Brand Management – Keeping a Pulse on changing Consumer Trends

Who makes an ‘excellent’ Brand Manager? What does it take? While the formula is not exactly a science, a few key ingredients include a solid consumer marketing background and a flair for ‘creative’ design and type of packaging used.  But there is much more….

Being creative in reading and analyzing Consumer Trend Data is essential for keeping a pulse on your target market (see below) and this is where we will delve deep today.

Ideally, a brand manager should deliver/create products that satisfy consumer trends/needs BEFORE they become mainstream (i.e. before trend peak sales and competition supersaturates the market). Understanding consumer trends then, is critical for developing your product strategies.

So how does one tap into Consumer Trend Data?
– Trade shows
– Vendor meetings
– Magazines (I use Canadian Grocer for example for food trends)
– Studying data such as AC Neilson.
– The Internet (assuming it is a reputable site).
– Government Statistics
http://www.foodprocessing.com/industrynews/2011/innova-top10-food-trends-2012.html

Cut & paste this site above – this information is key to unlocking future trends. This, coupled with government data (ie demographic data) will help you. Some easy examples you should think about is your target market – Can the elderly read your labels? Can kids and elders open the package easily (assuming you want kids to open the package at all?)

Let’s look at a few more examples. If demographic data indicates people are getting older and the fastest growing household segment is 1-2 people per household (while traditional 4-person households are declining) perhaps you need to look at your packsize i.e. is it logical to develop a 10lb potato bag or perhaps a smaller size given your target market – maybe 2 people can’t consume that much before it is rotten? Or perhaps trend data indicates refrigerator space is at a premium and people can’t buy your huge 2kg tub of ‘whatever’.

Bottom Line – Without keeping your pulse on the consumer you are surely going to be complacent and ultimately your product will be antiquated and obsolete.

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Merchants vs Operators: The Retail Juggernauts

Merchandisers and Operators don’t always get along. Ok, seldom get along. There I said it. It’s out there. As Merchants scream “These guys can’t execute!”…. Operators are screaming “You can’t create a program for me to execute! You’ve never been on the “floor!””

But this difference in opinion (and occasional friction), is actually very healthy for retail business.

Merchandisers are typically the head office people and Operators are store managers/supervisors, etc. Operators are the front line with your customers. Merchandisers are the strategists behind the scenes.
While it is healthy for Merchants and Operators to delve deep into retail debates, a proactive Merchant will elicit Operator feedback before creating a program. Merchandisers: your programs are ONLY as good as the way in which they are seamlessly executed.

Merchandising TIP of the day
Merchants sometimes launch multiple products at the same time (example 10 plus flavours of ice cream). While it may seem intuitive to release all at once, it may not actually be the best strategy to employ. Too many products to choose from!  This is especially true for products with limited shelf life (very perishable), or products that are novel to the market place and thus riskier.

Merchants, put your Operator ‘hat’ on before launching too many!
– Operators are responsible for ordering. If a Merchant introduces 10+ skus (referred to as Stock Keeping Unit) on something new, Operators have no history on how to order.
– If they order incorrectly, they have too much on hand (not only taking up precious space in backroom) but it increases Shrink (product thrown out) which costs your program and the business $money.

INSTEAD…. introduce a responsible number of skus. Let the skus gain momentum. Have Operators begging you for more line extensions because consumers are buying.
MERCHANTS REMEMBER THIS: A PROGRAM IS MORE CREDIBLE IF YOU STRATEGICALLY ADD MORE SKUS THAN INTRODUCING TOO MANY AND THEN DELIST THEM!!

Both consumers and operators will lose faith in program. So set yourself up for success.

Pricing Strategies Examined

In a tough economy, many retailers are discounting prices.  But price alone is not a sustainable strategy to retain customers and earn a $profit$. Attract them yes! …But retain customers, no!
However, leveraging from your reduced price strategy while concurrently implementing a new value-added program(s) to your business model can be sustainable. And very profitable.

During a discounted pricing strategy, your business will increase customer traffic and customers will get exposure to your newly created (or even existing value-added (VA) services) and this will gain customer loyalty.  Such VA programs should be tailored to your target market and some basic examples include: elderly assistance, VIP treatment for women with children, build in loyalty program/points, partnering with a company that synergizes with your business, etc. 

The more creative and unique, the better: unlike Glengarry Glen Ross, it is not ABC! (Always Be Closing) but ABD! (Always be Differentiating!)

It is important for retailers to emphasize ‘what differentiates them” from the competition while employing the discounted price strategy.  Discounting on price alone will only reduce profits and ultimately precipitate a new retail strategy…one that will be a more desperate measure to gain sales. 

Side Note: New Entry Retailer Strategies
In some instances, however, discounting price is the only strategy of some retailers (usually new retailers or smaller outfits….a tactic employed to gain market share and exposure). This strategy usually has a set time limit and there is a fundamental understanding of the impact on short-term profits.
Strategically, these retailers reduce prices on specific KVI items (Known Value Items to the customer i.e. Coke, Tide) or even on destination departments such as Produce or Meat. This Retailer strategy is done to entice customers to shop repeatedly and gain familiarity with the retailer and its products/services. But, once the retailer gains significant critical mass/customer traffic, gradually they will increase retails to be more competitive. This is usually done slowly to avoid sticker shock.

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