response time, collections, sales and service to trade and customer.



#2. Distribution: Gaps need to be filled at the earliest and same have to be supported by trade. A challenger will not have the same demand as a leader thus one has to follow a push strategy. Building an emotional connect with the trade along with a good margins will go a long way. Recognition and respect for the trade built by top management involvement helps in long term relation leading to exclusivity.



#3. Map the seasonality: With mapping and planning earlier than your competitor to fill up the shelves can work towards a great advantage for challenger brands.



These three strategies will help quickly manage the short term.



#4. Experiential: If the product you offer is parity to competition but has a few consumer relevant benefits and features which are better or equal to the leaders, then talk about it, show it. You have to find a way to demonstrate and make the customer experience the difference. Probably the leader is not even talking about it, look at the chinks in his armour.



#5. Guerrilla Media: Don’t benchmark on your competitors but focus on your target customer’s habit and try to reach them in an unconventional and uncluttered way. Increasing media costs and clutter needs you to innovate. The internet and retail shelf still offer a lot of opportunities for innovation. Focus on getting sales and engaging with your customers. Communicate to the trade too to build an image.



#6. Product: This takes longer to change but you need to add new products and at least 20 per cent of your business should be from new products. With shorter product life cycles a constant consumer understanding is required through research. If you can’t create a product do a JV, license a brand or technology.



These three strategies will help manage the medium term.



#7. Focus: Is the brand speaking to all consumers or it has segmented and focussed its offering. The segments could be geographical, socio economic or even age or gender-based. When you have two strong brands above you, there can’t be a one size fits all strategy. You need to stand apart by appealing to a growing segment with a sizable business opportunity.



#8. Emotions: You need to get associated with the consumer at a higher level than just the product benefit; the product benefit has to ladder up to a higher order emotional benefit which your target consumer is looking for. People get emotionally involved with brands build that once you have established the rational benefit. Build it through every point of contact with the trade and consumer.



These two strategies will help manage the long term.



These 8 strategies don’t change whether an economy or industry performs or not. A business can only remain relevant if it continuously responds to change. If you are paranoid about your future and watchful of the horizon, you will always be better prepared for the future.



The author, Vineet Trakroo, a Consumer Marketing Strategist, is the CEO, at Evolution Strategy Advisors LLP


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brands slowdown Strategies

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