9+10 - Branding Challenges & Opportunities

Question 1

current context

Answer 1

• new consumer behavior + movements (due to covid)
• Russia’s invasion of Ukraine
• supply issues
• inflation (9.3% Portugal)
• need for climate action

Question 2

trends before covid

Answer 2

1. new marketing paradigm
2. re-shaped consumer priorities
3. distribution challenges

Question 3

1. new marketing paradigm

Answer 3

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

Question 4

2. re-shaped consumer priorities

Answer 4

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

Question 5

health concern

Answer 5

• focus on natural ingredients
• shifted from “low calories, no fat, no sugar” to “real food, no chemicals”

concern: “in-me” -> “on-me” -> “around me”

Question 6

new perception of performance

Answer 6

consumers tend to accept less efficiency for products that are more natural + authentic

• “real implies imperfections”

Question 7

resistance to consumption in developed countries vs cult of consumption in developing countries

Answer 7

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

Question 8

trading up vs trading down

Answer 8

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”

Question 9

3. distribution challenges

Answer 9

for consumers, line b/w retailer + manufacturer brands is blurred

-> retailer brands receive more margin from selling manufacturer brands than selling their own brands

Question 10

consumer perception of distribution challenges

Answer 10

pricing gap is greater than quality gap
- manufacturer brands need to increase perceived quality through innovation

Question 11

pricing strategy of manufacturer brands

Answer 11

high levels of promotion
- 57.3% sales made on promotion (PT, 2021)

Question 12

impact of covid-19

Answer 12

1. home
2. sustainability
3. increased e-commerce + digital services

Question 13

1. home

Answer 13

• home-nesting
• 28% increase in home related shopping (2019-20)
• increase in home care products
• increase of DIY products

Question 14

2. sustainability

Answer 14

opposing consumer behaviours, main purchase drivers:
- call for action (1/4)
- price driven (3/4)

-> in PT, call for action: 5-10%

Question 15

3. increased e-commerce + digital services

Answer 15

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

Question 16

current purchase drivers

Answer 16

price
income
sustainability

• widening polarization of consumer segments

Question 17

inflation

Answer 17

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)

Question 18

price

Answer 18

consumers were already switching to lower prices + private labels b4 ukraine war

Question 19

income

Answer 19

increased polarization b/w low and high-income consumers

low: higher intention to save money
high: higher intention for quality

Question 20

sustainability

Answer 20

healthy + sustainable products remain a priority for European consumers

• huge gap b/w consumer sentiment & environmental action (80% vs 7%)

Question 21

widening polarization of consumer priorities

Answer 21

main purchase drivers:
- low price
- sustainability
- premium for high-involvement categories
- community influences

Question 22

how should brands face communities (new marketing paradigm)

Answer 22

build a strong brand purpose
address communities’ problems
obtain feedback

-> diversity is the key to better understand communities

Question 23

ad-evasion

Answer 23

control of touch points (pop-up blockers, zapping…)

• interruption marketing = enemy
• permission marketing = volunteer to be marketed to