Winning With Consumers in Economic Downturn
It is trite to say that we are going through economically challenging times in Nigeria. Inflation is high, consumer disposable income is lower with resultant weaker demand and a growth-challenged economy. Economists say we are in a season of stagflation: persistent high inflation, combined with increasing unemployment and stagnant consumer demand.
Many consumers especially in the middle class and below are reprioritizing what they spend money on: spending more on staple foods (with attendant food inflation), transportation, telephone airtime, and school fees; whilst spending less on discretionary items such as luxury products, branded consumer goods and outings.
Consumers are redefining what value means to them and are broadening their choices. They are SWITCHING to more affordable items; seeking and SWAPPING to alternative packaging sizes and formats; and SQUEEZING by rationalizing frequency and quantity of usage.
In tough times, consumers seek escape and safety. Research in a number of countries indicates that consumption of alcohol, use of condoms and religious activities increase during times of economic recession.
Question for marketers is, how do you win with consumers during these times?
First things first: Get a deep understanding (what and why) of people’s needs and motivations and fulfill those needs. Consumer mapping is imperative in this regard and research would help to deliver this. This entails asking and answering 5W+H questions: Who are the consumers and shoppers, bearing in mind that for some products or services, the consumer may not be the shopper? What do they buy? Why do they buy what they buy? Where do they buy? When do they buy? How do they buy?
Every consumer is a data point, which can be turned into information and insight. The research can be qualitative and/or quantitative. Qualitative enables depth of information, whilst quantitative provides width.
A big challenge for marketers is knowing your best consumer and how to effectively target them such that marketing spend is optimized. This calls for clear segmentation, targeting and positioning.
No brand or business can be everything to everybody.
Look for gaps in the market and ensure that there is a market in the identified gap.
More than ever before, Affordability, Awareness, Availability and Assurance (Trustworthiness) are key factors for winning with consumers and shoppers.
Data also shows that shoppers are increasingly more store loyal than brand loyal. Whilst brand equity is still relevant, majority of shoppers would buy another brand if their preferred brand is unavailable in their preferred shop, whilst only a minority would go elsewhere to search for their favourite brand.
In conclusion, winning in these times would require insight and innovation in order to create differentiation and drive competitive advantage.
Author – Lampe Omoyele
This is very helpful sir. Thanks for sharing!