In the competitive world of business, start-up founders face the ongoing challenge of justifying their marketing expenditure to internal stakeholders and potential investors. This task is particularly formidable for emerging brands striving to make a mark against established industry giants.
Legacy players benefit since brands are more recognisable and command customer loyalty with often premium pricing. This places challenger start-ups at a disadvantage.
The foundation of a successful brand lies in its messaging—the narrative that strikes a chord with consumers and sets it apart from competitors. For challenger start-ups, crafting a compelling brand message can be a game-changing strategy.
Rather than squandering resources on extravagant marketing campaigns, these start-ups can channel their efforts into showcasing authenticity, values, and a unique brand story. And it does not mean breaking the bank.
The Influence Of Strong Brand Messaging
Consider an Indian start-up that produces artisanal snacks or coffee using natural ingredients from local farmers and artisans. By emphasising its commitment to preserving traditional recipes and supporting local farmers, the brand establishes a narrative that resonates with consumers seeking authentic and ethically sourced products.
This brand message fosters an emotional connection and justifies a higher price point compared to mass-produced alternatives.
The allure of price promotions can be hard to resist. However, this strategy can inadvertently devalue a brand and erode profit margins. Instead of resorting to impulsive discounts, start-ups should explore alternative avenues that preserve brand integrity while sparking customer engagement.
Pay, Buy, Repeat
Ideas such as offering a subscription-based service for its product range can increase loyalty for a fraction of the cost. Instead of slashing prices, the start-up could provide subscribers access to exclusive new 'drops' before they hit the market. These are limited-edition products.
We see many such examples in now booming Indian streetwear and in the sneaker industry. This approach not only enhances the customer experience but also justifies the subscription fee, keeping the focus on the brand's distinctive offerings.
Finding a harmonious balance between pricing and marketing requires a strategic approach. Start-up founders must recognise that lowering prices does not necessarily translate to increased sales or customer loyalty. Instead, the focus should be on targeted marketing efforts highlighting the brand's value proposition.
For instance, a fitness tech start-up or personal health brand offering a subscription-based service could provide more value by offering personalised training and diet plans, giving exclusive access to fitness experts, and creating wellness communities instead of merely slashing subscription fees. This enhances the overall customer experience and justifies the pricing structure while keeping the focus on the brand's unique offerings.
For brands from the beverage industry, organising virtual workshops on the benefits of mindful drinking and the importance of natural ingredients works wonders. Positioning itself as an advocate for wellness without compromising on the fun element not only reinforces its brand identity but also nurtures a loyal customer base that values its commitment. This approach shifts the conversation from price to value, benefiting the brand's positioning.
Eye On The Price
Capturing the right customer profile involves weaving pricing and marketing strategies together to appeal to the intended audience. Instead of fixating solely on price, the focus on understanding customer pain points and aligning their brand messaging to address those needs works better.
Another example would be allowing customers to create personalised drink blends based on their preferences. This activity can be woven at bar shows, cocktail weeks or even takeovers. To save costs, it can also be done online.
By offering a customisable experience, the start-up communicates a tailored solution that resonates with consumers seeking unique beverage choices. This approach enables the brand to establish itself as a partner in the customer's beverage journey, showing extreme customisation on demand, which larger brands cannot achieve easily.
In conclusion, challenger start-ups can thrive in the presence of established industry players by leveraging the strength of compelling brand messaging. This is a classic David vs. Goliath scenario that challenger brands can use to their advantage.
Larger brands are not as agile and responsive to change, which challenger start-ups can use to their advantage and offer their target audience what they want by authentically communicating their values, stories, and distinct offerings; start-ups can carve out a niche without straining their marketing budgets. But this is easier said than done for a market such as India, which is highly price-sensitive.
It is imperative to resist the temptation of price promotions and instead invest in innovative services, educational initiatives, and personalised experiences that highlight the brand's expertise.
By seamlessly blending pricing and marketing strategies, start-ups can develop a customer profile rooted in loyalty and enduring relationships. The key takeaway is this: the focus should not solely be on selling a product but on selling a brand that resonates with the desires and needs of consumers.
- Siddharth Saraf, co-founder, Vaum