Manufacturers Changing Tactics in Response to Recession: Study

According to a recent report from U.K.-based global research firm IGD, 90 percent of manufacturers have altered their strategies to deal with the economic recession, and 88 percent have taken action to reinforce their products’ value.

“Trading Strategies in and Beyond the Recession” found that manufacturers are hammering home the value proposition by implementing a series of tactics to address shifting consumer shopping patterns:

--43 percent of manufacturers have rolled out more promotions as way to reinforce product value
--42 percent have changed pack sizes to bolster their value offer
--28 percent are using price reductions to compete in the current trading environment
--Nearly two-fifths (39 percent) view private label as a chance to increase volume and expand into new categories
--Slightly under a third (31 percent) are developing long-term relationships with key discounters to take advantage of the growth opportunity presented by this channel

“Food and grocery manufacturers are rising to the challenge of delivering extra value for shoppers in a recession,” noted TGD chief executive Joanne Denney-Finch. “They are responding to fast-changing trends. The high cost of many raw materials has limited the scope for direct price cuts. But an extra emphasis on promotions, new pack sizes to suit different budgets, and new advertising campaigns to reinforce traditional brand values have all helped many manufacturers to withstand the tough trading conditions.”
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