Develop marketing solutions to beat the global economic
crisis
Masahudu Ankiilu Kunateh, Ghanadot
Accra, July 26, Ghanadot -
Unilever Ghana Chief Executive Officer, Mr. Charles Cofie
has cautioned that The last thing for businesses to do in
the face of declining sales, is to take the problem out on
consumers and reduce product quality while raising prices.
The Chief Executive Officer (CEO) of Unilever Ghana, Mr.
Charles Cofie has cautioned.
He indicated that companies would rather be wise in
committing a substantial portion of their marketing budgets
to reinforce the core brand proposition of their main
brands, since empirical evidence from the 2001 to 2002
recession shows that consumer goods categories that were
able to increase market shares by actually capturing market
shares of weaker rivals, did so by maintaining or increasing
their spending during the turbulent time, and were able to
do so more cost effectively than even during the good times.
Mr. Cofie observed that as a result of what he termed
‘recession psychology’, consumers have adjusted their
behavior in fundamentally different ways, and while some may
continue to live for today and therefore be unconcerned
about saving money for heady days in the future, others who
may feel extremely vulnerable and hard hit, will just slam
the door hard on consumption patterns so to eliminate,
postpone or decrease all types of spending.
“Consequently, we should not expect consumers to respond in
characteristic manner to our marketing programmes and
activities they have come to know over the years.”
Mr. Cofie was speaking at the maiden Graphic Business
Roundtable Forum on the theme: Turn Around Strategies During
Global Recession held at the Alisa Hotel in Accra. He was
addressing the issue of Tools to overcome Global Recession.
The Unilever boss said as companies begin to feel the pinch
of the recession, “the temptation rises to look for all
possible means to save money” and one of the first
casualties turn to be advertising and promotion budgets.
He advised however, that it is imperative for businesses not
to become complacent but they should push at maintaining and
even growing market shares for the simple reason that
shoppers of branded goods will not give up on product
quality and they will continue to search out trusted brands
at the point of purchase, arguing that it is not true
shoppers always go after the cheapest alternative.
“They balance perceived price against quality and affinity
of the brand and so for marketing practitioners, this is
actually the challenge for us to strengthen brand equity.”
Describing the current downturn as one that “appears to be a
perfect storm,” he said it is “set with the entire spectrum
of all the factors that impact negatively on consumer demand
as well as the operating margins of enterprises.
"Specifically, we have a decreasing consumer
confidence, decreasing consumption, rising consumer prices,
under inflation, disposable incomes being squeezed, defaults
of mortgages and consumer credits, increasing power of
retailers and rising input cost,” unlike the recessions of
the ‘70s, ‘90-‘91, or even the 2001-2002.
According to Mr. Cofie, in Ghana the recession is further
compounded by a cedi that has depreciated substantially over
the last couple of months, and it is the greatest concern of
local chief executives.
He said in times of economic uncertainties, it is the low
income consumer who is affected the most, and available data
show down-trimming, downsizing and channel switching is
underway globally and also right here with us as Ghanaian
consumers rely more on staples and basic goods.
“People are switching from saving time to saving money,
households are taking fewer shopping trips and average
basket sizes are becoming smaller.”
Mr. Cofie said in the developing world, the marketing task
faced by marketers even in good times, was designed to
change consumer behavior and to bring new users into their
category and also to create the habit of regular use through
group education, product demonstrations and sampling, among
others.
But the current global recession has considerably changed
the scope and content of the marketing job, he said, “and
since the current recession has been unusually severe,
consumer confidence and trust in businesses are at
exceptionally low levels.”
He said market uptake depends largely on consumers having
disposable incomes, feeling confident about their future,
trusting in government, business and the economy and
embracing lifestyles that encourage consumption.
Mr. Cofie therefore asked marketers to plan differently;
they should pay attention to preparation; focus
communication on reassuring consumers that the same old
brands deliver the trusted quality they are associated with;
reduce spending on promotion in favour of building brand
equity; manage price to maintain price relativity and pay
attention to packaging, among several other suggestions.
Ghanadot
