I am the leader in Quality and Brand Image, how come my competitors keep taking away my customers ?

I am the leader in Quality and Brand Image, how come my competitors keep taking away my customers? That was the question buzzing in the mind of the Head of Marketing, Middle East Region of an electrical products manufacturer. Market Search was called in to understand the reasons for client attrition for this famous brand of Electrical Switches and sockets in the Middle East.

Market Search conducted a combination of Market Appreciation study and customer satisfaction study to understand the market dynamics. The study brought forth some very interesting aspects of the market.

• The decision to buy a particular brand for a project rested in the hands of a group of specifiers – Consultants, Architects , Interior Decorators etc.

• The actual purchase and installation was done by a different group of professional Electrical Contractors.

• Our client had a very strong brand image across the entire length of the brand decision making and consumption chain starting from Consultants, Architects to home / office owners.

• The brand image was so strong that the brand had become synonymous for good quality electrical products in the region.

• Given this scenario, the nearest competitor had a share which was less than half the share of our client and there were at least five other brands aiming for a share of the market. Most of these companies used a price discounting strategy given the extreme competition for a small part of the market.

• The electrical product purchase process was normally undertaken by the Electrical Contractors who quote a project based fee including the cost of materials in the project. Given the strength of the client brand , most had a limited say in the price offered to them and hence had to live with reduced margins.

• At the same time, the client’s sales team started focusing on large projects involving Big Consultants , Architects only, leaving the smaller projects to be handled by their distributors sales teams. This sent a feeling of “being ignored by …. because they have become big” among the medium sized Electrical contractors.

• Given the lean teams the client operates with, the feeling was easy to exploit and be fanned by the competition to gain foothold into the market. At times the Electrical Contractors found they had to use the client’s brand since it was insisted upon by the Architects / Consultants and felt stifled by the brand.

• Most Electrical Contractors in this region were from the Indian sub continent where building personal equations and maintaining these were important aspect in conducting business.

• A combination of internal (lean teams, focus on growth) and external (limited scope for other competitors, psyche of the key constituents in the chain) factors had brought about a tricky situation for the leader.

Once the research highlighted the underlying reasons for the low brand loyalty levels, our client initiated a series of customer relation building exercises and expanded the team size to serve the larger user base. Within months the decline in loyalty was arrested and the brand became the loved one by all in the consumption chain – Consultants, Architects, Contractors and Trade.