Are Consumers Really Loyal To Food Brands?
Simple answer to this question is NO. In fact brand loyalty is, I believe, overrated. What is important is brand awareness, brand freshness and product availability.
One of the big experts in marketing, Byron Sharp, explains in his book “How Brands Grow” that “Customer loyalty is largely a myth (customers are at best ‘promiscuous loyals’ – flitting fickle-like between alternative rival brands based on availability – 72% of Coke drinkers also buy Pepsi (UK)). Likewise for brand commitment – people buy brands out of habit, not commitment.”
This in no way means that brand marketing is futile. On the contrary, the marketers have to work overtime to make sure that the consumers are aware of their brands and that the brands stay relevant, fresh. This definitely helps the purchase decision.
Then again purchase can happen only if the product is available. This is so much more true in case of food as the consumption cycle of food is a few minutes only and the consumer is looking for variety all the time.
After all, there is a reason why the 3 big reasons for the success of a restaurant have always been LOCATION, LOCATION, LOCATION. Product matters, service matters, brand connect definitely matters but all that is futile if your product or service is not accessible.
Traditionally all FMCG brands, including food, have done well on the muscle power of their distribution. Giants like Unilever, Nestle, ITC etc have thrived due to their ability to make their products available in every nook and corner of the market. Some of the regional brands have been greatly successful due to their strong penetration and pricing strategy.
However, the advent of internet and ecommerce have allowed smaller brands to make themselves available through various channels at a far lower cost. This is creating some sort of a level playing field where niche products can now be made available without going through large scale offline distribution. So this is an opportunity for niche market players.
Hoi Foods, an NCR based start up has shown this through its D2C channel Hoipure.com. Less than a year old platform has very quickly built a customer base of almost 30000 customers who can now get ready to eat / cook frozen foods delivered within hours of ordering through this website. In a short span of time the company has launched dozens of products that focus on mind blowing taste. The company uses all digital channels, influencers, experts to create brand awareness and brand recall. It uses various techniques in the book to generate trials and make itself stay on the top of the consumer’s mind. However, they are also focussed on creating a network of dark stores that allow quick delivery.
There is an old saying in the Indian retail industry, “Jo dikhta hai woh bikta hai” . This is the ultimate truth and will always remain so. Keeping this as the golden rule, the food brands while working on brand awareness, brand relevance must make sure that their products are available else all effort is lost. Consumers will never be loyal enough to buy your products if they are not convenient to buy.
The author is Pawan Raj Kumar, Co-founder, Hoipure
