We recall the 90s - the reasons for the departure of goods and the disappearance of brands and learn to build a defensive strategy against negative market factors.
Let's say you have a well-defined strategy and, according to the forecast, it should bring significant growth, but next month there is a decline in sales. No amount of marketing tricks helps. The reason there may not be an erroneous strategy, but falling consumer interest in the product.
We talk about defensive marketing, the reasons for the decline in interest, and how to avoid this situation in the article below.
Concept of defensive marketing
Defensive marketing is a type of marketing strategy that aims to protect product positioning from negative factors and market share profitability. Factors can be both Intermarket, for example, in the form of a competitor that has appeared, or external: social, political, and even environmental.
Defensive marketing is needed:
- in highly competitive markets;
- in global and local economic crises;
- in rapidly changing markets.
Consider a few examples of collapsed markets and departed popular products.
Chewing gum from the 90s. People whose childhood fell in the 90s, most likely, fondly remember chewing gums Love is Turbo, and the like. Children collected candy wrappers, exchanged them among themselves, and proudly boasted to their friends. However, the product did not have very active advertising. The popularity of chewing gum was due largely to word of mouth. After the giants Wrigley (Orbit brand) and Cadbury (Dirol brand) entered the market, the popularity of sweet chewing gums fell significantly. Dirol Cadbury LLC bought the Boomer brand in general.
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| Defensive Marketing: Reducing Business Risks When Markets Crash |
Another reason for these brands to leave was that the gum had a high sugar content. And if you remember, in the 90s the fashion for healthy teeth reached Russia, so the number of advertisements about the "acid-base balance" has increased dramatically.
Pagers. Formally, the birth of the gadget in Russia took place in 1993 in St. Petersburg. In 2001, more than 80,000 people used paging communications in the northern capital. Two giant operators - "Ekskom" and "Neda-paging" thought about merging and expanding the network. However, in 2005, companies had to survive due to entry into the cell phone market. These changes were not sudden. There were prerequisites, but no one paid attention to them. In 2001, the Big Three was formed: VimpelCom (Beeline), North-West GSM (later became MegaFon), and MTS. They created a single space for the exchange of short messages (SMS).
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| Defensive Marketing: Reducing Business Risks When Markets Crash |
Yogurt "Skeleton". Think of this product from Danone, which featured funny skeletons in its design. In 2004, the product appeared in stores and became very popular. It was developed specifically for children aged 9 to 14, for whom "Rastishka" has already become frivolous. The slogan was associated with the advantage of the product, namely the high content of calcium and other minerals needed to strengthen bones.
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| Defensive Marketing: Reducing Business Risks When Markets Crash |
The product line was gradually replenished with glazed curds, curds, and other items. However, something soon happened, and the company began to receive complaints from parents. The main claim is that the heroes of advertising campaigns scare children. Gradually, the ROC joined this scandal and the matter went to court. As a result, the expert commission on the ethics of social advertising and socially significant information in the Northwestern Federal District recognized that the advertising materials of the product injure the psyche of children. In 2008, Danone had to close the Russian Skeleton lines.
Siemens phones. It was impossible to think that such beloved Siemens devices in the CIS countries would fail due to insufficient manufacturability and the presence of technical problems. While competitors were moving in the direction of smart technology and continuity, Siemens continued to produce relatively simple phones that did not support MP3 and had only 11 MB of memory. The last successful line included the M65, C65, and CX65 models.
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| Defensive Marketing: Reducing Business Risks When Markets Crash |
In 2005, BenQ bought the mobile division of Siemens, however, she could not solve the problems. After 3 years, the production of phones completely stopped.
The main reasons for the departure of products and the disappearance of brands
Most likely, after reading the stories above, the reasons for the departure of the goods became clear. But let's summarize them anyway.
market factors. The main thing here is the actions of competitors. Moreover, this is not only the release of a new product or the renewal of a competitor’s portfolio with a fresh brand but also other events, for example:
- involvement of an expert known in the market;
- innovative advertising messages and activities;
- conclusion of a profitable partnership;
- supporting something or someone in the media, etc.
non-market factors. This includes pandemics, natural disasters, the arrival of new global trends, political events, and statements. The pandemic not only caused a general decline in demand for a large number of goods but acted as a provocateur for the growth of certain types of services: remote communication, delivery, psychological assistance, etc. Conscious consumption, the trend toward environmental friendliness, and savings are intertwined interestingly. Due to the decrease in income, the number of purchases in discounters has increased.
internal reasons. These include the lack of monitoring of competitors or the absolute disregard for their actions, as well as the low level of attention of management to trends. Quite often, the company's management is so focused on its plans and goals that it ceases to notice what is happening around. There were cases when the regime of the total economy led to failure. In this regard, units that could be assigned protective or compensatory functions were closed. An example is the test department at Siemens, which was systematically reduced. This was done to reduce the cost of production, but ultimately became one of the reasons for the collapse of the entire product.
Basic Defensive Marketing Techniques
Monitoring audience demand. It will be useful to perform continuously and from two sides:
- what product the end consumer wants to see in your market segment;
- how he wants to see specifically your product.
The second direction makes it possible to see in time signs of dissatisfaction with any qualities of the product. This will allow them to be quickly eliminated without reducing demand. It is not uncommon for large brands to perform monitoring with the help of research agencies. Once every few years (or more often) they make large cuts to consumer preferences. For the second type of monitoring, there are a variety of reviews, product and service quality questionnaires, and other tools.
Accounting for global trends. Now it has become fashionable to take care of the environment, and this trend will only continue and grow. Therefore, any product that does not meet the requirements of environmental friendliness becomes risky.
Another trend is acceptance of yourself and your appearance. Many clothing and footwear brands advertise plus-size models and sell non-standard sizes.
Analysis of competitors. This is something that should be done continuously. Competitive analysis can be different: from simple usability analytics, which can be entrusted to a full-time UI / UX specialist, to competitor strategy analysis as part of some kind of intelligence. Data collection in the first case will take about 2 hours. In the second case, it may take more than one year.
Conducting competitor analysis allows you to identify:
- marketing tools of competitors;
- their pricing policy;
- their terms of service;
- the direction in which the competitor is going globally, and what are its immediate and distant goals;
- scientific and technological developments that he uses, etc.
Analysis and forecasts in related markets. Often, a change in the demand for one good causes a change in the demand for another. For example, smartwatches are usually closely related to smartphones. The decline in demand for smartphones can directly affect the sales of related devices. Here, of course, third-party factors also play a role, such as the general economic situation, fluctuations in income levels, and others. Nevertheless, the dependence can be traced.
Analysis of what is happening within the company. It is important to understand that any significant decision within the company can have an impact on the product. For example, creating or closing divisions and departments, launching a new partnership, updating a strategy, a public statement or action by a leader, activating or refusing to maintain social networks, and much more.
All the mentioned techniques are usually used according to a certain algorithm: obtaining information, analysis, forecasting the influence of a factor on a product, and actions to neutralize the negative impact.
As the most innocuous example: if the result of a competitive analysis showed that a competitor’s delivery is 2 times cheaper, you should reconsider your pricing policy. In this case, it is possible to offer to provide delivery to parcel lockers or organize pick-up points in chain stores, if they are not available. This will reduce shipping costs and provide greater convenience for the consumer.
If the analysis showed that demand is falling due to external factors that cannot be influenced, it makes sense to quickly start working on a new product or make changes to the current one so that it matches the new market realities.
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