All the strategies adopted by the company are aimed at positioning its product in the market, so that it is constantly ahead of other companies...
Article written by Laura Mura for The Young Economist.
Companies have always tried to take care of their products, the choice of raw materials, their processing within the production process, up to present a product of excellent quality to consumers.
It is an increasingly consolidated behaviour, through which it is possible to strengthen the relationship with consumers and establish in them confidence, prompting them to buy the company’s products more often. Companies want to influence the consumer through their own decisions, so in this way their products can be advantage respect those of competitors. In fact, a trusted consumer will tend more to make his purchases at a company of which he knows the origin of the product and the way in which it is worked.
All the strategies adopted by the company are aimed at positioning its product in the market, so that it is constantly ahead of other companies. Normally this process is known as Brand Positioning, a type of strategic marketing that operates on several fronts: research within the market of different categories of consumers, to which it can address a particular product; positioning of its offer, directing the behaviour of individuals, pursuing competitive advantages.
The phenomenon today is even more widespread if we think of the food sector. More and more often we can see how businesses boast about their products, whether they are of natural origin, whether they come from controlled organic farms or whether they are free of preservatives. All choices are based on a product that is as natural as possible, thus strengthening strategic choices.
In recent years the eating habits of individuals have become more complex. They are more sensible than years ago, and much more careful in buying some foods than others. Food processing processes and their respect for both health and the environment are of particular concern to people. Therefore, the final food must contain in itself the respect of several variables, ranging from the early stages of production activity to its end.
As a result of the pandemic, environmental awareness has greatly increased, and consumers now feel personally responsible for their decisions. This varies from country to country, with a percentage of 24% in Germany of Eco-active consumers (senior consumers with greater economic availability than young people) and in Italy of 23% (source Gfk). It has been estimated that the percentage of sustainable consumers in the coming years can reach 40% of the total, worldwide. It's important that you give practicality to your choices: Gfk noted that of 66% of people who want to buy more sustainable products, in fact only 20% take consistent actions. It is therefore important to reduce the gap between intention and action.
At the company level, we can say that the activities most attentive to sustainability are those born with an environmental purpose, namely the Brand Green, which constitute a 42%.
Then we find the multinationals, with a 36% attention to the environment and finally 22% belongs to local companies for which are estimated growth in future.
To explain more concretely the Brand Positioning we can take the example of the Barilla company: a famous company founded in 1877, which has made its brand a real case study. In recent years, the company has launched several initiatives to achieve a long-term sustainability goal, effectively strengthening its brand in the market. This process is known as segmentation, that is, a subdivision of the market according to the tastes of consumers, with the consequent decision on which area of the market to focus. Aware that his choices would inevitably affect consumers more sensible to sustainability issues (consumers that have certainly increased compared to years ago) Barilla has reformulated its products, starting from the reduction of fat, sugars, salt and changing the quality of the packaging, in full respect of the environment.
How can we define Barilla’s choices?
Barilla’s strategies are based on the search for a product that is accessible to all and that at the same time is sold at an appropriate price. Accessibility is crucial because it is the only way to reach consumers more easily, and this is possible through the targeted choice of positioning strategies.
What should we do at the end of the segmentation phase?
The next phase is more definitive because it consists in the targetization, which moment for which the enterprise tries to define the own strategies of positioning, not only through the classical channels of advertising broadcast like the television, but showing the choices made, for example, on own website, thus accessing a wider audience. It is here that Barilla has established its core value: ''our commitment begins with recipes, which are continuously improved to offer people products that are always better, safe, and with a balanced nutritional profile.''
Today, this proposal is very attractive to consumers and has allowed the company to be able to differentiate itself from other competitors, ensuring greater confidence because it can satisfy the current desires of people.
Undoubtedly the brand positioning is based on a product concept also from the functional and aesthetic point of view, so what is able to communicate externally to the customer. This aspect is able to satisfy the consumer more and more and so the positioning will be perceived more transparently by the individual.
To be optimal, the positioning must focus on several aspects: (Source: Tunisini/Rintamaki)
- price analysis and thus an economic focus;
- focus on the various possible solutions, with the aim of seeking a functional value;
- on the consumer experience to focus on the emotional aspects, attracting more moods based on the product. In the case of Barilla, this goal has been achieved thanks to the care of its products and their raw materials processing. The improvement of the nutritional values of pasta and the decisions that have increasingly adapted to the wishes of consumers have made Barilla one of the best companies in terms of customer satisfaction;
- give meaning to decisions, expressing a symbolic value.
Investments for an adequate brand positioning
Brand positioning is not simply substantiated in the choice of strategies to consolidate a product in the market; in fact, strategies are also sought in terms of investment and profit.
To support its decisions, Barilla announced €1 billion in investments over five years in its industrial structure. From the 2020 budget Barilla shows that the company between 2019 and 2020 has achieved an increase in turnover, from 3627 million to 3890 million euros, with a change of 7% that net of the exchange rate is 9% if we consider the areas of pasta and bakery. 2020 has been a difficult year for many companies, but its effects have been milder on the Barilla company being part of the food sector, a sector less affected by the urgency of staying at home. To confirm the expansion of the assets can be noted as the EBITDA (earnings before interest taxes depreciation) has increased from a 13% on turnover to 14%.
(Source: Barilla website).
The 60% of the investments are used to support the choices of company policy, that is to increase competitiveness, essential to monitor the actions of other competitors that carry out the same activity and that could subtract market shares. The other variable referred to in the investments is of course sustainability, which, both in our case and for many other companies, has become today a fundamental tool of food brand positioning.
In fact, it is a new way to gain economic advantages in terms of profit and at the same time a correct way to respect the environment. So, sustainability is added to the classic business strategies, creating the phenomenon of marketing mix, in which traditional and innovative marketing choices are mixed with each other.
Attractiveness and sustainability are constantly improved through the evolution of processes and technologies. The remaining 40% of investments are aimed at supporting innovation and geographical growth.
We can conclude, therefore, that to date are not enough strategies to increase exclusively the corporate assets. There is a greater need to resort also to non-monetary qualitative variables that can be traced back to the two areas:
1) People: the ability of the company to turn to an increasingly attentive public;
2) Environment: being able to respect not only people, but also their surroundings.
The synergy between the two variables plus profitability enables an effective brand positioning strategy. It is essential that the company is consistent in pursuing its objectives in order to impose greater trust on the consumer. Ensure that your choices will be sustainable not only today, but over time.