Brands And Austerity

Graduate Presentation

How Should Brands Behave in an Age of Austerity?

“It was the best of times, it was the worst of times” – Charles Dickens (1859) A Tale of Two Cities.

Are we in an age of austerity?

• Governments across Europe are forcing through tough austerity measures to tackle huge budget deficits.

23 June 2010

• Double-dip recession 'more likely' as UK faces two years of house price pain.

15 Sept 2010

• IMF warns of the 'human cost' of public spending cuts. 13 Sept 2010

But what about now?Google Insight

“Our choices and decisions aren’t just governed by where we are, it’s whether there’s a discount as well”

Michelle Strutton Senior FMCG Analyst, Feb 2010

1991 Recession advert aimed at Brand behaviour

General Brand Response1. Inertia 3. Cut Costs2. Lower prices

“The customer’s experience with the product must continue to live up to the promise of the brand, the company must not sacrifice its image and identity by cheapening its product.”

Charan 2009 p.56 found in Effective marketing strategies for a recession

B2B International journal

What is the Recession Strategy?

• Listen to what the consumer needs• Understand who you are as a brand• Bear in mind that marketing in a bad

time is different to marketing in a good time.

Do not fear the inevitable change:“the great [brand] leaders of the last

twenty years have known how to tame change” Jean Marie Dru

Unfortunately there is no general recession brand strategy

But each new campaign strategy should:

Next warns of higher clothes prices but sees no double dip recession as profits jump

Understanding - Who are today’s consumer?

Discretionary spending takes a hit“Spending less on eating out, me and my friends have dinner parties instead because everyone agrees its luxury we cant afford right now. We’ll only eat out if there is a really really good deal on” 16-24 yr old ABC1 female

Portfolio approach: Cutting a bit of everything“Rather than cut back on one specific item I would more likely cut a little from each budget…This allows you to do all the things you are used to doing and you don’t miss out on things you enjoy” 35-44 yr old C2DE male

Travel may be the exception“Only a one-off expensive holiday”

Over-55 yr old ABC1 male

Listen to what the consumer needs:

The change of spending priorities

“ We should be driven by tomorrow’s people” Jean-Marie Dru

The 6 identified Consumer Recession Strategies

Roz Calder during a TNS study has

identified 6 core recession strategies that have been adopted by today’s consumers

Fight and ExploitCompete and TriumphStrategise and PlanRetreat and DefendCollaborate and AcceptAvoid and Indulge

Multi modal consumer

• A consumer may embrace several of these responses at different times and across different categories.

• Understanding this consumer psychology will enable a brand to understand what connects their brand to their consumer

Brands need a strong

• “I think, first and foremost, a strong brand is one that has a clearly defined story to tell and everything emanates from there” Crispin Reed - MD Brandhouse

• Brands need to behave as their identity suggests“A lot of things have changed, but values and core

values, those things shouldn’t change. The thing’s that Apple believed in, at it’s core, are the same things that Apple really stands for today.”

Steve Jobs – Co founder and CEO Apple

Understand who you are as a brand:

REBEL

EXPLORERHERO

RULER

CREATOR

SAGE

CAREGIVER

LOVER

MAGICIAN

TRIBAL MEMBER

ENTERTAINER

INNOCENT

“Archetypes provide the missing link between consumer motivation and product sales”

Blog:

Web article:

Examples of brands aligning their archetype with their most responsive consumer strategy

“Ryanair to charge for online check in” (May 2009)

http://customerlistening.typepad.com/customer_listening/2009/04/pg-and-cocacola-keep-spending-up-despite-recession.html

All ‘Smithy owners’ will have the opportunity to vote online on key decisions on his progress, for example on the meets he should race at (in consultation with his trainer).

“Why Smithy will be National hero.. he's the people's horse” (31/10/2009)

Also read about Smithy’s No Nonsense views at www.johnsmiths.co.uk/smithy

Also bear in mind key differences when

marketing in a Bad time vs marketing in a Good time:

“Effective Marketing strategies for a recession” (2009)

Summary

Strong Brand Archetype

Strong Brand Archetype

Aligned Consumer Recession Strategy

Aligned Consumer Recession Strategy

Practical marketing awareness

Practical marketing awareness

Minimal Risk Assessment Strategy for a Brand

+ +

“Today we no longer judge brands simply by the products they make or the services they propose but by the way they

behave. Brands need to know how to take initiatives…and how to reinvent themselves”

ReferencesPublications:B2B International (2009), Effective Marketing Strategies for a recession, B2B International Ltd

Charan, R, (2009), Leadership in the Era of economic uncertainty, McGraw Hill

Dru, J, (2007), How disruption brought disorder, Palgrave Macmillan

Mark, M & Pearson, C, (2001), The Hero and the Outlaw, Building extraordinary brands through the power of archetypes, McGraw Hill

Articles:Data monitor, UK Consumer Insight 2010: Waitrose Food, September 2010

Brandhouse, Protecting your brand during a recession, May 2009

TNS Consumer, What is a real recession resonse?, 4th July 2009

Mintel, British Lifestyles 2010 – focusing on the essentials

Mintel, British Lifestyles 2010, Market forecasts to 2015

Strategy Business, The new consumer frugality, 15 March 2010