Relaunch the brand so that it can compete against its competitive brand with an aggressive price strategy.
Why Relaunch?
While entrepreneurs are working on the launch of their new business, a startup, a new product, and passion for entrepreneurship, why are we talking about the effective relaunch of a brand? Let’s see.
I do not want to talk about this deadly virus called CORONA, as you would have heard a lot about this almost day in and day out for the past few months now. It took the world by shock, and the world had gone into quarantine. Most countries announced a set of economic measures to recover their economy during this challenging period.
For businesses, sustaining their operation without any cash inflow is becoming more crucial. For some, maintaining its brand value is under threat now, and few are already out of business. All companies are thinking about how to rebuild or reshape their organization during and after the COVID-19 crisis.
Businesses need to take necessary survival strategies to keep their business moving. Most business leaders are recommending different strategies like diversification, increasing value addition, and cutting costs.
Business coaches offer free add-on products to support fellow entrepreneurs to maintain their cash flow and brand value.
Some would launch their value brand or fighter brand to regain their business. When it comes to fighter brands the focus is not only on retaining customer loyalty; it is all about reinventing their brand strategy to gain new customers.
Most of the brands offer a high discount, higher points to their loyalty program and extending their redemption date, and so on. Customers are already getting super-conscious of value, and local businesses are sprouting as new competitors during this crisis. The Bigger brands need to take quick and great business strategies to bring back and regain their business volume.
Many leading brands and businesses are facing a very high threat. Travel, Hospitality, and Entertainment industries are most affected because of the ongoing coronavirus pandemic Global Lockdown. The economic shutdown, jobless, and the uncertainty of their income are affecting customers’ buying behavior.
Mid and premium brands might lose their market share to their low-price and local rivals. Aggressive brands will go, to whatever extent, and implement all its strategy to bring back and retain their customer loyalty by offering high discounts and some at cost price, even though this strategy will kill their brand value in the long run.
It is not good to wait and hold until the economy bounce-back to normal. Businesses might lose their customer, and they may not come back at all. So, re-launching their brand to give a value proposition to their customers might look like a good strategic decision.
Brand re-launch Strategy is the best way to regain its customers during this crisis period and gain over their new local competitors. In most cases, this strategy can deliver a most powerful result by eliminating its competitors and opens-up new value markets. However, relaunching a brand is not easy for any business as most of their brands are trapped in and fail to overcome their brand success.
The company should adopt these six relaunch strategy directions and execute them carefully to smell the success.
Reduction Of Price And/Or Low Market Share
The company should consider this strategy to gain customers from the low-priced competitor to limit its customers to shift to the low-priced rival brand. Customers will trust and follow the value brand when it is well backed by a premium brand without a second thought, as they are unaware of the quality difference between both brands. In most cases, the percentage of losing its customer to a competitor is much lower than to their value brand.
The major challenge is that the value brand needs to satisfy its customer with a similar quality to the premium brand and not with their direct low-priced competitor in the market. It is difficult for any brand to provide a low-cost product with similar quality and yet fulfill a good profit margin.
Relaunching is very crucial, and it needs to gain a great customer base.
To avoid or limit your customer to move towards a competitor, you should consider reducing some features by keeping its basic features with the limited supporting system.
With the pre-launch market survey, the company can tentatively arrive at a calculated risk percentage that affects the market share. The higher ad spent can bring in more percentage of market share to achieve higher sale volume. However, with limited ad costs, the brand can hold back its sales surge for a short time. Positioning a brand is quite challenging, as it should appeal to the value customers and need to deliver the quality of its premium brand.
Brand Clarity And StrategyLet us ask ourselves a few questions.
- Why brand relaunch?
- How is it positioned?
- When will be the launch?
- What value will it carry?
- How does it gain its market share?
All brand needs to have these questions answered in the first place, before relaunching their brand. In this current pandemic situation, a business rebuilding strategy is key, and a change in economic conditions forces the brand to follow a value price strategy within its category.
Test strategy can help brands to position the product without risking their current brand position or sales directly.
Relaunch the brand so that it can compete against its competitive brand with an aggressive price strategy. When you offer the same value to your customer without deviating from what they want, that is the winning formula.
We need to ensure that there is plenty of difference between your existing brand and brand relaunch strategy. It is most important to understand the customer’s perspective before you relaunch your brand. It is not only about price, but the customer also needs to find more value in your brand than your targeted competitor brand.
Know The Power Of Competitor
Most organizations overprotect their brand to avoid the fall of their market share to their brand relaunch strategy and forget to understand the power of competitors.
The reason for the relaunch is to protect profit margin and to increase market share. You cannot relaunch the brand with the reduction or elimination of the main features of your product while your competitor offers the same features at a lesser price point.
You can launch a product with a low margin to capture your competitor’s market share and keep adding your profit margin in some of your premium product ranges. You kill your competitor with value and quality. You are not only going to spoil the market share of your brand but also the brand value.
If your product is well-positioned in the growing market, then you need to harvest your profit in a quick turn-around time as many competitors will foray into it.
You can launch a product with a low price and nearly equal quality to your premium product. Same time, if you can replace your premium product with improved quality and add many new features, then you are the winner in market share. It will take a longer time for your competitor to match your premium product. To be a winner, your brand should have a quality product with a low price and a premium product should have improved quality.
Maintain Low Profit And Avoid Losses
Taking a brand relaunch route might be a short-term success to hold your customer back. It’s a low-profit model and the need to counter highly dominated low-priced rivals is a difficult task. You may not have the advantage of a high margin as you have it in your premium product.
Your focus should be on the low-margin, high-turnover business model. Your budget for ad spend would be limited, and you need to understand the winning strategy to take away your competition. If you fail, the loss will be huge and directly affect your company’s profitability, and may take you out of business in no time.
Brand relaunching success results in a sustainable profit margin more than the price match war. There is no point in relaunching a brand with no profit, even if your customer accepts it, sells well, and the competition brand failed.
Success is achievable through three objectives.
- The brand should be profitable, despite its low price point
- The product needs to fulfill all the needs of the customer
- Brand should have year-on-year market growth
If you can meet the above objectives, then you consider the Brand Relaunch.
Not A Customer Focus Brand?
On the first hand, the purpose of relaunching your brand is to kill its low-price competitor. When you launch a product or service, the main focus should be on its targeted customer, and in this case, it is very different. Most often, the brand relaunch originates with a competitor and not from the customer. Its primary focus is to protect your brand by matching its low-priced rival brand.
Accepting the fact, the brand relaunch strategy should focus on the consumer segment that the brand is targeting. Perform market tests to understand the customer perspective of that segment and fulfill their requirement in addition to matching its competitive price point.
The brand position should fulfill the need of the customer rather than matching it with the competitor, you will taste unprecedented success.
The Planned And Precise Usage Of Management Resources.
For an organization having a premium product in its portfolio and yet relaunching it as a value brand is something like playing two different musical instruments at the same time. The company should need to know the strengths and weaknesses of its resources and distribute them based on their skills and leadership quality.
In this given situation, the success rate of brand relaunch should be a hundred percent. We should have a balanced mix of leadership management resources to deliver a hundred percent success for both the premium and the value brands.
The companies should take some decisions and take action during the crisis with recovery in mind. When the situation returns to normal, the company should have a clear strategy in place and have the resilience and agility to reshape its business strategy to thrive in the future.
As a leader, we should think of all the possibilities of restructuring, reshaping, and rebuilding the business, and have a recovery plan.
©Rajalingam Rathinam