By Leon Gettler, Talking Business >>

IN AUSTRALIA, consumers are used to companies discounting products when there’s a downturn in the market. But a discount in tough times can damage a brand, according to Jason Eisner, co-founder of BrandQuest, a strategy, culture and brand management company.

He said businesses needed to work out where exactly they fit in the market. If they are a company modelled on providing discounts, they might be able to do it. But if not, they should not go down the discount route. 

“I think people during an economic downturn get scared and especially in Australia, one of the first things we do is we go straight to discounting. It’s kind of a last resort thing to do and one of the things it does is it basically destroys your brand,” Mr Eisner told Talking Business.

“It’s a very quick fix to an ongoing problem. It’s probably the last resort to turn to and people use it as their first resort.”

He said “price tells us everything, what the business is about”.

PRICE INDICATES SUPPLY AND DEMAND

Mr Eisner said price told about supply and demand. Demand had everything to do with what the product was worth and how much people liked it.

He said changing the price would always have an impact and he said it was done way too often and done with a short term viewpoint without much analysis.

He said there were times when it was worth discounting and there were other times when BrandQuest would recommend against it.

“If you’re a low cost brand and your brand is always a discounted brand, and the reason why people come to you is because it’s a discount, then there’s probably a reason to discount it at every point in time,” Mr Eisner said.

This could also be done when there was an oversupply of the product, or the company was entering a new market.

“If you have a brand and you put lots of money into it and you have built it over time, discounting is eroding that,” Mr Eisner said. “It basically says the value of my brand is actually not as much as I priced it at, I’m going to discount it and I’m saying you shouldn’t need to pay full price for my brand.

“And the best brands in the world don’t.”

TOP BRANDS HOLD THEIR PRICES

Examples of that include brands like Apple and Mercedes, BMW and Audi.

Their products are worth more than what their competitors are selling, so they use price the opposite way to build into their brand, letting the consumer know it is a quality product.

“In general, the big luxury brands tend not to discount because they realise if you put lots and lots of money into building your brand, all you’re doing is destroying that brand value if you discount too much,” he said.

“If I am in the top prestige premium market, you are pretty hard pressed to discount. If I was in the budget commodity market with low price, low quality, that’s where you are in this discount thing.”

Any company setting a price has to do this in conjunction with a marketing strategy.

“A strategy is about thinking of the long term and price is a very short term mechanism that you can change over time. Everybody gets scared and they use a sort term lever like price and the reality is, it affects their long term strategy,” Mr Eisner said. 

www.brandquest.com.au

www.leongettler.com

Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness.

https://play.acast.com/s/talkingbusiness/talking-business-43-interview-with-jason-eisner-co-founder-

ends

By Leon Gettler, Talking Business >>

COVID-19 and the lockdowns have changed consumer behaviour. According to IRI, a world leading big data analytics business that works with many of the world's household brands, it has seen consumers focusing on wealth and wellness.

Sales of plant based products like soy milk and almond milk have gone through the roof. Consumers are also now focused on what’s good for the planet.

Alistair Leathwood, chief commercial officer for IRI across the Asia-Pacific region, said the changes brought on by the lockdowns and COVID were massive “and we can expect retailers and brands will respond”.

“It’s unprecedented, I think, in our lifetimes. A situation like that has shaped pretty much every aspect our lives and what we eat and drink,” Mr Leathwood told Talking Business. 

“I think you’ll see the health aisle in the supermarket get bigger and bigger. Now there’s two or three aisles devoted to healthy, to organic, to better for you, to sports nutrition. And even outside that aisle, you’ve got more and more products, even in the mainstream consumer packaged goods.

“If you look at the supermarket, you’ll see call outs on every box: 5 percent less sugar, 5 percent more protein, better for the environment, all of that good stuff.

“The companies that manage to hook into the trend will continue to do very well.”

TURNING TO VITAMINS AND MINERALS

Mr Leathwood said there was a big rise in people buying vitamins, minerals and supplements. And much of this, he said, was driven by people being concerned for their health during the pandemic.

