CMSWire: End of the Price Game: What Marketers Must Do Next

This article was written by Greg Kihlström for CMSWire. Read the full article here.

In economically uncertain times, it would seem safe to assume the best way to win over customers hinges on this uncertainty. Yet, relying on price as a primary market differentiator is growing increasingly unsustainable for CPG brands. This is no longer a theoretical concern, but an operational reality.

In Zappi’s latest CPG Mega-Trends Report, 80% of shoppers say their grocery bill has gone up within the past six months. As many as 25% of households are spending over $250/week at the grocery store. Consumer Packaged Goods companies looking to drive price-led growth will face tough headwinds. Shoppers are savvier, smarter and more value-conscious than they’ve been in the past decade — all while taking bigger swings of the economic boom/bust pendulum.

These findings mean that marketing leaders need to shift their focus from defending existing price points to systematically building perceived value in new and different ways, in a market where established customer loyalty dynamics are shifting.

Let's explore some ways to do this.

Portfolio and Product Strategy Shifts That Market Dynamics Demand

Transitioning from price-led to value-led approaches is critical due to the macroeconomic pressures fundamentally restructuring purchasing decisions. For instance, value now supersedes taste as the main consideration for snack and beverage purchases, with 71% of shoppers prioritizing value compared to 54% who prioritize flavor, according to the research.

There is also an observed decline in exclusive brand preference, with only 10% of consumers now purchasing only brand-name items (a 11-point decrease in six months). At the same time, 66% of consumers purchase a combination of brand and private-label products.

This article was written by Greg Kihlström for CMSWire. Read the full article here.