You Need to
Reimagine How You Market Your Brand
Some of the big names in
consumer products are losing share because they can no longer demonstrate that
they deserve a price premium. Make sure you're doing the right things to
communicate your product's value.
BY HOWARD TULLMAN, GENERAL
MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS@HOWARDTULLMAN1
Brands
just aren't bringing it and getting the job done any longer. They used to
represent a shorthand promise based on the simple premise that you could have
basic confidence that you were getting more value for your
spend even if you paid a premium for the privilege. That could be in the form
of quality, durability, safety, ingredients or efficacy -- but we all believed
for decades that something made a brand worth the additional investment. Brands
were also an efficient way to address decision fatigue given the virtually
unlimited shopping and product choices on the web today.
But
now it seems that only those people (entertainers, influencers, gangbangers)
who are utterly indifferent to price are still spending and sporting the top
few big-name brands for reasons having much more to do with reputation,
endorsement payouts and bragging rights than with any connection to reality.
The world's wearing Apple watches these days while the jocks and party people
are still sporting their diamond-encrusted Rolexes. We're never going to
entirely eliminate the ancillary
messaging and emotional considerations that accompany upscale brands that
have little or nothing to do with function or features, but the days of blindly
buying a premium brand for practical, prudent, and economic reasons are long gone
for most products.
When
you read investigative articles that suggest the private label brands at Costco
or Walmart are being manufactured on the sly by the same makers of the branded
goods, it's more than unsettling - it's a wake-up call. People aren't panting
any more to pay up for products that are functionally indistinguishable from
the private labels and even generics, which are being increasingly pushed by
the large retail chains. We're seeing this all over the place, but especially
with respect to the multi-billion-dollar marketplace for over-the-counter
medications.
Millions
of consumers don't believe in much of anything these days, and the MAGAts only
believe Trump, largely due to his eight-year assault on the truth. Brand names
are just one important casualty. The Trumpist war on truth and medicine
throughout the pandemic--which cost them tens of thousands of dead Red voters
-- has really diminished consumer confidence in doctors and drugs in general.
Drugs aren't the whole story, but they're a great early indicator of consumer
brand behavior. As more and more products become confusingly similar and make
identical claims regarding effectiveness, price rather than brand drives the
decision bus.
There
are several explanations for these new customer attitudes toward OTC
medications that will eventually impact the future viability of every major
brand. The players who react and adapt to the new environment and change their
brand messaging, product offerings and customer interactions will survive and
grow; those who choose to rest on their laurels and past performance will ride
their brands right into the ground. Kraft Heinz's lousy results, even with
higher prices, meant a newly-announced CEO. There's still time now - although
Big Pharma doesn't seem to get the picture - and soon there will be plenty of
blame for the losers and also-rans to spread around.
You
could put part of the blame on the pharma companies themselves for clear and
repeated price gouging, which the side-by-side comparative displays at
Walgreens or CVS make abundantly clear to even the most obtuse observer. Wanna
spend three bucks more for a bottle of Bayer aspirin or a tube of Neosporin for
absolutely no good reason? Be my guest.
Of
course, now that Walgreens has decided in its newest urban stores to hide virtually
everything in closed cages or back-of-house, and to use kiosks and
clerks to fill orders, maybe these awkward comparisons, which actually helped
to educate the consumer, will disappear. That would be unfortunate but at least
it won't kill the instant, internet-enabled, comparison pricing for virtually
anything that's going on in every store. This smartphone-based smart shopping
certainly hasn't made life
any easier for the big brands.
Whatever
your budget constraints may be, no one wants to look foolish or feel that
they're being gouged. Mark Cuban's amazing new initiative - Cost Plus Drugs continues
to gain traction and Amazon is jumping aggressively into the pharmacy business
as well, which will clearly help drive drug prices down. It's no accident that
Blue Shield California has announced plans to work with Amazon, Cuban and CVS
on a new distribution system. President Biden's action in locking down the
price of insulin for millions of patients is another amazing step forward.
You
could say that the panache of pharma brands has been hard to polish and promote
when there's so much noise in traditional broadcast channels, where every other
ad is for some disease like TED, RVS or AMD that no one's ever heard of. These
voluminous ads are clearly targeted to the few ancient and infirm people still
watching the tube. Ever since the success of the "purple pill"
promotion, you no longer see the long-recognizable corporate names in their TV
ads. The message is all about some made-up catchy name extracted by an overpaid
ad agency from the drug's technical designation. Doctors now constantly
complain that their patients no longer want diagnoses, they just want the pill
with the cute name or the one that makes the fat go away.
And
while cable subscriptions are largely a function of consumer inertia, the
streamers are spending millions to try to move subscribers upstream to more
expensive, ad-free tiers. They're telling the whole world that ads are
worthless interruptions and an utter waste of time. In many ways, the bipolar
ad industry is eating its own lunch and making its future prospects even more
uncertain.
The
clear implication in all this anti-ad messaging is that only morons and the
poor have to suffer through dozens of ads every day in order to watch reruns,
repetitive ad flights, and pitches for old people. Someone recently said that -
given the average age of its audience - CBS now stands for "Could Be
Sleeping." And that it's really no harm, no foul if you should
happen to nod off because in the online, all the time, connected world there's
really nothing new about the nightly news.
The
message being sent to new generations of prospective viewers (and, obviously,
consumers) is that all of the ads on traditional broadcast channels, cable
stations, and even on much of the new and inexpensive offerings by the
streamers are worthless wastes of their time and attention. As we enter the
2024 election ad cycle and suffer through the noise and clutter and the
indiscriminate spray-and-pray ugliness, the situation will only worsen for the
next 14 months, along with the ability of even the biggest brands to break
through.
The
bottom line for every business is that - while building and sustaining your
brand will be important and challenging - it's even more critical to give your
customers (past, present, and prospective) concrete reasons
to continue to purchase, use and support your products and services.
Two
key things to keep in mind:
(1)
Your team members will be essential to this process because people increasingly
will be more likely to trust your employees, their interactions with them, and
their suggestions and recommendations than anything else. Successful sales
will always be a people business.
(2)
Businesses and their brands in the future are going to have to have and
successfully communicate to the world a purpose beyond
profit in order to connect to tomorrow's consumers.