“People were buying those sorts of things and frankly using them a lot more I think I the hope you boost your immune system, maybe you get to avoid getting ill,” Mr Leathwood said.

And instead of getting these goods from pharmacies, people were picking up these items in supermarkets. Which makes sense.

“I think it’s because when we were all nervous and concerned, we wanted to go to one place, get in and out, and stay home, so people bought things they might otherwise buy in the pharmacies,” Mr Leathwood said.

Consumer demand for sports drinks went down, with lockdowns stopping people getting out and doing sport, but demand for high protein drinks with vitamins went up.

IN WITH SOY AND ALMOND MILKS

The big lift in consumer demand was for plant-based alternatives like soy milk and almond milk.

Mr Leathwood said demand for these goods was growing way faster than anything else with 50-60 percent year-on-year growth rates.

He said the difference between this lockdown and the one last year was that people were now saying they not only have to look after themselves – they also need to look after the planet. This, he said, might be the driver for products for oat milk, which is being produced with less of a carbon footprint.

Mr Leathwood said companies needed to watch these trends and get on top of them which, he said, was a challenge for the big blue chip brands.

“If you’re one of the big carbonated soft drink companies and mostly what you do is sell fizzy sugary drinks, and all of a sudden nobody wants sugar, what’s your business model? So there’s a bunch of diversification, into waters, into Kombuchas, into functional drinks. And then there’s an attempt to reduce the bad ingredients, reduce the sugar, reduce the fat and make it more acceptable,” he said.

“You’ve got a real problem there, though, because one of the reasons you drank your Coke or you went to McDonald’s was because you like the sugar and the fat and the meaty taste.

“McDonald’s is really struggling to sell salads and healthy alternatives. You don’t go to Maccas for a salad. It’s hard for them to make that switch.”

www.iriworldwide.com

www.leongettler.com

Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness.

https://play.acast.com/s/talkingbusiness/talking-business35-interview-with-alistair-leathwood-chief-c

ends

By Leon Gettler >>

SOCIAL MEDIA abuse is a growing problem. The latest stats show that one in five girls and young women have abandoned or cut down on using a social media platform after being targeted.

And a study by Norton has revealed more Australian men than women report experiencing online abuse or harassment.

Over 60 percent have been harassed on social media and over 90 percent feel not safe using social media. Plus 50-60 percent are willing to pay not to have offensive material or be confronted with ads. Social media, while introducing platforms that bring people together, can also be used for abuse.

This why Australian tech expert Mick Esber has developed a new and innovative app, ‘bhapi’ (pronounced ‘be happy’) which rates, classifies, and blocks negative, fake, biased, hate, violent and explicit content on social media using best-in-class technology. 

It has been designed to deliver easy-to-use tools for people to manage what they send and receive, is completely ad-free, and does not sell personal data to third parties.

SOLVING ANTI-SOCIAL MEDIA PROBLEM

Mr Esber said he decided to develop the app after talking to his sisters, one a teacher and another who works with special needs people, last year when COVID was happening and discovered they were dealing with toxic social media comments and trolling. He developed it after looking around and finding there wasn’t a social media platform around that wasn’t toxic.

He built bhapi using artificial intelligence tools – essentially using Google’s Jigsaw program, which was created to help clean up the internet sector that helped moderate and curate conversations.

Mr Esber said bhapi was created as a G-rated broadcaster.

“We’ll follow those rules which are pretty consistent globally about G-rated content,” Mr Esber told Talking Business.

“We’ll use AI primarily to control it and then we’ll have humans behind it, which is a very important part, to manage the process so the machines aren’t on their own. There will be a process to moderate and adjust it.” 

The company has just launched a KickStarter campaign and is looking to raise $50,000. The campaign started on July 1 and will go until the end of the month with a view to bhapi launching in September.

Bhapi is an IOS and Android app which can operate on all phones and this will be released in September.

