By Godwin Anyebe
It is no longer newsI that, recent years have proven to be a difficult period for brand handlers in Nigeria. Besides the worst economic recession and rising unemployment, Nigeria had a national elections and a change of government. It was a real crisis together with an expectation crisis that strongly affected consumption. For the first time in many years, Nigerians are finding it difficult to survive.
This situation affected brands very strongly. According to a Nielsen study that analyzed 35 product categories, lots of brands have lost their market share. They lost position not only because of a generalized decrease in consumption but also due to growing importance of value brands and own label.
As the communication reel from the last year shows, many brands fail to adapt their message to the new mood. Others just don’t say anything: explaining why brands don’t do anything for them, it was gathered some of the leading brands in Nigerian financial sector have been charging customers without communicating the reason.
While it is believe that, brand is the most powerful intangible asset, understanding a brand’s worth to the business in financial terms is also an essential part of managing, protecting and measuring it. Identifying exactly how the brand contributes to revenues means it can be strengthened and improved to keep the business relevant and competitive.
Experts are of the view that, the strategy is not to lower your price and communicate that your brand is worth it because it performs better or yields more. In a time of uncertainty yield and quality reassurance can be very powerful.
However, this works better in those categories where performance is a real concern for the consumer and there is an image that low price brands may not perform as well as leading brands. There is performance risk and you only remind the consumer about it.
Interestingly, consumers don’t necessarily cut spending during a recession; they just change what they buy, either to stretch the value of their money, or spend on what is most important to them. A study of the 2008-2009 recession found consumers increased food purchases but avoided mid-tier brands and looked for more bargains. In 2022, flight and luxury goods purchases were up; retail and new car sales decreased.
During the 2008 recession, many brands responded to uncertainty by cutting brand-building spend and shifted investment to direct response and coupons. But that approach according to experts, is a huge mistake. Simply because consumers have long memories. Even if sales of discounted brands temporarily increase, consumers are likely to ascribe a lower quality moving forward and purchase brands that did not discount when the economy recovers and their purchasing power increases.
In fact, most companies cut back in every area of the business and start slashing prices to accommodate the shifting demand curve. While this may help in the short term, this strategy can actually damage both the company and its brands.
Analysts believe that, there are tremendous lessons to be learned from previous recessions. For them, not everyone automatically loses out during an economy slowdown or recession. It is also important to note that, Historically, companies who invested in their brands during hard economic times retained their core audience, attracted new consumers and emerged stronger in the end.
For marketers, they may feel like recession period is the worst time to be a marketer, but, it may be the best time to build brands. The companies who maintain a strategic perspective and invest in their brands will rebound from a recession stronger from the experience. Weaker brands may not exist by the time the economy re-surges.
Checks show that, abandoning or neglecting your brand as markets tighten, only makes matters worse. Historically, companies who properly support their brands with cost-effective measures can retain and even gain share in the face of lower-priced alternatives. These same companies will be best positioned to enjoy the fruits of their labor when the economy inevitably returns to growth.
For example, following the U.S. Stock Market crash of 1987, Nike one of the world leading brand tripled its marketing spend and emerged from the recession with profits nine times higher than going in. Taco Bell and Pizza Hut also took advantage of this recession, promoting themselves heavily, while the market leader McDonald’s, cut back. This investment paid off by significantly narrowing McDonald’s category lead.
Speaking on how a brand can attain its full potential in an economic recession, Doreen Wang, Global Head of BrandZ™, Kantar Millward Brown said, New and emerging digital technologies, channels, and formats offer opportunities to boost equity. Digital channels have a huge role to play in strengthening engagement by making a brand more present and active in consumers’ lives. Fully leveraged, digital channels can be used to develop and amplify brand attributes through a consistent, relevant, and compelling 360-degree customer experience. This will create the associations and perceptions in consumers’ minds that predispose them to choose a brand. The opportunity is enormous, but it must be pursued correctly.
According to her, multiple digital touchpoints and interactions offer opportunities to capture data on how consumers interact with and perceive the brand. This allows marketing activities to be optimized at exactly the right points in the customer journey to build relationships in the short term, and loyalty for the long term. Immediate feedback can be used to personalize the customer experience and communications.
She allso pointed out that, it’s also imperative that the security strategy is integrated with the digital strategy. For the sake of effective data protection and information management, security controls need to evolve as the business adopts new technologies and ways of working, and as customer journeys develop. As a business becomes more customer-centric, data should be sufficiently protected at every point it is collected, shared, used, and stored.
Also speaking, a brand and marketing analyst, Adewale Okoya stressed that, consumers expect a seamless experience across all channels, and every interaction should reflect the brand’s values and work towards a collective purpose. First, the digital strategy needs to be aligned across all channels. This may sound obvious, but nearly one-third of marketers aren’t setting integrated digital strategies across desktops, laptops, mobile devices, and social platforms.
For him, some sixty percent of the financial value of a brand is made up of its equity—in other words, the consumer’s predisposition to select it. Strong earnings and financial management by the parent company are key, of course, but the opinions of the people who buy the brand are the most important driver of value.
Finally, trust in institutions tends to decline during a recession, so brand building will be very important. This influences everything brands must do during these trying times, beyond mere advertising, social media, and marketing, to affect how they connect and communicate with the public/consumers.
Building and maintaining strong brands is the best way to minimize business risk, especially during the recession. Retaining trust in existing customers prevents them from choosing other brands, while building trust in prospective customers opens up new opportunities. The best way to drive trust is through a strong brand presence and strong creative messaging.
