It’s no secret that consumers are struggling as the costs of necessities continue to skyrocket. According to some estimates, U.S. consumers are now shelling out 57 cents of every dollar for basics…they’re sand climbing. That’s the highest percentage since tracking began in 1960.
Worst of all, this signifies a huge decline in discretionary purchasing power. Translation: consumers aren’t spending on extras. They’re digging more deeply to find true value for their dollars. And they’re switching brands if they feel one delivers more value than another.
The net result is that it’s tougher than ever for companies to count on customer loyalty. The time has come to not only talk about improving perception of brand value, but to actually do it.
For many consumer product manufacturers, value equates to pricing. And while consumer perception that correlates strong pricing with great value is relevant, it’s not the sole indicator. Today’s consumers are complex. It’s important for companies to assess which assets consumers place the highest value on when it comes to products and packaging, and to deliver them.
Redefining “value”. Doing this first requires a shift in mindset. “Value” is an overused advertising buzzword that has been rendered meaningless. The very word must be redefined as the key focus of an updated brand strategy.
When analyzing product categories, marketers should hone in on uncovering the category-specific values that are most meaningful to consumers. Relying on the brand’s assets alone isn’t sufficient-it’s essential to unlock values that resonate with consumers and leverage them in products and packaging.
Think iPod, or iPhone. Consider the products and how they’re packaged. They raise the cool factor to the tenth power because of their smashing attention to design, and they also enjoy equally cool packaging. Packaging that builds anticipation and enjoyment as consumers gradually unfold layers to reach the ultimate “prize”.
Price is simply not part of the value equation when it comes to these Apple products, otherwise consumers would purchase cheaper MP3 players and cell phones. Apple’s greatest value lies in the company’s daringly innovative designs. The brand knows it and so do consumers-and it leverages those assets to the max.
However, when it comes to basic commodities, pricing is obviously more of an issue. Products must be priced in line with consumer expectations (unless the perception is that they offer something extra).
So, how do some brands earn that perceived higher value quotient in the eyes of consumers?
Take a look at Birds Eye Steamfresh frozen vegetables. The packaging is the vessel that actually prepares the contents-five minutes from freezer to microwave to table. Graphics depicting tempting veggies next to a microwave hit a chord with consumers and instantly explain the benefit: greater convenience.
The brand’s packaging innovation has infused new consumer interest into the entire frozen vegetable category. More value? You bet. Proof that it works? Birds Eye’s Steamfresh Frozen Vegetables was number two on IRI’s “Top 10 New Product Pacemakers” for 2006 to 2007, with $87 million in sales.
Reusable packaging is another factor seen as a major plus by consumers. Women like being able to store foods or beverages in the packaging they purchased them in, until they’re used up. Then, they like to repurpose the packaging, if possible. Nothing new there. But what about packaging that lives on and on?
Arm & Hammer’s Essentials Multi-Surface Concentrate cleaner was marketed directly to consumers on a dedicated website. In a brilliant stroke, the company offered an empty 32oz bottle with a cartridge that creates a cleaning solution when tap water is added. The bottle is used over and over as the consumer purchases refill cartridges.
Of course, the company can still count on repeat sales for the product, but in a different guise. Isn’t it cheaper, and smarter, to ship compact refills instead of full-size packages that are mostly filled with water?
Less is more. Along with waste and recycling concerns, consumers are more interested than ever in purchasing in bulk. Why? It’s not only a cost-cutting measure, but an emerging trend. Consumers are cutting down on their creation of waste and, therefore, are looking to reduce the amount of packaging they take in wherever they can. The new mantra: less is more.
Witness the slow-down in sales of bottled water singles. Consumers are opting to purchase in bulk and to refill single bottles or their own plastic containers so they can continue to take water with them on the go.
How can manufacturers of bottled water capitalize on this trend? Could they offer consumers a single, branded reusable bottle with the purchase of several gallons of water? Wouldn’t consumers continue purchasing from an eco-conscious company that offered this choice? How can such an offer be marketed on existing bulk packaging?
Additional value-added product and packaging ideas that are meaningful to consumers can also be leveraged. For instance, “Made in the U.S.A.” is a huge selling point (if applicable) in light of recent product and packaging scares due to lead or bacteria concerns in imports. Another idea: food companies need to continue to pioneer new packaging concepts to ensure prolonged freshness. Anything that can be marketed as directly reducing waste and throw-aways is a plus for that tighter consumer dollar.
Easier-to-open packaging is also important, especially as populations in industrialized nations like the United States continue to age. We really don’t need to bring up the concept of “wrap rage”, do we?
Packaging that makes products easier to store is another important factor. Heinz’s Fridge Fit ketchup bottle stands on its head and fits neatly into refrigerator door racks: a winning concept! Not only is this easier to store, it’s easier to use without waste. Consumers love that!
Research shows that all of these value assets are high on consumers’ lists. There are more, too, and they vary by product category. There is a caveat here, though. Brands cannot successfully leverage these trending consumer values in their products and packaging just by devising some creative advertising. They have to mean it.
Remember, “value” is dead as an advertising buzzword. Instead, there’s a need to authentically embed new value concepts into companies’ and brands’ DNA. Fakes will be easily discovered and discredited by savvy consumers.
With consumer hunger for transparency, honesty and authenticity rising, brands that deliver their products and packaging truthfully and in alignment with today’s consumer values, will be the winners. BP
Ted Mininni is president of Design Force Inc., a metro New York area consultancy that helps clients market brands that deliver positive, gratifying experiences by connecting consumers to brands emotionally with compelling visual brand experiences. Reach him at 856.810.2277 or visit www.designforceinc.com