Marketing in a recession

The economic landscape in Nigeria has been a cause of worry in the past few months; everyone on the street feels the pinch! In some respect, imported products are gradually giving way to locally produced products, especially on consumable items.

Nigeria is officially in recession, going by the release of the second quarter report of the National Bureau of Statistics that states that for the second quarter running we are in deficit of GDP growth. The decline of the Naira against the dollar has never been this bad – with rates going as high as 420 to a dollar.

With Nigeria being a highly import dependent country especially on consumable items, the hike in dollar rate has prompted a lot of clamour for “buy Naija” with many households adjusting their taste buds to fit with current reality, in order to manage household expenses. Even at that, a lot of people are feeling the hit as the dispensable income is buying less than what it previously could buy.

The current scenario offers local brands an opportunity to recruit new users and grow their franchise. However, beyond consumers just deciding between imported and local brands, there are many competing brands locally to choose from; as such it is important that brands devise strategies to win in the competitive landscape.

Some valuable survival tactics are listed below:

Maintain brand visibility: The most likely reaction of most organizations is to cut the marketing budget. This will not be a wise decision given that every brand will be currying the favour of consumers and it is important not to be lost in the crowd. There are many innovative ways of maintaining brand presence without going above the top – the mix of the marketing plan can be altered or skewed towards certain demographics, channels or locations. For example, buying a 15 secs radio spot rather than a 30 secs slot would reduce spend and still sustain brand visibility.

Understand the changing consumer behaviour: In a time of recession, consumer behaviours and habits change. This is not the time to rely on old consumer data, the behaviour of consumers will be altered in many ways that could affect their buying decisions, consumption habits and even their media choices. It is quite important for organizations and brands to understand how these pattern evolves and tailor their campaigns along those lines.

Communicate value for money: Consumer expectation will increase and they will demand product performance from brands in exchange for their money. They will be more discerning and price conscious and would likely trade down on volume and quantity purchased. This is the time to let consumers know the value they are deriving from your brand as the competitive landscape will be quite intense. Value communication will be relevant at points of sale and at critical decision points.

Be careful of price cuts & promotions: Price war may be the order of the day during a recession, while it is okay for brands to execute occasional price discount to identify with consumers, there is an extent to which pricing can be used as a leverage before it starts impacting the bottom line (especially with respect to low margin brands) and ultimately the brand value.

Critical times call for critical actions! As much as buyers are looking at options to stretch their available funds, they still need to be assured that they are getting the right brand experience; while marketers need to ensure that they are deploying their funds in areas that will generate the most returns.