Ato Micah, the Managing Principal of Maverick Research, a leading West African insight and advisory firm, has urged Ghanaian retailers and manufacturers to offer price reliefs to their consumers to regain brand loyalty.
“Ghanaians are loyal to their pockets and how much disposable income they have versus any brand or any piece of item being sold. And so, the more responsive businesses are to them, the more goodwill they will gain with the Ghanaian consumer”.
Micah made these remarks during a webinar with the UK-Ghana Chamber of Commerce on “What Shoppers Expect: Price & Behaviour Insights Amidst a Stronger Cedi”, based on their survey of consumers aged 18-55 in Accra, Kumasi, and Tamale in June this year.
The price-driven consumer
The research found that recent price increases caused by the cedi’s instability made consumers extremely price-sensitive. This led many to abandon their favourite brands for affordable alternatives – a major blow to brand loyalty and bottom lines.
However, majority of these consumers expressed a willingness to return to their preferred brands provided prices come down, propelled by the cedi’s gains in the second quarter of the year. For instance, 50% of surveyed consumers said they would return to their brands if the price reduction was significant, while 38% said they would immediately return.
For Micah, this presents an opportunity for affected brands to re-engage and win back lapsed customers.
“There is data that backs the fact that providing relief or passing on some of the cost savings would get lapsed consumers back. If consumers’ favourite brands offer pricing relief, it offers them the opportunity to relook at those brands.
And it gives you the perception that if you’re an established brand looking to win back customers, reducing prices helps you align your brand with consumers, either lapsed, current, or potential”.
A call for “price reliefs,” not “reductions”
To help brands win back lapsed consumers, Micah suggests a simple but crucial change in language: instead of offering “price reductions,” which can imply a loss for the business, he urges them to offer “price reliefs.”
This shift in framing, he argues, presents the move as a mutual effort to help consumers and builds goodwill.
“When you say price reduction, the sentiment around it is that the manufacturer or the business owner is “losing”. Pricing relief, on the other hand, makes it a mutual process to help businesses think through it from an investment perspective.
See it as building goodwill, building equity, letting your customers/consumers know that you understand their plight. If manufacturers see it in this context of humanising their consumers and their customers, it makes the decision much easier to make.”
Micah also urged manufacturers to consider offering non-cost reliefs and identifying the acceptable profit to them/the kind of relief they are willing to pass on to their consumers/customers to determine cost-related price reliefs.
What the Ghanaian consumer expects
According to the findings, 90% of Ghanaian consumers expect price reduction of foreign goods to decline in line with a stronger cedi, compared to just 78% who expect similar reductions for locally produced goods.
Consumers expected broad-based price relief across various sectors, including electronics & appliances (77%), fuel/petroleum products, FMCGs (73%), and vehicle & auto parts (62%).
43% of consumers expected the reductions to match the cedi’s appreciation, 40% expected the reduction to reflect reduced import costs, 11% thought it was too early to tell, while 7% expected a reversal of past inflation spikes.
Navigating and communicating price reductions
Micah emphasised the importance of effective communication. With 38% of respondents getting news about the cedi’s appreciation from online channels, he urged businesses to use social media to announce price changes and drive awareness in addition to encouraging retailers to sell at suggested retail prices.
Some things to consider
The webinar, enlivened by an engaged audience, discussed a wide range of related topics and provided relevant responses to questions on competition as a driver of price reduction, and pricing across distinct markets and regions.
Moderating the webinar, Albert Eliason (PhD), a seasoned management professional, encouraged the audience to “take forward these insights, whether it’s refining your pricing strategies, strengthening consumer communications, or proactively monitoring consumer sentiment because these are quite critical to the survival of the brand.”
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