I know you love me but please just buy me

If video killed the radio star then brand awareness and intent to purchase is likely to do the same to the marketing star. A few weeks ago I was once again exposed to another survey that rated the best, most loved and/or coolest brands. When I looked at the FMCG categories, many of the brands are having mute performances, and I couldn’t help but wonder what the CEO was thinking? “Well that’s all very well but can someone please show me how this is going deliver better results?”

The fact is that many of South Africa’s top FMCG brands are getting hit and getting hit hard. Gone are the days where superior market share and a hefty above-the-line budget where the key determinants for success. The proliferation of new entrants, private label, repertoire brand shopping and savvy shoppers coupled with shrinking margins have changed the game. This means we need to change what we measure and manage when it comes to determining FMCG brand value that will consummately resonate with the c-suite.

I’ve been exposed to many quantitative and qualitative results where consumers said that they loved our brands but their purchasing behaviour was contrary. Many said that they would purchase our brand on their next shopping mission yet they were so easily influenced at shelf to buy another.

Influenced by shopper marketing, the key determinants for FMCG brand value are the drivers behind the brand not the subjective perception of it:

  1. Value and/or Volume growth vs. baseline or SPLY correlated with product profitability
  2. Out of Stock/Availability & Forward Share
  3. Trade spend vs. category and/or competitors
  4. Innovation uptake

Value and/or Volume growth vs. baseline or SPLY correlated with product profitability

In today’s market, it’s rare that you can have both. Increased value without forsaking margin shows that you’re driving absolute growth and should be indexed against the category and competitors as one of the indicators of brand health. Increased volume can be a great indicator that shoppers are buying more as long as one is not cutting into profitability and targeting fickle switchers with no medium to long-term baseline growth.

Out of Stock/Availability & Forward Share

Unseen is unsold. The store delivers more impressions than any other media. Making sure that you “out-merchandise” your competitors is paramount and a lot more marketing focus and resource needs to be centred on this. Secondly maintaining or increasing forward share shows that you have a truly valued brand by the retailer. They don’t just easily relinquish your space to cheaper offerings or private labels.

Trade spend vs. category and/or competitors

Another key indicator, arguably the most important, is the cost of doing business with the retailers versus your competitors and the category. Too often category captains and lieutenants try to outspend instead of outsmart. The key determinant should be: “we spent better/less and got a greater result by surgically focussing on the right shopper, with the right offer, at the right time in the right banner.”

Innovation Uptake

Genuine innovation equals brand survival. By measuring the percentage of successful innovations and the amount of marketing investment required, one can easily determine the material value of a brand. A higher-percentage lower-investment requirement is a strong brand.

Brand efficacy is not about how big. It’s about how smart and the equity strength allowing you to do more with less.

Keep Digging.

Jason Frichol (Frich)

These views and opinions are my own and not those of my employer or customers.

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