Ever since the recession began, the consumer products marketplace has been in transition. We’ve had recessions before, but this one was different from the outset.
70% of the total U.S. economy is involved in the manufacture, importation, packaging, marketing and sale of consumer products. Fewer discretionary dollars directly contribute to spending cuts as consumers increasingly buy the basics, pay down debt and save money again. More importantly, fundamental attitudes and behaviors have changed.
As a result, the economy is undergoing a major transformation. Marketers had better respond. Before they do, they need a sound strategy; then, the right tactics to ensure survival. One of those tactics had better include packaging.
With fewer dollars being spent and myriad consumer products in category after category, some brands are simply not going to make it. When the good times rolled, there was a virtual explosion of branded products in every category. Now that the economy is contracting, there are too few dollars chasing too many goods.
Inevitably, strong store brands have been vying to win “the value proposition” based on price, making significant inroads since the downturn. With the perception that private labels offer the same if not better quality at bargain prices, store brands have been a bright spot in an otherwise somber economy.
National competitors try to counter in various ways: lowering prices, reducing packaging sizes or offering bonus product for the same price. But is it a sound marketing tactic to simply hammer on price as value when consumer purchasing patterns are changing—perhaps for good?
How can packaging be used to deliver more value to consumers above and beyond price?
Let’s Talk “Relevance”.
Rather than letting viable branded products gradually lose share, marketers should consider repackaging to achieve cultural relevance in the New Economy.
How about:
•Creating unique, highly differentiated package structures that can add great, stand-alone value?
•Developing packaging to change product delivery systems for the better? Isn’t adding convenience to consumers’ lives a winning strategy?
•Leveraging heritage brand assets that elicit consumers’ fond memories and emotions, making products overwhelming choices?
•Selling premium products’ assets as affordable small luxuries? Isn’t that meaningful to cash-strapped consumers who are eschewing larger purchases for the most part?
•Helping consumers simplify their lives with down-to-earth basic product messaging? Isn’t that something we all crave?
•Touting the cleaner, greener, safer properties of consumer products where applicable? Surveys substantiate this is increasingly resonating with consumers.
Differentiated package structure: Method broke every mold, packaging its cleaning products in unconventional, sleek, see-through bottles. Environmentally friendly cleaning products presented in highly visible, transparent packaging makes perfect sense, doesn’t it? Method packaging shows how commodities can be packaged to elevate product and brand in a unique manner. How can consumers easily compare Method with the other cleaning products on the market? Do they even want to?
Packaging a new product delivery system: Consumers are familiar with Mentos mints in candy roll packaging reminiscent of Lifesavers. Now, Mentos has parlayed its fun image into less conventional packaging. Mentos sugar-free mints are packaged in an ingeniously designed cardboard box with a hinged lid that actually opens and closes with a click. The latch works so well the contents remain inside the box even when shaking it upside down. Simple, functional and unlike the packaging that’s prevalent in the rest of the category, Mentos mints stand out and stand alone with consumers.
Heritage brands: Consumers have long-standing relationships with heritage brands. Those relationships are emotional and highly personal in nature. By leveraging the specific differentiators or unique “personalities” brands are associated with, consumers’ positive emotions are reinforced, so consumers are likely to spend more for products that rekindle pleasant memories and associations.
Rice Krispies’ Snap, Crackle and Pop, Planter’s Mr. Peanut and the talking Kool-Aid pitcher are meaningful “personalities”, for example, to generations of consumers. Leveraging the assets around them in a deliberate manner makes sense. Line extensions and co-branded products benefit from brand personalities and enjoy consumers good will.
Premium brands: The secret to success: leveraging those assets consumers are willing to pay more for. Remember: small luxuries are meaningful to belt-tightening consumers. Quality counts; when consumers are purchasing fewer items, show them the value of buying “better”. Tropicana’s straw punctured orange mnemonic device conveying “100 % real orange juice” is worth a few more cents than the store brand next to it, for example.
L’Oreal hair care products in sleek, upscale packaging look like salon quality brands. The packaging clearly segments the breadth of the product line making it easy to shop. While more expensive than many competing mass market brands, l’Oreal’s mantra: “Because I’m worth it” is the perfect message for today’s consumer; in fact, it has never meant more.
Simplification: Consumers want to pare down and simplify their lives. Packaged products that boldly offer simple reasons and clear-cut differentiation win. Haagen-Dazs’ vanilla bean ice cream is worth more than artificially-flavored vanilla ice cream to many consumers. The company’s new packaging shows how its ice cream is made from five natural ingredients, cashing in neatly on both kinds of assets: “premium” and “simple”.
The premise of the recent Post Shredded Wheat campaign—“We Put the “No” in Innovation”--developed by Ogilvy is a brilliant idea. Post Shredded Wheat is and always has been, natural and simple. It’s made from 100% whole grain wheat, and has been for 117 years. What else needs to be communicated?
Cleaner, Greener, Safer: Some products can rightfully tout they’re cleaner, greener and safer to consume. Even heritage products that have been around for a long time are now wisely leveraging these assets. Murphy’s Oil Soap is one of those brands. The company has intelligently added the U.S. EPA accreditation stamp to the bottom of its packaging with the words: “Design for the Environment”. Another label affixed to the top of the packaging states: “98% Naturally Derived Ingredients”.
Viewing the Downturn as Opportunity.
Times are changing and we must change our marketing strategies, including packaging, to remain relevant. Or we risk losing customers that may not come back in the future. There’s no time like the present to turn a disadvantageous economy for consumer products into an opportunity. By repackaging and leveraging those key assets that resonate most with the customer now, brands will differentiate themselves and prove their value.
Consumers are deliberating more at the retail shelf. They’re more likely to change loyalties, purchasing those brands that increasingly mesh with their values. And, as we’ve seen, “values” aren’t all about price.
That presents risk, but risk also presents the possibility of great reward.
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