Research is the key to recession-proof business strategies
The fact is that economic changes affect all stakeholders, from consumers and retailers to producers. This causes major shifts in the marketplace, with the result that each one of these stakeholders along the product chain is affected and their behaviour altered.
It's impossible to guess the full impact of the recession on consumers and, therefore, retailers, which is where research comes in. Not only can sound surveys undertaken by sector specialists uncover the effects of these economic shifts, but also the changes that need to take place in producers' businesses in order to adapt to this evolving landscape.
This is vital, as manufacturers are under more pressure right now than ever before to make the right decisions that support their target markets to grow, if not just maintain, profits during this time. Poor decisions made at this point could have disastrous long-term consequences.
We are already starting to see the results of these changes, as manufacturers look again at their pricing strategies.
Innovative purchasing strategies
Some producers have initiated innovative raw material purchasing strategies, while others are initiating joint promotions with the producers of complementary products to offer consumers greater discounts. For example, if bread and milk normally cost R12 each and the producers collaborate to offer a R2 discount on each product, the deal - with a R4 saving across two essential items - suddenly becomes very attractive to cash-strapped consumers.
Aside from actively seeking value-for-money deals like this, the current limitations on disposable income are prompting consumers to shift to cheaper competitor brands and products, and to refrain from purchasing nice-to-have products they believe they can live without.
Generally, the economic pressure is pushing manufacturers to focus on different channels and regions as well as to use new media platforms in exciting ways to connect with the end consumer. These include social media and innovative mobile applications.
These are the kinds of insights that are emerging from current market research and it's not hard to see how manufacturers could drill down deeper into these trends to find their competitive edge and, in doing so, sustain consumer loyalty.
The recession will not be here forever and, when it's over, consumer behaviour will change once again. Research will ensure you see that shift coming and are able to adapt and respond quickly, tapping into that all-important loyalty you were able to sustain through the recession as a result of the informed choices you made.
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