Published in Jul-Aug 2022
It is almost dizzying keeping up with the constant price hikes in Pakistan. Food prices have surged by 17.3% and transport by 31.8%. The Russia-Ukraine war has caused energy prices to rocket and exacerbated the supply chain problems left by the pandemic. In this scenario, consumers are increasingly cautious in terms of what they spend on and brands are bracing themselves for further shocks. What can brands do to continue to attract consumers who are now focused on making comparisons when purchasing and hoping to snag the best deal? Here are a few ideas.
1. Value for Money Brands need to find the edge that will enable them to stand out from their competitors. This means reassessing themselves and keeping an eye on the competition. When McDonald’s temporarily stopped offering medium and large-sized fries (read: no upsizing), due to supply chain issues, it presented an opportunity for competing brands like KFC, OPTP and Hardee’s to make inroads into McDonald’s consumer base (what is a burger meal without enough fries?).
2. Bundles and Value Packs As consumers cut down on non-essential purchases, bundles and value packs act as incentives – and large-sized bundles and value packs can encourage them to stock up and avoid future price hikes or shortages.
3. Resist Price Increases Be creative instead. Introduce new SKUs, packaging formats or value packs that offset higher prices. Or make product improvements that justify a higher price. Cocomo’s five-rupee pack which used to offer five biscuits was decreased to four, but because consumers did not see a price increase, they stuck with the brand.
4. Loyalty Programmes and Partnering Most brands tend to overlook these. Yet, now is the time to add value by introducing these initiatives. Clothing brands should introduce reward points to encourage repeat purchases and build loyalty. K&N’s have a solid reward programme and with the hike in food prices, this will help them maintain their market share. Apps such as BOGO, Golootlo and Savyour are likely to do better and brands need to get on board with them. Furthermore, as fuel prices rise, people will avoid unnecessary trips to the market and brands need to partner with grocery apps to make their products available on apps such as Pandamart and Krave Mart.
5. Payment in Instalments This can be a way forward for electronic goods, clothing and luxury brands to make their products more accessible. QisstPay and Daraz offer payment in instalments, especially for consumers who are not ready to immediately part with their cash.
6. Be Import Competitive With the ban on imports, brands have the opportunity to improve their product quality as well as extend their product portfolio – and even charge a slight premium. Dipitt is a good example. They have invested in their products and convinced consumers to switch to their brand rather than buy imported sauces. Local brands can charge a premium and consumers can afford to pay as they are getting a great product that is cheaper than the imported item.
In summary, brands need to get creative and smart with their products and their messaging, and align themselves with changing consumer priorities. They need to incentivise in order to gain new consumers and retain existing ones. Trimming or cutting down ad spend is not a strategic approach and brands that maintain their investment with a steady approach will emerge stronger. These are challenging times for brands and consumers equally. The coming months may even be more difficult. However, with the right strategy, real insights and a few bold steps, most brands will be able to weather the present economic storm.
Sarah Yaldram is co-Founder/Creative Head, Firebolt63.