Why Relaunch? When every influencers of the world, are talking about launching a new business, a startup, new product, and passion entrepreneurship, why are we talking about effective re-launch of a brand. Let’s see.
Hai! I am Rajalingam Rathinam, CEO of StartupFlame, a coaching platform of Aberame Group an ISO 9001 and ISO 27001 certified company having office in India, Hong Kong and Australia. You can visit aberame.com for the services we offer.
Covid-19 took the world by shock and the entire world had gone into quarantine. Most of the countries announced a set of economic reforms to stabilize 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. Some of the brands are already disappeared. All companies are thinking about how to rebuild or reshape their business during and after COVID-19 crisis. Businesses need to take necessary survival strategies to keep their business moving. Most of the business leaders and influencers are recommending different strategies like diversification, increasing value addition to their product, and cutting cost. Business coaches are offering free add-on product to support fellow entrepreneurs to maintain their cash flow and brand value. Some would launch its value brand or fighter brand to regain their business. When it comes to fighter brand the focus is not only retaining customer loyalty here but also reinventing their brand strategy to gain new customers. Most of the brands are offering wavers on price, high discounts, higher point to their loyalty program and extending its redemption date and so on. Customers are already getting into super-conscious of value, and local businesses are sprouting as new competitors during this crisis. 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, the uncertainty of their income is affecting customers buying behavior. Mid and premium brands might lose their market share to their low-price and local rivals. Aggressive brands will go, 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 its brand value, in the long run. However, it is not a good to wait and hold until the economy bounce-back to normal. They might lose their customer and 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.
Re-launching Brand Strategy is the best way to regain its customers during this crisis period and to gain over their new local competitors. In most cases, this strategy can deliver a more powerful result by eliminating its competitors and opens up new value markets. However, relaunching a brand is not so easy for any business as most of the brands are trapped in and fail to overcome their original brand success.
There are six major strategic decisions the company should take and need to execute it carefully to smell the winning success of its value brand.
The company should consider this strategy to gain customers from the low priced competitor and to limit its customers to change over to the low-priced rival brand. New and existing customers will move towards a value brand when it is well backed by its premium brand without a second thought as they are unaware of the quality difference between both the brands. In most of the cases, the percentage of losing its customer to competitor is much lower than to its value brand.
A major challenge is it need to satisfy its customer with a similar quality of the premium brand and not with their direct low-priced competitor in the market. This is critical for any brand to provide a low-cost product with similar quality and yet to fulfil a good profit margin to the business. Relaunching is very crucial and it needs to gain a great customer base.
To avoid or to 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 of the market share. The higher ad spent during the relaunch of the brand can bring in more percentage of market share to achieve higher sale volume. However, on the go with limited ad spent, the brand can hold back their sales surge for a short time. Positioning a brand is quite challenging, as it should appeal to the value customers and also need to deliver the quality of its premium brand.
All brand needs to have these questions answered on first place, before relaunching their brand. At this current pandemic situation business rebuilding strategy is the key, and a change in economic conditions, force the brand to follow value price strategy within its category.
Test strategy can help brands to position the product without risking their current brand position or sales directly.
Choose the right time to relaunch the brand to compete against its competitive brand with an aggressive price strategy. When you offer value to your customer without deviating from their expected result then it is a winning formula.
We need to ensure that there is a plenty of difference between your existing brand and brand relaunch strategy. It is important to understand the customer perspective before you relaunch your brand. It is not only about price, but the customer also needs to find value in your brand than your targeted competitor brand.
Most of the organisations overprotect their brand to avoid the fall of its market share to its brand relaunch strategy and forget to understand the power of competitors. The relaunch of the brand is to protect its profit margin and to increase its market share when compared with the competitor. You cannot relaunch the brand with the reduction or elimination of the key features of your product while your competitor offers the same feature at a lesser price point. You can launch a product with a low margin to capture your competitor market share and keep adding your profit margin in some of your premium product range. Unless 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 industry 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 lower price point, and nearly equal quality of your premium product. At the same time, if you 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.
Taking a brand relaunch route might be a short-term success to hold your customer back. Being it is a low-profit model and need to counter highly dominated low-priced rivals is a difficult task. You may not have the advantage of high margin as you have it in your premium product. And you should work on the low-margin, high-turnover business model. Your budget on ad spend would be limited and you need to understand the winning strategy to take away your competitions. If you fail, the loss will be huge and directly affect your company profitability and may take you out of business in no time.
Brand relaunching success is controlled by more than the price match war, you should achieve your targeted goal with a sustainable profit margin. 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 can be achieved through three basic objectives. First, your brand should be profitable, despite its low price point. Second, the product needs to fulfil all the need of the customer. Third, your brand should take more market share of your past year market share. If you can address all the above then you consider the Brand Relaunch.
On the first hand, the purpose of relaunching your brand is to kill its low price competitor. When you launch a product or brand 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 its consumer segment that the brand is targeting. Perform market test to understand the customer perspective of that segment and fulfil their requirement in addition to match its competitive price point. If your brand is designed to provide the demands of the customer rather than just matching its competitor you will taste the unprecedented success always.
An organisation 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 need to know the strengths and weakness of their resources and distribute them perfectly based on their skills and leadership quality.
At this given situation, the success rate of brand relaunch should be a hundred per cent. We should have a balanced mix of leadership management resources to deliver a hundred per cent success for both the premium and the value brands.
On this ongoing pandemic crisis, as a leader, we should think of all the possibilities of restructuring, reshaping and rebuilding the business and have a smart plan for recovery. However, the companies should take some decisions and take actions 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.
Thank you and I am Rajalingam Rathinam signing off now and let us catch up again with another interesting business strategy.