leaders have followed a disciplined approach empowered by strong research tools to navigate through the challenging times .
Successful marketers start by understanding the pricing landscape and decoding the driving forces that determine the magnitude of impact their category and segment will face . They map out cross-elasticity across existing offers in their space to find the best competitive position to innovate in .
To build an inflation-resilient innovation portfolio , marketers must bring differentiation to the space to reduce substitutability . Overlaying claims beyond the category ’ s core cost-of-entry has proved effective overall , but the key is choosing the right claims that offer superior “ permissibility to pay ” and choosing brands with the right equity to carry those claims .
Marketers must also constantly adapt their pipeline based on changing consumer behavior and attitudes , while balancing value and premium innovations to protect profitability .
When a price increase is inevitable , whether to increase price directly , or indirectly using discreet approaches like downsizing and
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In terms of consumer behavior , the world has seen many taking up a variety of steps to cope with the new reality where prices are rising more quickly than incomes making it difficult for many to afford basic commodities .
cost reduction , is a delicate choice . To be successful marketers must balance shortterm gain and long-term risks .
At Ipsos in Kenya , we evaluate thousands of innovations propositions each year and the relationship between concept performance and pricing resilience are often examined . One performance that continuously stands out as showing high correlation with price resilience is differentiation . Innovations that offer distinctive benefits reduce substitutability and consistently outperform competitors in withstanding price increases .
From the propositions we have tested in Kenya , we found that innovations that make meaningful claims beyond category entry requirements create differentiation vs . competitors and make them more resilient to price increases . During inflationary times , as consumers diligently seek value for money , overlaying claims beyond basic efficacy claims often provides the justification consumers need to pay a little more than the absolute minimum to get the job done .
At Ipsos , we believe knowledge is the best weapon against uncertainty . When the Covid-19 pandemic first hit three years ago , we helped our clients navigate the rough waters through historical comparisons of crisis cycles of the past .
Chris Githaiga , is the Ipsos in Kenya Managing Director . You can commune with him on this or related matters via email at : Chris . Githaiga @ ipsos . com .
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