With the current confused turmoil in the ‘double-dipping (?)’ market, causing savvy consumers to buy even more cautiously, with private label growing faster than ever, pound shops becoming a permanent feature of the landscape, sophisticated retailers missing a fundamental brand-equity trick by continuing to mislead shoppers with bulk-buy prices that offer less value than standard packs, and GSCOP fading into apathy-driven oblivion, it is tempting for NAMs to ignore the current scene and revert to forecasting based upon last year’s figures, ‘plus a bit’…
However, in unprecedented times when historical performance counts for little, a factory still needs guidance on how much to produce. This means that a NAM somehow has to create a planning context from the current uncertainties. In other words, it is now essential to revert to the basics of demand and value for money and make a realistic assessment of the relative pulling power of the brand vs. available alternatives, through the eyes of both consumer and retailer.
This means assessing the appeal of the brand offering (Product/performance, Price/value, Presentation/communication and Place/availability) through the eyes of the target consumer, compared with competitive brands and private label that form part of the choice available where and when that consumer decides to shop. Here it is necessary to know how well the brand actually performs against competition on each count, in order to position the brand optimally. When in doubt, use the old salesman’s trick and ask yourself if it were your choice, would you choose your brand, at this price…and be delighted by the resulting delivery? Bear in mind that the cost of persuading a consumer to try a brand the first time is so high that a company only begins to make profit on the second or sometimes even the third purchase… If this process does not seem like your job, then ask yourself who else in the company is facing up to market realities to this extent, day-to-day.
Next it is important to know where the brand’s consumer chooses to shop, the place where your brand has to excel vs. the competition in the category, the place where you delegate access to your brand to a shopkeeper whose priority is to grow the store brand, who may view brands as a means of attracting shoppers to provide a switch-sale opportunity for private label.
To over-ride this real-world aisle-obstacle, it is important to realistically assess the brand’s pulling power vs. competing brands and the retailer’s private label, making an impact so great in terms of the retail version of Product (brand-share/rate-of-sale), Price (margin, terms & support), Presentation (ATL & BTL) and Place (availability), that the retailer recognises that your brand represents the best fit with shopper-need, and acts accordingly in the aisle… Bought-in advice, data and specialist-colleagues can help you to shorten the odds, but again, if you don’t do it, who else in the company is even half capable of making this judgement call…
Having established the brand’s relative appeal, it is important to bear in mind that there are only four ways to grow a business. The easiest way is to sell more of your brand to existing users of the brand in the aisle. The shopper knows the brand and has used it before, and simply needs convincing they should buy more of the same. It helps if your marketing colleagues are sending the same message mediawise… The second most productive way of growing brand sales is to sell new variants of the brand to existing users in the aisle. This time the shopper knows the brand, is presumably satisfied with its performance and is willing to try a new variant of the same brand, a message ideally echoed by marketing…
Given that supplier and shop owner potentially understand the brand-shopper on two levels in terms of shopping behaviour and consumption behaviour, with the shopper having a relationship with the brand as both user of current version and new variant, these combined insights should provide a basis for clarifying the shopper profile and attracting shoppers of a similar profile to the brand, in the aisle…
Given the relative ease of building brand sales in these ways, little is lost by leaving the fourth and final business building option to chance. In other words, little effort should be expended in trying to sell new products to new shoppers in-store, given that the shopper does not know the brand and the supplier does not know the shopper-type.
Finally, the NAM needs to ensure that the numbers resulting from the above reality-check bear some relationship with company forecasts at customer level.
If not, reality-check the company…
