What actions to take taking into account market trends and changes in consumers?
by Claudio Fazzone*
Before suggesting actions to be carried out, we must know some of the main trends in our market and the buying habit of our consumers.
- Concentration: both in marketing and production, the concentration of volume in fewer companies is a trend that began several years ago and seems to have no change for the near future.
In the field of retail, the growth of large supermarkets, large chains, brand chains and purchasing groups are increasingly taking over the market. On the production side, the purchase of companies also marks this path, from the great Akzo-ICI merger, to the cases at the regional level: CPPQ with the purchase of Paracas and Tekno in Peru, in Chile, Industrias Ceresita with Sipa and Soquina as that of Tricolor with Revor, Sherwin with the purchase of Cóndor in Ecuador ... concentration.
- Regionalization: companies, both producers and marketers, are experiencing significant growth at the regional level. The growth indicators that have been taking place in our region, added to a medium-low level of development, generate an important opportunity that they do not want to miss.
- Changes in the consumer: on the consumer side we see that we find a process of changes that does not cease, a greater awareness and preference towards products that take care of the environment, a higher level of information, a growing association of the act of painting to decorate, strong concept of Value, lower rate of Loyalty: having such varied offers the consumer constantly seeks the best option, and a greater valorization of time that makes more and more people make the prior consultation of products on the Internet and, still incipient but growing, buy paint by this means! .
These situations of market trends and changes in the consumer, is representing us as manufacturers and retailers (retail companies) greater complications to be able to participate, grow, and maintain ourselves!, in the channel, achieve the loyalty of the public and customers, and achieve competitive advantages that allow us to differentiate ourselves from our competition.
On the other hand, many of our companies have their highest sales volumes in the traditional channel, but in the face of these trends we must ask ourselves: is the traditional channel prepared to compete? Can it resist the advance of chains and large surfaces?, it is in this aspect where we must work to help our customers to improve, to prepare them to compete. If they can grow in this context, we will do so together with them.
To work on this we propose a series of actions with a focus on the Brand, Communication, Distribution and Loyalty as central axes.
The brand, adding value
When we define a brand we like to mention that it is a contender of attributes with which our consumers are attracted and by which they identify us.
A brand is much more than an isologo, in short the isologo is the graphic expression by which we are recognized, but by itself an isologo does not generate preferences, its graphic can draw our attention, its color, but if it does not have the Brand attributes that differentiate it and generate preference with the isologo alone we will not gain participation.
As we mentioned, we have to work on adding Value to our brand constantly, adding attributes that generate preferences in customers and end users.
If we think of a paint brand, we could point out as basic attributes the quality, the price, the variety of colors, attributes that if they did not have them would be more than complicated to be able to participate in the market. But if we add others to these attributes that allow me to differentiate my offer such as guarantee, technical service, promotions, my brand begins to differentiate itself from others. These would be what we call valued attributes. Finally we find the differential attributes that make my brand can become the market leader, we point out among these attributes empathy, commitment, innovation, the spirit of leader.
In graph 1 we show a pyramid of attributes of a Retail company, if we want our consumers to choose our stores to buy, we will have to think very seriously about thinking about them.
Communication
The form of communication is changing, because the consumer changes. The multiple media options, the lack of time, the access to too much information, has to make us rethink our way of relating to our customers.
The great change we are experiencing, with the explosion of social networks, is leading us to look for new ways to communicate. Our great goal is to conquer people, to talk to them concretely about the benefits that our products and services can bring to the act of painting. The focus is on people.
Based on this, everything we do has to be thought of people, from the packaging of our products – we talked about this topic in previous editions of Inpra –, to the website, from retail, the place where I exhibit and sell the products to the place where I attend the queries and claims of consumers.
An important part of communication, which we often neglect, is the work we have to do with the sellers of the stores, the dependents. It is usual to see how many companies invest significant sums in communication but do not take into account that the consumer when he attends the point of sale, perhaps motivated by this communication, finds a dependent who is not informed of this communication, even perhaps he does not know the attributes of the product that is being communicated and that by his previous experience ends up recommending to the consumer a brand different from the one that the consumer came to look for. Paint shop staff should be part of our communication strategy.
Finally we must take into account the message and the means to be used with the professional public. It is a different audience that requires different communication and where today thanks to the development of technology we can think of actions from one to one. From the experience we have had with some of the companies we work with, designing and implementing actions one by one with the professional public generates very satisfactory results.
Distribution: development of the commercial channel
When analyzing the issue of trends we see how the traditional channel of commercialization of paintings is losing participation versus large stores and regional chains. The main drawback we see for factories in this issue is the risk of losing brand presence in the channel. In general, large customers do not usually market complete lines of products of a single brand, they have their own and / or exclusive brands, and, in terms of image, they prioritize their own retail brand.
How can we as a factory continue to have a presence in the channel?, working with the traditional channel. Provide support and assistance to it, working with a relationship and loyalty program, training them, improving their stores. As the traditional channel strengthens, it becomes a painting specialist, providing differential services and products will have the opportunity to grow. As they grow, we as a company will grow.
There are different ways to work with traditional merchants, providing a chain brand, a product brand endorsement, or through programs that maintain the presence of the merchant's brand. All these strategies can be valid and the degree of development of the channel and the merchants that form it, will say which of the strategy will be the most appropriate.
Loyalty
The last of the initial strategies we propose is to build loyalty. Loyalty to Customers and consumers, end users and professionals. In relation to customers, we saw in the previous point the importance of working with them to improve their businesses by providing support in actions that help them improve their image and sales, with a comprehensive program that constantly provides value.
As for the end user, the development of differential actions such as advice, the visit to the work, the use of technology, having modern stores, with trained personnel. Approaching with communication and actions more and more to each of them.
Finally, with respect to the professional public, understand that it is part of our business, that it is vital as a buyer and recommender, that the link we manage to generate between our brand and this segment of buyers, will depend on a very important volume of paint. As for this audience, our recommendations will be focused first of all on segmenting by activity (painters, automotive painters, architects, builders ...), on the other hand to investigate in each segment the specific needs, develop the actions to cover them and finally develop activities that lead us to maintain a constant level of relationship: training, product presentations, events, others.
Conclusions
We are living in a time of change, we feel that in the Latin American market there are opportunities to take advantage, not all strategies have to be the same but from our previous experience we see that, if we bet on giving better services, products and shopping experience to the final consumer, if we maintain a constant relationship with our professional clients, if we care and occupy ourselves! to make our customers grow, if we develop differential brands, we have a lot to grow. You just have to propose it and develop the Program!
* Claudio Fazzone. Director of Venmark. Information: [email protected]. www.venmark.com.ar
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