The pressure of inflation on name brands is starting to show. Prices slashed. Pack sizes reduced. Budgets cut. Innovation postponed. Advertising on hold. All of which ignores the one sure and proven way to win during downturns. Don’t cheapen the brand.
Making sure a brand fits a budget is true during good times, too. So, finding the fit during hard times is nothing new. Harder, perhaps, but the same task as always. Forgetting this causes brands to panic under pressure and cheapen the brand instead of simply finding the right fit for the moment.
BrandZ tracked brand value during and after the Great Financial Crisis up through the pandemic and the recent inflationary spike. The brands that maintained equity and value and outperformed all others found a fit without cheapening the brand.
Five lessons learned about success during inflation for name brands.
- Be Upfront. Consumers know when you’re trying to pull a fast one like shrinking the package without reducing the price. It just makes the brand look cheap. Own up, be straightforward, acknowledge it, and just call it the ‘affordable’ pack or something like that.
- Emphasize Value, Not Price. Don’t try to out-discount price brands. Promote or drop prices as needed, of course. But remember that price brands compete on price all the time. Not so for name brands. Inflation is home court for price brands. They always win on price. Name brands must stand on their strength of value to win the away game of inflation.
- Maintain Continuity. Don’t go off-message. Name brands are known for something and that shouldn’t go away just because price is more important. Worse than off-message is no message from dried up ad budgets. One day inflation won’t be a problem, so don’t create the additional problem of forgetting that will linger on long afterwards. Build momentum now for the recovery soon to come.
- De-risk Purchasing. Don’t make sticking with name brands hard to do. Take the risk out of buying. Offer guarantees and warranties. Step up customer service. Eliminate all hassles and stress points. Use disappointments to re-prove value. Ally with positivity.
- Double Down On Difference. Every great brand is meaningfully different. But meaning is harder when price is paramount. This shift in the tide is hard to fight, so don’t. Instead, remind people what makes a name brand different and thus more valuable. Make people regret trading down—because when they do, they will come back quickly when the pressure is off.
Contributed to Branding Strategy Insider By: Walker Smith, Chief Knowledge Officer, Brand & Marketing at Kantar
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