Did the milk spoil?
June 10, 2009
My friends who work in various industries tell me that sales of consumer goods are falling. Banal. Nothing new under the sun. Let’s take as an example in the dairy industry. A well-known dairy company is facing a sharp drop of over 20%. Another well-known company is giving up a large milk collection basin because it no longer needs as much milk as it had contracted. Finally, a third dairy company is putting pressure on milk suppliers to lower their prices by almost 50%. Another company, which has (relatively) recently entered the market, is facing problems despite having a very good level of brand recognition. One of the so-called star brands of the last two years, with a spectacular former stock market capitalization, is struggling between truth and falsehood on a high awareness level and very steep, downward slope regarding their sales. At the same time, a cheese company seems to have no problem.
What is the difference between them? The first 5 examples are 4 multinational companies and one local one run in the same way the so-called corporate foreign companies work. Far be it from me to criticize management models, I don’t know how to do that. But I find it interesting to report and comment on the statistics of this phenomenon. Especially as I am intrigued by one of the first four I have already mentioned. I studied what is happening there closely to figure out the state of the dairy industry. My X-Ray is simple: the top five are starting to lack relevance and differentiation for the consumer despite their marketing budgets which are quite big and even their austerity. What is more, the fifth company (or brand) was still irrelevant until now, but in the presence of novelty and frequent TV communication, it managed to make, again, awareness and sales. But at what cost? The sixth, the cheese specialist, focused on a specific field, offered a good product at a good price, offered a differentiated presence on the shelf and communicated in the language of a well-defined target without trying to ”sell” their product to everybody. At the top, there is a Romanian company, owned by Romanian people who don’t aspire to list it on the stock exchange and they don’t have any design intentions in order to sell. They have a focused, healthy, clear, simple and direct business, which is adapted to the requirements and it is relevant to a well-defined public. It is also guided by a management and a marketing team that is focused on obtaining real results.
You’re going to tell me I have a problem with multinational companies and the awareness index. Not at all, I have a problem with brand strategies. Today branding is more than anything, everything. Even the craner’s uniform and the cardboard box used for transport matter. I gave two trivial examples, the last links in a result of the brand strategy. Are you familiar with the following messages: ”good and tasty for my family”, ”good for me and my family”, ”so good for my family that it gathers us all around the table”, ”so good and traditional that it comes from my grandfather” and finally, ”buy me ‘cause I’m foolish, don’t you want to be like me”? Didn’t you become so desperate that they need to tell you how family-friendly you are or you should be? Or for the sake of that brand, some secretaries and company or state officials, who get bored to death in the office must be ”different” and they can only achieve that with the help of that brand – a milk brand even? Nota bene, dairy products are commodities, they are part of our daily basket.
It’s not enough to be on the market and say ”I’m here, buy me”. Those times are over. There is a need for a very precise definition of ”offer” in such a way as to be relevant to the potential buyer. Any brand strategy starts with the sources of differentiation. If it doesn’t, it’s time and money will be thrown into the wind of TV campaigns.