Brands take years, often decades of work, investment, and insight to develop, but they can be destroyed in the blink of an eye.
In channels where there is an imbalance of power between links in the supply chain, such as FMCG retail, the retailers short term best interests are often maximised by attracting consumers to their stores with deep discounts (funded at least partly by the manufacturer) of well branded products. Often they are able to persuade the marketers that their best interests are also served by the promotional activity, and if they fail to persuade, their power to delete and manage shelf placement is usually sufficient to swing a deal.
The advent of scan data has lifted the veil on some of the decision making that occurs at point of sale, and it has become clear that long term sales of solid proprietary brands are not maximised by short term price promotional activity, it simply diverts resources from the long term to the short term, reducing average purchase price by the retailer, and enabling pantry stocking by the consumer, eating away over time at the brand equity so challenging to build.
What we need is more marketers, people who understand the psychology and dynamics of the relationship a consumer has with a brand, and we need those people to be sufficiently supported by their organisations to be able to tell retailers where to stick their short term price promotions, and continue to invest in the brand, in order to be able to continue to harvest it over the long term.
