Over the past few years private label brands have consistently grown, taking market share from branded products in just about every consumer goods category. The recession has certainly fueled recent growth, but I think something more significant is occurring. Consumers have access to unprecedented amounts of information and communication; they readily share and recommend information about product efficacy and value.
Brand managers now must fight harder to show how their products are differentiated from private label or store brands. Often the differentiation amounts to packaging and positioning, not a very compelling strategy in this economy. Most brand managers are forced to concentrate on the usual suspects, slashing costs, coming up with a new promotion or running ads to make their numbers and keep their jobs.
In the book A Whole New Mind Daniel Pink says “The forces of Abundance, Asia and Automation turn goods and services into commodities so quickly the only way to survive is by constantly developing new innovations, inventing new categories,, and giving the world something it didn’t know it was missing.”
So what is a brand manager to do?
First, understand your consumer. It’s not talking about simply reciting demographic or psychographic segmentation profiles. Understand how and where they use your product. Figure out how and where they interact with your brand. Then, engage them using the appropriate media tools, those they use. For those in regulated industries this is challenging but not impossible. Set appropriate expectations, be transparent and personal. Use the interactions with consumers to find ways to improve products, make them more relevant and easier to use. Typically we marketers view our consumers from our perspective, not theirs. Knowing our consumers will help us create new and innovative experiences that will keep them engaged with our brands by creating value and relevance.
Engaged consumers and innovation are powerful allies.