Drugi jezik na kojem je dostupan ovaj članak: Bosnian
By: Ekrem Dupanović
Two days ago we published the latest Valicon Top 25 ranking of brands in the region and the Top 10 list of brands by countries in the Adriatic region. The excitement that these rankings caused is still going strong. In this, his first interview after the publication of the rankings, Zenel Batagelj, partner at Valicon, commented on what impacted the rankings of particular brands, why they took the positions they took, what changes there are in the trade and why 2017 will be a year full of new thrills.
Media Marketing: After several years Coca-Cola managed to dethrone Milka. Did that came as a surprise for you?
Zenel Batagelj: All the brands on Valicon TOP 25 regional ranking, and Valicon TOP 10 local rankings are top brands. These are often national or global brand icons, and all of us in marketing can learn both from their good examples – and also from their mistakes.
To compare Coca-Cola and Milka is difficult – both brands are pushing the boundaries. They are companies that try everything out, and they have some good practices, but certainly some failures as well.
The answer is: yes and no. Both brands have a similar problem – they contain sugar, which along with salt and flour is one of the leading so called “white deaths”. Because of this, Coca-Cola is highlighted in all the articles that talk about how harmful sugar is and how much sugar particular products contain. In a way, Coca-Cola is synonymous with sugar. One consequence of this is that the category of sweetened drinks is declining. And yes, it is also a surprise because Coca-Cola has many competitors, the biggest being traditional traders’ own brands, including discount brands; and let’s not forget that globally there is also Pepsi, and in the region there’s the local brand Cockta. All three are on the VALICON TOP 25.
On the other hand, it’s not a surprise because Coca-Cola is also synonymous with perfection in its development of sales channels. Coca-Cola is omnipresent. It can be found where you least expect it, even in the refrigerators of the homes of people who don’t actually drink cola drinks. And it’s also not a surprise because of their marketing. Their communications outgrew classic “advertising” long ago. Regarding communication, the brand has rejuvenated itself, it’s got new visuals, it’s no longer just about the social scene, and sometimes Coca-Cola can even be a bit sexy. But their Santa Claus and Coca-Cola trucks are still there. Personally speaking – and we still haven’t seen this in our country – I am really glad that they are bringing their red back on all their extensions, so even the black Zero has got its typical “red stamp”. Somehow it seems that everything we’re talking about – the importance of brand identity, visual identity and color-codes – they’ve got it all.
If we look at everything that I said in terms of all of these elements – sales, visuals and communication – Milka is a leader. But with Milka there is one more important element – innovation. Their launch of new combinations and tastes in the segment of chocolates is amazing, and the brand itself, because of its excellent platform, is expanding nicely to other categories. If we were to measure the brand Milka in cross-category terms, it would most likely be the first on the list, but for now it’s not.
The success of Coca-Cola is a big win for marketing – everything is possible, even in the most difficult circumstances!
Media Marketing: There weren’t any changes in the Top 5 brands, except that they changed places. What does this indicate?
Zenel Batagelj: Great brands constantly work on themselves – some more successfully than others. And some brands and categories were subject to more fierce competition. Cedevita, for example, finally found some breathing space this year with a new redesign that really worked. But it should be borne in mind that the differences at the top are becoming smaller and smaller as the brands become more regional. Each of them has its chance, they only need to seize it. The biggest battle is for third place – who will take the third spot is a matter of who will be more successful in the region’s largest market, the Serbian market.
Media Marketing: Strong brands, which we find practically every year on these rankings, are brands who “work on themselves”, who work on the market, and consequently their index rises, which consistently keeps them in leading positions. What can other brands learn from this, if they want to strengthen their market position?
Zenel Batagelj: This ranking was first published way back in 2003. The goal was for it to become a mirror, and thus an incentive for brands to step out of the safe leeward of their local stories. In Slovenia, we felt early on the meaning of the power of retailers, the common European market, but also the discounters. Serbia is in a panic due to the entry of Lidl, and in Slovenia we have three of them. In order to survive you have to grow, to expand, to go beyond your limits – and our biggest limits are in our way of thinking. We must make that mental “leap”.
We must observe the biggest brands – those who constantly grow – to understand what they did to become so successful. We should set targets: to which regions will we go next year, which level of the brand pyramid will we build? Will it be brand awareness – which means working on communication, promotion and testing of products – or will it be its use – creating a habit and working at the point of sale.
The thing that always works – and not only in FMCG but also in the service sector – is that the offense is the best defense. Internally, it always creates that winning spirit, which we never have enough of in the companies of the region.
Media Marketing: In the national rankings of the most popular brands (except in Bosnia and Herzegovina), local brands dominate, which proves the loyalty of consumers to local products. Is this a trend that is becoming constant?
Zenel Batagelj: I look at local brands as icons, as part of the national identity. In the age of bifurcation, where global and local, in the sense of community where I live, are gaining strength, brands play an important role in the development of national identity. Those are “our” brands. In Bosnia and Herzegovina there are always problems because of various “isms” – what is “ours” there? If I look at the ranking, the one that is most “ours” is Argeta paté, and among original Bosnian brands, the brand that is most “ours” is Violeta.
Some of the regional brands were able to take advantage of the common memory from the time of the former Yugoslavia. Many brands had that potential, but only some took advantage of it.
Local consumers are no longer sheep, they are no longer loyal, and the question is how relevant the concept of loyalty is still. A consumer prefers their favorite brands, but only if they give them some value, and that value is not just in the product, but also in that other part, where they buy their dignity, their moment.
The trend is therefore clear – Yes, I want local, I want a domestic brand, one I can be proud of.
Media Marketing: What are the trends in the development of trade? Are the cards being reshuffled in the national and regional markets? How effectively can the local trade chains resist the foreign competitors?
Zenel Batagelj: This year we will carefully monitor how Serbian consumers react to the entry of Lidl in Serbia. This is a huge test for local traders and manufacturers. They all need to observe carefully what happened and what is happening now in Slovenia and Croatia. I would recommend that everybody in this business in Serbia visit Lidl’s stores in Vukovar, Zagreb…
Media Marketing: What else will mark 2017 in the market?
Zenel Batagelj: By all the indicators we will be focused on the Serbian market. All regional brands have the highest potential for growth in that market. On the other hand, there is the entry of Lidl. At the same time I expect intense regionalization of Serbian brands – they will need to look for sources of growth outside their country, and even outside those prime foreign markets – Republika Srpska and Macedonia. We will probably see greater intensity in the Federation of Bosnia and Herzegovina.
This will be an interesting year. We will see the start of “appisation” in the FMCG sector, campaigns are going to be more and more interactive and interesting, the entry of Amazon into traditional retail will begin a new era in the market. I expect the first such shops to be discount stores, due to the standardization of their trade and less complexity in their product range. There will also be attempts to develop new direct sales channels. There’s a lot of it in Slovenia and Croatia, but now bigger players might come into this field as well.
I really look forward to this year. It will be very exciting!