HOW BHAPI MODERATES MESSAGING

Bhapi moderates by monitoring abusive comments. Anything that is not G-rated is not deleted but sent into a private or draft area. The content is not censored. It can be passed on privately but it cannot be made public.

“How we do that is we use a range of AI tools, primarily from Google, and stuff based on Google,” Mr Esber said. “If you say something offensive, it will detect that, it will put it into drafts. We are going to police that environment to make sure it is a G-rated space.”

The material deemed to be not G-rated in the drafts area can be sent as an Instant message to the person concerned, but it cannot be made public.

“If it’s a personal conversation, we’re not going to censor that,” he said.

He uses the example of being at the football. When people use bad language, they are usually pulled up by others. The internet does not offer that and bhapi is designed to address that.

Mr Esber said bhapi was not designed to stop freedom of speech.

“Freedom of speech is really important but there’s a difference between freedom of speech and freedom of reach,” he said.

“If you have got something offensive to say, should I give you a megaphone to tell the whole world? If it’s a lie, if it’s offensive, if it’s sexist, if it’s anti-semitic, should these things be allowed for you to publically say?” 

www.bhapi.io

www.leongettler.com

Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness

By Leon Gettler >>

TRANSPARENCY has become more relevant than ever before in the advertising and media industries, according to Dale Garvie, managing director of FirmDecisions.

FirmDecisions is regarded as the largest independent global marketing contract compliance specialist, providing advertisers with transparency into their marketing and media agencies.

Mr Garvie said the issue of transparency in contracts needed to be sorted out.

“When we talk about transparency in contracts, what we’re really referring to is full visibility of the supply chain relevant to advertising,” Mr Garvie told Talking Business. “So if you[re an advertiser and you have media partners, transparency expectations of those media partners are that you know where your purchasing is coming from, both in terms of cost disclosure and whether it’s valid media and not fake traffic.

“Transparency is a buzzword in the industry that’s widely used but it can mean many things to so many different people.”

It means a lot to so many different suppliers in the industry – sale promotion people, event management specialists, design experts, public relations practitioners, media agencies, ad tech and the media itself

ADVERTISING GETS ‘DIFFICULT’

Mr Garvie said media counts for the biggest proportion of ad spend by advertisers, taking up a large part of the $1 trillion ad spend budgets.

The problem is, it has become much more complicated. 

“Historically, advertising was relatively simple. Everyone was watching TV, reading newspapers, pretty straight forward,” Mr Garvie said.

“Fast-forward to today’s world with mobile and digital and there are a lot more media providers with advertising playing through the supply chain,” he said.

“With social influencers, for example, that form of marketing didn’t exist years but it’s on the rise now. As the industry changes, there are more players beyond media, and transparency of all those players, how they manage advertiser budgets is critically important.”

He said his business FirmDecisions specialises in auditing advertising agency contracts.

“It’ll tell you there are a lot of improvements to be made within those contracts. Periodically we find unspent funds that the advertiser has placed with these agencies and there’s a lack of reconciliation so these agencies may charge on estimate and the actual cost for that activity may come in a lot less and the balance may be retained on the agency side,” he said.

TRANSPARENCY IS KEY

Mr Garvie said transparency was important for both sides, for the agencies and the advertisers and the clients they represent.

It becomes even more critical now with all the different marketing touchpoints and the growing power of third party influencer being brought in by agencies.

He said advertisers are now demanding transparency in this market and there is now some sort of standard that advertisers are adopting.

“At the end of the day, the market place has to react,” Mr Garvie said. “If they want to compete for advertiser dollars and transparency is a key focus in building trust and confidence in where those dollars are spent, naturally agencies will comply and sign up to those terms.”

However, both sides need to vigilant because services and the market place are evolving.

He said  his firm now advises clients to review their contracts every year. It is no longer sufficient to review contracts as these are audited and tested annually.

www.firmdecisions.com

www.leongettler.com

Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness.