MARKETING
Managing Your Marketing Goals Amid Price Inflation
By Isaac Ngatia
Could 2022 end up being another daunting year ? This seems to be an underlying question given an increase in prices of most goods and services . The challenges facing markets this year come on the heels of the previous twoyears impact from the pandemic because of the Covid-19 pandemic , hiccups in global supply chains and shortages in various products .
The resulting market scenario has therefore left businesses across sectors grappling with another round of uncertainty . In addition , the geo-political situations , both regionally and globally are adding fuel to already high blaze . Zimbabwe just announced a 191 % inflation in June 2022 , according to recent media reports . Sudan still commands an inflation rate at 192 %. The changes in oil prices in the first half of the year had only exacerbated the situation , as crude oil was over US $ 100 per gallon . There was hope that oil prices will decline in H2 , as it falls towards the US $ 90 per gallon . However , this is still fluid and depends on various macro-economic factors .
Prices for basic consumer goods have risen quite sharply , with month-on-month changes ranging from a few percentage points in some markets to double or even triple digit increase depending on the market and the product . Energy importing countries are the ones that take the greatest hit .
However , like the proverbial two-sided coin , the current situation has stories of both sides of the divide . For instance , the increase in oil prices is a pain to the oil importing countries , but a boon to the oil exporting ones .
Hence , it is important to look at the underlying factors within each economy , within each sector , sub-sector and even within a given category . In addition , understanding the cause of inflation is important especially in managing the price increases and price variations . Prices may change but value should hold . It is important to clearly understand what customers want , what the emerging trade-offs are , and how the market scenario is impacting the share of wallet on your products .
While there could be some blanket strategies from a macro-economic level , the key is to understand the positioning of each category , product line or even SKUs . Will your consumers change their SKUs ? Will they seek alternative products ? Will they alter their buying habits ? … etc . Understanding your consumers behaviour helps better navigate through the
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It is the impact of inflationary price pressure to disposable income on the target end-users that affects the market . Understanding how this impact affects the share of wallet of your consumers ’ spending on your product is very important . It presents an opportunity to adjust to market realities . inflationary pressures .
Communication also remains a key aspect that brands should not ignore . This is a period when consumers are trying to optimise their spending , sometimes squeezing their wallet to the last available coin . Whether it ’ s in optimising or squeezing the coins , brands should keep their communication alive . The tone and messaging should also resonate with the consumers . Make it realistic to the period . For example , communicate something else on your brand values other than price when consumers know that your market prices have gone . The essence is to keep your brand presence not only in the consumers ’ mind , but also as relevant .
It is the impact of inflationary price pressure to disposable income on the target endusers that affects the market . Understanding how this impact affects the share of wallet of your consumers ’ spending on your product is very important . It presents an opportunity to adjust to market realities ; deepen or re-establish the relationship of your product to the market ; or introduce new products ; extend the product line ; or just be more agile to your customers .
Finally , it is important to look ahead and understand the period will pass . Seasons come and go and having a realistic forecast can help to make a judgement how the market will shape up after this inflationary period . Updating your forecast on a regular basis is an important step . The lessons during and after the pandemic show that even outlier variables can drive the market in either direction .
Isaac Ngatia is a marketing research consultant within the Africa and Middle East region . You can reach him on this and related issue via email at : Itngatia @ gmail . com or on Twitter @ IsaacTN .
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