—The current economic landscape in Nigeria presents a daunting challenge for brand managers as the task of defending marketing budgets while ensuring maximum return on investment becomes increasingly complex. This chaos is a result of the sporadic increase in the prices of basic commodities, compelling brand managers to adopt strategic approaches to sustain their businesses and guide consumers amid conditions of low purchasing power and a surge in discretionary spending.
According to a report by Kantar, about 74% of Nigerians do not expect their revenue to match inflation. The undeniable truth is that while inflation is on the rise, revenue growth is not keeping pace, forcing individuals and businesses to make strategic priorities.
“People will surely prioritize. They will find what is important to them and direct their limited resources there. Now, people are prioritizing food because it’s about survival and discretionary consumption. So, food is growing in terms of volume in their homes, but every other aspect seems to be taking a downward spiral,” explains Akin Afere.
As inflationary pressures persistently affect Nigerians and the cost of living and running businesses skyrockets, brand managers must navigate these turbulent waters with precision. The rising prices of food and basic amenities, coupled with the menace of soaring fuel prices, demand a strategic shift to ensure that marketing efforts align with the evolving needs and decisions of consumers.
“Revenue is not increasing, but inflation, the cost of living, fuel, and forex are all on the rise. This places enormous pressure on the average Nigerian. However, it’s crucial to note that, as they prioritize and adapt, certain strategies will be deployed,” Afere continued.
To cope, Nigerians are adopting various strategies to deal with economic pressures, including squeezing, swapping, opting for smaller SKUs, exploring alternative products with similar value at a lower price point, or even abandoning certain product categories entirely.
“Generally, service providers will see people rationalizing the amounts they spend on specific things. This is particularly significant, especially for FMCGs. Others may determine that a particular category is not as essential and choose to abandon it entirely. These are some of the adaptive measures Nigerians are taking to navigate the current situation and the circumstances they find themselves in,” he continued.
Hence, these sporadically changing consumer behaviors underline the urgency for brand managers to refine their marketing strategies and align them with the evolving landscape influenced by inflation.
Akin Afere emphasizes four critical factors for brand managers to focus on during this crisis:
Continue Investing in Your Brand:
Brand managers must recognize that halting investments create a gap and an opportunity for competitors. Despite economic challenges, there is always movement within brand portfolios. Prioritizing key bets, streamlining focus, and exploring new spaces are essential strategies to maintain market presence.
Price Appropriately:
Pricing is a crucial aspect, especially during economic turbulence. Brands need to be sensitive to the precious nature of consumers’ limited resources. Appropriate pricing ensures that the brand remains competitive while offering value for money.
Prioritize and Streamline Focus:
Brand managers are urged to prioritize and make strategic bets on areas of their brand portfolio that demonstrate movement. This involves a keen understanding of consumer behavior shifts and aligning marketing efforts accordingly. By streamlining focus, brand managers can allocate resources effectively and maximize impact in key areas.
Explore New Spaces for Expansion:
Afere also cited the example of the rapidly growing fintech industry within the financial sector. By identifying and capitalizing on emerging trends and consumer needs, brand managers can position their brands in lucrative markets, ensuring resilience and growth even in challenging economic climates.
photo: iStockphoto
