Merging Brands
As consumers’ willingness to pay a premium for a preferred brand or flavor or product feature decreases in response to hard times, the number of brands and varieties on supermarket shelves is contracting.
A manufacturers’ decision to pull a brand is driven by the fact that each brand and SKU adds production, inventory, distribution, and marketing costs to the entire product family.
And, of course, Darwinian retailers have always weeded out weakening sellers.
Must a company that has invested in brands and varieties in expectation of future profits simply abandon the goodwill (consumers’ willingness to buy what’s inside the box because of expectations triggered by what’s on the outside of the box) its hard dollars have bought?
Not necessarily.
It may be possible to merge brands or combine varieties within a brand, adding some-to-many buyers of one to the existing consumers of the other.
Careful identity tactics and implementation strategy based on insights into how and why a brand lives in its retail context can preserve some of that invested capital in larger sales volume for the surviving brand or varieties.
For the company, the consumer, and (some would argue) our resources-depleted world, using the current down cycle to simplify your offerings by merging brands and varieties seems worth serious consideration.
Tags: labnotes, namelab, Strategic Branding