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FMCG brands: Time for South African marketers to wake up!

A very small number of FMCG brands are making the conscious effort to extend engagement with the consumer beyond product consumption… here are some provocative insights from a South African perspective by Larry Khumalo, Ornico Group marketing manager.

The rest of the brands seem to focus on pushing product sales, nothing beyond arresting the decisive moment. Even then, the very content that is supposed to push sales is generally bland and average, and could very well be coming from one and the same agency or perhaps in-house teams with no connection to the actual consumer landscape. In fact, some of the content is so stereotypical and generic that it becomes memorable based on just how bad it is.

However, there are lessons to learn from the few FMCG brands that are putting effort to create innovative products and connect through great content. These brands have earned conscious real estate within the consumer’s universe, and from all their engagement efforts, guarantee sustained sales. Through analysing their work, they can curate certain trends to show the direction that the FMCG group of categories should head:

1. Emerging Markets
Emerging markets are no longer a buzzword, but rather a standard across all businesses. The spread of brands from mature economies into emerging economies is now a natural progression. Any brand looking to succeed on a global scale must tap into emerging markets in Africa, Asia and South America. For local brands in emerging markets, spreading into other countries emerging markets, like South African brand Shoprite spreading into Nigeria, will turn them into regional giants.

2. Segmentation
The FMCG space is ‘special’ because at one point or another, consumers will definitely interact with FMCG products. However, the shopper universe is more fragmented with tribes (communities that group according to interests and passions) actualising and claiming their space in the consumer landscape.

The question is when FMCG brands will fully recognise this and move in more aggressively to amass the consumer’s attention.

UK publication, Marketing Week, published a brief study called ‘Shopper Tribes’ study by g2 Field Marketing and the study segmented shoppers to arrive at six shopper tribes:

  1. Cost-conscious shoppers hunt for bargains. Price point is a deciding factor in their purchasing decisions.
  2. Functional shoppers consider function and reliability of goods to rank highest when making purchasing decisions.
  3. Status shoppers are shoppers who save up to buy their favourite brands without any regard to price.
  4. Ethical shoppers are those for whom their ethical values strongly influence their purchasing decisions.
  5. Habitual shoppers are consumers who shop out of habit, and mostly their preferred brands.
  6. Social shoppers are consumers who rely on social media and the Internet for reviews, recommendation and experiences.

A consumer, so states the research, could belong to more than one tribe at the same time. Although this segmentation is simplified, it is a simple answer to a grave need for an update of the current Living Standards Measure (LSM) model South African brands use.

3. Consciousness
In the last decade, the consumer has evolved to become more self-aware and informed. For both emerging markets and mature markets, consumers are moving towards environmentally-sustainable lifestyles. Some FMCG brands have sparingly responded with innovation that results in less waste and less pollution resulting in packaging that is biodegradable, reusable or edible.

Brands like Truth Coffee based in Cape Town have pushed the envelope with biodegradable seeded packaging, furthering on the connection between brand and consumer beyond coffee drinking.

Consciousness is also translating to healthier lifestyles with consumers preferring products with low calorie, low fat content and substitute ingredients.

4. Convenience
Convenience is a big deal in the FMCG space and one space where brands have been responding is in packaging. Some brands, like Cardbury, have introduced new convenience ‘snack and seal’ packaging.

Furthermore, for consumers convenience also means the opportunity to customise their own food in order to create their own unique experiences. For example, MixMyMuesli, a German muesli bar, has spread into the UK and Australia offering consumers the opportunity to ‘design’ and package their own muesli from a range of ingredients.

5. Small Batch Production
There has been a rise in the small batch production trend globally. For many South African consumers, this was apparent at the rise of the craft beer movement which was brought to the mainstream by the genius entrepreneurial duo, Rui Steves and Brad Armittage, behind the Vida e Cafe brand and Brewers & Union Beer Saloon in Cape Town.

Steves and Armittage introduced to the South African market a range of German beers, Brewers & Union and from then, microbreweries have mushroomed across the country, pushing innovation in beer brewing. A craft beer movement for beer enthusiasts has grown with craft beer festivals happening across the country featuring small brands like Jack Black, Devil’s Peak Brewing Company, and Darling Brew among many others.

With the small batch production trend, some FMCG brands have responded with limited-edition releases of products like Starbuck’s coffee liqueur, and Red Bull’s cranberry (red), blueberry (blue) and lime (silver) flavours. Pick n Pay also has a range of deluxe edition in-house merchandise called PnP Finest Society which promises high quality ingredients and gourmet-style food.

This trend also speaks to an intense focus on production process and quality output. Nano producers like small farms, small factories and home industries have found a space within the small batch production trend to display their products, with food markets opening across the country. A connoisseur following easily forms around small batch produce because some of the products can be quite niche and this intertwines with tribes within the consumer landscape….. Read the full article

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