When times get tough, consumer product companies pull back. They delay new product rollouts and product innovations. They cut back on advertising and marketing expenditures. But is it wise to completely stop spending on brand-building initiatives because of the economy?
It’s hard to argue against implementing cost-cutting measures now, but it might be a good idea to do some prudent investing in specific areas that will retain market share today, with the potential to make future gains.
It’s more important than ever to stand for value in the consumer’s mind when buying slows down. Value isn’t just about price. In fact, battling competitors in a price war to achieve the lowest price is the road to eroding brand value with consumers. While price parity is an issue to be addressed, other brand assets should be leveraged to create value.
Consumers are purchasing less and doing it more judiciously, but they’re still buying. What compelling reasons can marketers give consumers to purchase their products versus their competitors’ in a tough business environment?
Companies ought to be assessing their value proposition right now, by conducting research. Key questions should be answered as quickly as possible:
• What are customers responding positively to about the company’s brand(s)?
• Have customer perceptions changed recently, in light of the economic downturn, about the company brand(s)? If so, why and how?
• What could be implemented to meet customers’ expectations to better help them achieve their goals or fulfill their desires? Product quality improvements? Slight innovations?
• How relevant is the product packaging? Extensive studies reveal that consumers ignore two-thirds of packaging on retail shelves—consumers who are actively engaged in making a purchase. Is it time to refresh packaging to create value?
• What are customers’ shopping habits now, and how have they changed? What values are they responding to, and how often are they shopping?
Surprisingly, this kind of research can lead to some innovations that are not costly but make a substantial difference to consumers in both products and packaging. Identifying and adding the attributes that have meaning and importance for consumers translates to their finding more value in the brands that do so.
In times like these, when consumers tend to be less brand-loyal and search for greater value for their dollars, they are more likely to switch to brands that offer them real value. More important, as times improve, consumers who have changed brand preferences have likely changed them permanently.
One of consumer product companies’ most important communication platforms is packaging. Marketing campaigns are stretched across many media platforms to reach consumers and bring them into retail environments—virtual and real. However, consumers make many of their actual decisions at the point of purchase.
Given this, how can packaging further enhance brand value and steer customers to continue to make a specific brand choice? How can it also be used to influence non-customers to switch brands?
Now might be the best time to consider revitalizing packaging. After conducting research, it becomes possible to communicate the brand’s clear advantages over competitors’. Then, packaging can build in additional value. There are numerous ways to accomplish this.
If consumers who gravitate to a specific brand are very young or elderly, for example, how about designing packaging that is easier to open, while still ensuring the integrity of the product? On the toy front, Mattel has taken the lead by making it easier for kids to open packaging containing its iconic Barbie doll. Now it is possible to remove Barbie from the packaging and twist ties without the use of sharp implements, and without becoming bloodied in the process. So how about making pharma packaging easier for seniors, but not children, to open?
Too much category packaging looks similar, so how about investing in structural packaging? Structural packaging is a standout; unique package structures become easy brand identifiers over time, and they stand out from myriad products on the retail shelf. A structurally distinguished package also can refer back to the brand in a decisive manner. Structure can encompass uniquely shaped cutouts or “windows” to view products inside of packaging, new innovations on traditional clamshells, embossed or debossed logos, and the incorporation of uniquely identifying elements of the brand or actual products. Many of these tactics are not that expensive to produce, yet they are strong differentiators.
When Heinz stood its iconic ketchup on its head by changing the package structure, the new bottle signaled more value to consumers. No more struggling to get at the ketchup stuck at the bottom of the bottle; the new packaging makes it easy to use every bit of the product. The package also is designed to fit inside the refrigerator door, and it represents a terrific design coup.
Dean Dairy’s Milk Chug packaging makes drinking milk much more attractive to kids—a boon to parents who are trying to cultivate good nutritional habits in their children. Olay Regenerist face and body care products appear in cylindrical packaging with uniquely shaped triangular “windows” so consumers can see the products inside. Here’s a popularly priced, mass-marketed line that has the look of upscale, high-priced cosmetics.
Eye-popping new graphics and visuals also might be considered. Some of the world’s most visible and celebrated brands benefit from new graphic architecture. Remember Pepsi-Cola’s pop art bottles last year? And Coca-Cola’s this year? Established brands can become tired, and nothing generates new excitement for products like engaging, daring new packaging that plays into today’s cultural values.
When Hasbro’s Transformers re-emerged as a bona-fide blockbuster after being discovered by a new generation of boys, the packaging likewise saw a “transformation” in the use of structure, color, and graphics. Though Transformers Classics feature the stacked Transformers logo from the 1980s, flip-up tabs reveal the character’s robot mode. Products on full view in breathtaking colors signal packaging that is avant-garde for today’s Millenials, born between 1977 and 1998.
Consumers are leery of consumable products and toys now because of recent safety scares. Can companies build more trust with full disclosure statements on packaging? Especially if they are working to guarantee public safety through transparency? Companies that provide substantive information on their packaging will win with consumers, who continue to express concerns about product-safety issues.
Deloitte LLP recently issued an important report based on a survey the company commissioned. “Food and Product Safety and its Effect on Consumer Buying Habits” confirms the importance of transparency and trust among consumers. According to the report, about 58% of surveyed respondents who learned of product safety or quality problems changed their buying patterns.
In fact, those consumers surveyed did not purchase the products in question for an average of nine months, “increasing the likelihood that they would stop buying the product or brand altogether,” the report says. If this isn’t an impetus to assure consumers, and using packaging as a primary communications tool to do so, what is?
Since many consumers are environmentally aware and conservation-conscious, why not eliminate excess packaging? Dell recently announced it would cut its PC packaging by 10%. How about offering consumers more refillable, reusable packaging options? Long a bastion of natural-product companies, many mass-distributed brands are beginning to see the wisdom of using less packaging. Colgate-Palmolive offers large refills for its popular pump-top Softsoap brand.
How about converting packaging using recycled or biodegradable materials, at least in part? Not every option is expensive, but educated consumers welcome even incremental changes.
Remember: Consumers have not stopped purchasing. They’re just cutting back because of economic constraints. They’re becoming more discerning, and that necessarily means they are looking for more value. It’s time to encourage current customers to maintain their brand loyalty and uncommitted consumers to switch brands. Therein lies the opportunity. For companies that conduct the proper research to communicate and deliver value, their costs incurred will be efficient, effective, and pay large dividends now and into the future.
By Ted Mininni, President, Design Force Inc.
