Revisiting Brand Management Policies
The recent health crisis has increased online sales and expanded the kinds of products shipped to consumers. As consumers, shippers, and retailers get more comfortable with online commerce, the trend away from brick-and-mortar sales will likely continue, even after the health crisis eases.
But the jump in online sales has also helped manufacturers better understand how to protect their brand’s reputation in this new distribution environment. As they adjust their brand management policies, they will expect all companies in their distribution chain to play a role.
Adjusting Brand Management
Successful manufacturers have long recognized the need to ensure the way their products are transported, displayed, priced, and sold is consistent with their desired brand image. They select the right number of retailers in the right locations and then pick the right logistics companies to deliver at the right time.
They also implement brand management policies to make sure customers see the product and its price in the right way. There are legal limits to the restrictions that manufacturers can place on their distribution chain’s handling and promotion of its products. For instance, restrictions on retail prices can be especially dangerous. Still, manufacturers enjoy plenty of freedom here.
Now, manufacturers are revisiting those policies to cover new concerns revealed during the crisis-induced increase in online sales. Here are four steps they will consider taking:
1. Prevent prices that are "too high." From toilet paper to hand sanitizer, some retailers jacked up prices of goods suddenly in high demand. Consumers might not understand that the retailer, not the manufacturer, did the "price gouging," and ding the manufacturer’s reputation. Manufacturers often worry about the retail price of their products. Antitrust law limits the retail price restrictions manufacturers can impose; however, maximum resale prices are much less dangerous, as they protect consumers as well as brands. Expect to see more caps on prices to help consumers get the expected buying experience, even in a crisis.
2. Change the use of brand elements. Will the manufacturer allow the use of its name, logo, and other elements on the retailer’s website, the shipper’s trucks, and signs in the physical store? Will it require the use of its brand elements on boxes that might now be the main way its products reach consumers? If so, how will that affect picking, packing, and shipping costs? As the delivery truck and the cardboard box become the new "shelf" on which the product is displayed, manufacturers will ensure they display the right brand image.
3. Stop different "bad" advertising. Good brand management policies have always given manufacturers the ability to stop their brands from being associated with late-night TV hucksters and inflatable gorillas on store roofs. Now, they will need to cover retailer pop-up ads and incorrect product descriptions on retailer websites.
4. Ensure the right retailer is selling from the right location. Manufacturers require retailers to sell from a specific physical store with plenty of inventory—and prevent bulk sales to subretailers who resell the goods out of some big-city alley. Now, manufacturers will want to approve their retailers’ web outlets. Some may even ensure their products do not end up on an auction or third-party website.
The recent health crisis accelerated the trend of consumers buying more and different products online. Manufacturers concerned about their brand reputations will impose new, or adjust current, brand management policies to account for the new reality. Every company in the distribution chain should anticipate these changes.