Putting your best foot forward in the retail environment can help your company boost its…
Modern retail has taken a turn towards the local brands. Of late, shop local movements have gained a lot of steam and for a good reason. The cost of production and consumption is found to be much lower when production uses local resources compared to the multinational retail chains which rely on foreign made and imported goods. Many countries have started encouraging locally produced and packaged commodities as it helps in improving the economy. This back-to-old-school approach has found many takers among the consumers who are now much more aware of what they purchase. We have found that an increasing number of middle class and upper middle class buyers have started preferring locally produced grocery and other commodity. This seems promising for the local producers who have a new found confidence in the market.
Why Local Works?
Developed economies that rely heavily on outsourced production and manufacturing may benefit in terms of labor cost but the local economy suffers because of low employment. American consumers are the highest per capita spenders on branded products, 75% of which are not produced in USA. Although it is profitable for manufacturers and retailers to sell foreign produced goods, it does nothing to solve the unemployment or rising debt. Many highly industrialized European countries have realized that although they are technologically superior, their local population is increasingly out of job. Their limited focus on agriculture has also made them dependent on other countries for food and raw materials.
Local brands are sometimes neglected by consumers based on a perception that they might not be of the same quality as that of foreign made products. In countries like India and others in the south east Asia, multinational brands have been very successful in using this perception in their advantage. However, with modern processing technology becoming easily available, a lot of local brands have emerged and are now giving strong competition to their international counterparts.
Local brands work because they have a better understanding of local needs. There are cultural aspects that a local brand can best judge and associate with. The international brands have also realized this and are now giving up their one-product-fits-all mentality in favor of a more local approach. Local brands can customize their products and services to suite the local customer better.
Communicating the Local Revolution
A big part of the local brand movement depends on the way people are communicated the benefits of the locally produced goods and services. America has seen a surge in ‘buy local’ movements especially in farm and dairy products which is a good thing. Sometimes these movements go on to include organic food and anti genetically modified products. For many reasons, customers do not want their diet to be tampered with. Recent controversies surrounding giant multinational corporations around the subject of GMO has made many people skeptical of processed and packaged food. Also the use of excessive fertilizers and pesticides have been raised again and again. Local brands and producers are now preferred by many consumers due to their less ‘industrial’ approach to production. Governments and local media need to focus more on local produce. There are many good examples of campaigns to promote and encourage local produce. The Swadesi movement of India has helped build its cottage industry. The Khadi is been promoted by Indian government as a national handicraft and large fairs are organised all around the country to give access to local producers.
In Oman there is a unique awareness campaign named “Origin Oman” where people are made aware about the benefits of buying local brand products. Their main objectives about Local Brands are:
- Local Brand Products promote national pride in manufacturing sector as well as economic importance of buying products Oman made.
- It will gradually build brand loyalty and reliability for Oman made products.
- It will help increase Oman’s manufacturing capability.
- Reduction in overall imports especially consumption goods.
- It will help in creating employment for all levels.
- It will help in reducing fuel consumption.
The Aftermath of Made in China
The much debated topic of commerce related discussion of the mid 80s and 90s was the major shift of manufacturing to China. The cheap labor and raw materials made mass production possible on a scale which could not be dreamed before. However, the over production became a huge concern and today the major economies are struggling with massive amount of electronic waste and dumping of cheap Chinese goods. This has started threatening some of the old and established businesses back home. Slowly the people have realized that Chinese made goods are not always reliable since China uses multiple standards of production for branded and non branded goods. At the end we find ourselves in a giant pile of unsold goods that are neither usable nor disposable. This is a worrisome state of affairs but on the other side this brings a lot of scope for local brands.
Mighty Global Brands are Not Superior in Quality Either
The tactics of big brands are becoming all too repetitive as they are continuously pumping more money on marketing and advertising. People understand that the advertising adds to the cost of the actual product. Many global brands are diminishing just because they are providing cheap quality products at very high price. Local food related businesses and local restaurant brands take over their international franchise competitors by offering fresh food and better taste. Recently, an independent research named 47 local brands as most sustainable food companies in U.S.
Many global fashion brands offer uniform apparel sizes inappropriate for local markets. They also sell expensive fashion wear that is many times their actual cost. Some brands have been known to employ marketing strategies that are offensive towards local cultures and sensibilities. Such imposing tendencies of brands lead to poor sales and a quick demise in the local markets.
Today, brands can’t just depend on their marketing for a global presence, their product has to satisfy a diverse mix of local demands. Innovative advertising is not enough to attract the modern customer. Global brands should justify their price tag otherwise they are meaningless. On the other hand local brands need to adopt some good things from global brands especially customer service and delivery. In a gist, no brand can easily win on global as well as on local scale so there is scope for everyone’s survival. Thus, local brands should not be threatened by the big mighty brands and continue to improve and innovate.
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