Revisiting Brand Management Policies – Inbound Logistics

The recent health crisis has increased online sales and expanded the types of products shipped to consumers. As consumers, shippers and retailers become more familiar with online commerce, the trend away from physical sales will likely continue even after the health crisis subsides.

But the jump in online sales has also helped manufacturers better understand how to protect their brand reputation in this new retail environment. As they adjust their brand management policies, they will expect all companies in their distribution chain to play a role.

Adjust brand management

Successful manufacturers have long recognized the need to ensure that the way their products are transported, displayed, priced and sold is consistent with the desired brand image. They select the right number of retailers in the right places, then choose the right logistics companies to deliver at the right time.

They also implement brand management policies to ensure that customers see the product and its price in the right way. There are legal limits to the restrictions that manufacturers can impose on the management and promotion of their products by their distribution chain. For example, retail price restrictions can be particularly dangerous. However, manufacturers enjoy a great deal of freedom here.

Today, manufacturers are reviewing these policies to cover new concerns revealed during the crisis-induced surge in online sales. Here are four steps they will consider taking:

1. Prevent “too high” prices. From toilet paper to hand sanitizer, some retailers have suddenly jacked up the prices of high-demand products. Consumers might not understand that it was the retailer, not the manufacturer, who did the “price pricing” and undermined the manufacturer’s reputation. Manufacturers often worry about the retail price of their products. Antitrust law limits the retail price restrictions that manufacturers can impose; however, maximum resale prices are far less dangerous, as they protect consumers as well as brands. Expect to see more price caps to help consumers have the expected shopping experience, even in times of crisis.

2. Change the use of brand elements. Will the manufacturer allow the use of its name, logo, and other elements on the retailer’s website, shipper trucks, and signs in the physical store? Will it require the use of its brand elements on boxes that may now be the primary means for its products to reach consumers? If so, how will this affect picking, packing and shipping costs? As the delivery truck and box become the new “shelf” on which the product is presented, manufacturers will ensure that the correct brand image is displayed.

3. Stop the various “bad” advertisements. Good brand management policies have always given manufacturers the ability to prevent their brands from being associated with late-night TV peddlers and inflatable gorillas on store roofs. Now they will have to cover retailer contextual advertisements and incorrect product descriptions on retailer websites.

4. Make sure the right retailer sells in the right place. Manufacturers require retailers to sell from a specific physical store with plenty of inventory and prevent wholesale sales to sub-retailers reselling the goods in an alley in a major city. Now, manufacturers will want to approve their retailers’ online outlets. Some can even make sure their products don’t end up on an auction or third-party website.

The recent health crisis has accelerated the trend for consumers to buy more different products online. Manufacturers concerned about their brand reputation will impose new brand management policies or adjust their current policies to reflect the new reality. Each company in the distribution chain must anticipate these changes.

Cathy W. Howerton