The double digit inflation is definitely ringing alarm bells for the FMCGs because it is the most toughest product category. To come out strong and with the cash register ringing, lots of things should fall in place for these companies.
These FMCG's should not change their Brand Positioning Statement (BPS) and must stay with it with integrity. What they should change around constantly depending on the market conditions is the Advertising Proposition Statement (APS). This is the contemporaneity - handle on the brand you govern.
Also, they should have a constant feel of the consumer's pulse and should stay contemporary, relevant, original and innovative despite the fact that the product and its BPS has been the same for decades. The advisable thing to do here is - Move the Brand USP on a continuous trajectory of change. The functional product USP should get morphed with the emotional product USP enabling touching of the socially repsonsible USP, such as the one being experiemented by Lifebuoy. Last but not the least, moving it on to the realms of the inclusive USP.
The correct determination of the residing point of a Brand at this juncture needs to be undertaken so that the Brand does not get much affected by the Inflation.
But above all, Markets without challenges dont exist. Isnt it ?
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Three Idiots
5 days ago
2 Comments:
Inflation does not effect the buying behavior of FMCGs because the consumer would go for the discounted store to pick them up. Good observation though about the marketing profile.
Tiger,
Let me give a detailed answer:
Going to the discounted store would not solve the problem of Inflation. A practical scenario is not possible in which Inflation is just applicable for a few stores and not applicable for others.
Inflation is the "increase in general price level". Adding on, Inflation is divided into
1. Demand Pull - This is basically the rising up of prices of products due to their demand in the market.
2. Cost Push - This is the rise in raw materials which are involved in a product.
The reason for the rise in prices of FMCG's are 60% approx. Cost Push and 40% approx. Demand Pull.
Example, the price of flour has increased; and taking in account the rise in petrol prices, the total transportation cost of flour from a farmer's field to a manufacturing plant will increase. This would increase the manufacturing cost of biscuits. Now to make this biscuit consumed by a consumer, a Company should change its Advertising Proposition Statement because the Brand Positioning Statement of Biscuit is not that easy to change.
I hope you got my point.
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