Brand Purpose- what it means……!
View(s):Whilst Sri Lanka is grappling with the economic issue where the government is buying dollars from the black market to clear goods from the port, brand marketing companies are fighting to retain its consumer base due to the spiraling costs.
Inflation at record level
Whilst the official inflation in February is reported at 17.5%, with food inflation crossing 25% plus, consumers in the bottom of the pyramid is grappling to survive. This has seen a swing in consumer purchasing where people are moving out of categories like lotions and colognes and now even basic brands that were part of the consumer baskets.
When the dollar moves from Rs. 205/- to Rs. 285/- within a week, an import depended nation for the manufacture of any product can see swings in the costs which companies will not be able to imagine. The best case in point was biscuit manufacturers have taken up 6 price increases within just a three month period when normally such price increases happen in a period of three years. This is the reality. But unfortunately, the policy makers are oblivion to this harsh reality and are keeping not only the business community, but the parliament and even the cabinet of ministers.
Rs. 1.2 billion printed in 2021
Data reveal that Sri Lanka has been printing money to keep interest rates down and expanding both reserve money and broad money since February 2020, after expanding the budget deficit by cutting taxes.
Sri Lanka printed 1.2 trillion rupees in 2021, a part of which was to repay debt buy reserves from the central bank as interest rates were too low to collect inflows from the current account. Sadly the policy makers are once again oblivion to the fact that this short term fix will create inflationary pressure that can push the consumer to a point of no return. Given the limited access to fuel has resulted in the consumer being choked due to Income generating efforts being impacted. Hence, a Sri Lankan housewife is on the verge of cracking up is an understatement. Sadly, the policy makers who made blunders to the economy in 2019 when the unprecedented tax cut that resulted in a revenue loss of around 800 billion rupees to the coffers, which in turn hit the credit ratings and hence we lost the opportunity to raise money from the global debt market has spiraled to today’s reality. Sadly the Central Bank Governor does not accept this fact whilst the whole world has opinioned same including top economists and Ex World Bank employees of Sri Lanka origin.
Brand Purpose
In this backdrop, we see companies practicing strategies that can hold on to a customer whilst the Sri Lankan government officials who have not even passed their A levels are trying to Re wrote economic theory. To be specific, the Central Bank Governor who is advocating a home grown model to the current situation when even a Junior Executive in a company knows that we need ‘ budgetary support’ and hence an IMF programme for Sri Lanka is Madatory.
So what is brand purpose? It is simply the reason for a brand to exist beyond making money. This strategy is very attractive to a consumer is the latest data that is coming out. Consumers are determining the fate of brands with their purchases. And when all things are equal, they will choose to a brand that has a deeper underlying purpose is what theory tells us and we see in reality. For instance a brand like Dettol say they are into ensuring good habits become a practice at home so that one can ensure that a family can be COVID FREE during this pandemic. This also means that the brand Dettol will be used to protect a family from the deadly virus by ensuring all surfaces are germ free.
In simple words, doing well has become the ultimate competitive advantage and a golden ticket to future proofing your business. We see that companies that have got it right has got strong trial generation and if the product has performed it has increased the market share.
Basics right
Whilst this proposition may sound attractive to get the mix right needs careful thinking. For instance, we must make sure that a company understand why someone is buying your company brand. The real nakedness of your brand must address the consumer need that the brand is designed to satisfy. For instance a SOORYA match stick is bought by a consumer to light the lamp that is lit first thing at every home each morning. May be a brand can have a deeper meaning like SOORYA promotes fostering good values at home among youngsters as their deeper purpose but the real acid test is that the it might light at the first stroke in the morning when swiped.
Takes time
Building a meaningful brand is hard work. It requires changing the way things have always been done. If it were easy, everyone would do it. But it’s not. You need courage, conviction, vision and a champion at the very top. The scale and depth of transformation demand a long-term approach. A rare commodity, considering that the average CEO spends less than three years in the job. To make matters worse, most companies are under constant pressure to deliver short-term results for shareholders; often at the expense of building long-term value. This is despite overwhelming data indicating that long-term companies deliver superior financial performance.
Next steps
Whilst the economy is crashing with a radar less head of state and Finance Minister at the helm of Sri Lanka, doing well has become the ultimate competitive advantage for brands in today’s market place. Without just moving forward in an ad-hoc manner, take time and plan your strategy for the brand. This wills your DNA of the brand in the long term. So act wisely.
(Dr Rohantha Athukorala heads a top 30 emerging Indian company in the area of artificial intelligence- brand mapping)
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