9+10 - Branding Challenges & Opportunities Flashcards
current context
- new consumer behavior + movements (due to covid)
- Russia’s invasion of Ukraine
- supply issues
- inflation (9.3% Portugal)
- need for climate action
trends before covid
- new marketing paradigm
- re-shaped consumer priorities
- distribution challenges
- new marketing paradigm
the link w/ others is more important than the brand/product
before: passive consumer (unbalanced relationship b/w company + consumer)
after: engaged consumer (balanced relationship)
now: communities have a role (not shaped by brand)
- higher trust in info coming from communities
- re-shaped consumer priorities
health as a key concern
natural + authenticity and their impact on perceived performance
resistance of consumption vs cult of consumption
trading down vs. trading up
health concern
- focus on natural ingredients
- shifted from “low calories, no fat, no sugar” to “real food, no chemicals”
concern: “in-me” -> “on-me” -> “around me”
new perception of performance
consumers tend to accept less efficiency for products that are more natural + authentic
- “real implies imperfections”
resistance to consumption in developed countries vs cult of consumption in developing countries
soft resistance to consumption - believe it is possible to simultaneously do well & do good (bourgeois-bohemians)
hard resistance - no logo trend + reject excessive consumerism
- resistance to brand communication
trading up vs trading down
polarization of consumption
- trading up: decision based on emotions (high involvement product categories)
- trading down: decision-based on price (low involvement product categories)
-> disharmony of consumption
-> risk of “death in the middle”
- distribution challenges
for consumers, line b/w retailer + manufacturer brands is blurred
-> retailer brands receive more margin from selling manufacturer brands than selling their own brands
consumer perception of distribution challenges
pricing gap is greater than quality gap
- manufacturer brands need to increase perceived quality through innovation
pricing strategy of manufacturer brands
high levels of promotion
- 57.3% sales made on promotion (PT, 2021)
impact of covid-19
- home
- sustainability
- increased e-commerce + digital services
- home
- home-nesting
- 28% increase in home related shopping (2019-20)
- increase in home care products
- increase of DIY products
- sustainability
opposing consumer behaviours, main purchase drivers:
- call for action (1/4)
- price driven (3/4)
-> in PT, call for action: 5-10%
- increased e-commerce + digital services
unequal growth across developed countries
- PT was not significant due to low developed delivery infrastructure
- however, increase in omnichannel practices (browsing online)
persistence of high levels of e-commerce depended on consumer satisfaction
- ex: italy vs china
current purchase drivers
price
income
sustainability
- widening polarization of consumer segments
inflation
more or less 10% (20% in gorcery category)
- 64% of consumers changed their purchase behavior
- sales increase in value = obvious, need to look at volume (exception: hygiene + beauty)
price
consumers were already switching to lower prices + private labels b4 ukraine war
income
increased polarization b/w low and high-income consumers
low: higher intention to save money
high: higher intention for quality
sustainability
healthy + sustainable products remain a priority for European consumers
- huge gap b/w consumer sentiment & environmental action (80% vs 7%)
widening polarization of consumer priorities
main purchase drivers:
- low price
- sustainability
- premium for high-involvement categories
- community influences
how should brands face communities (new marketing paradigm)
build a strong brand purpose
address communities’ problems
obtain feedback
-> diversity is the key to better understand communities
ad-evasion
control of touch points (pop-up blockers, zapping…)
- interruption marketing = enemy
- permission marketing = volunteer to be marketed to
