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When the Earth moves Staying alive in a new brand landscape

Brand Seismology: Staying Alive in a new brand landscape

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Different River looks at the implications of the recession for brands...and sees a way foward based around continuing to understand the truth of people's needs and of what they can offer.

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Page 1: Brand Seismology: Staying Alive in a new brand landscape

When the Earth moves

Staying alive in a new brand landscape

Page 2: Brand Seismology: Staying Alive in a new brand landscape

Back to the Seventies...

• 1973: OPEC quadruples oil prices

• 1974: Miners‟ strike, power cuts, three day week

• July 1973-Sept 1975, UK economy in recession in

five out of nine quarters

Page 3: Brand Seismology: Staying Alive in a new brand landscape
Page 5: Brand Seismology: Staying Alive in a new brand landscape

Meanwhile...in a hall in Manchester...

Page 6: Brand Seismology: Staying Alive in a new brand landscape

...an earthquake happened

Page 7: Brand Seismology: Staying Alive in a new brand landscape

33 years later

• Relentless bad news?

• Initial exposure to bad

debts in banking sector

leads to vast loss of

confidence

• Financial markets, and much

of business world, in hands

of executives who have only

ever known growth...

• World turned upside

down?

Page 8: Brand Seismology: Staying Alive in a new brand landscape

The result..?

£0

£50,000

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£200,000

19

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Average House Prices 1999-2009 (Source: Nationwide)

33 years later

Page 9: Brand Seismology: Staying Alive in a new brand landscape

The only story they‟ll write about this period?

Page 10: Brand Seismology: Staying Alive in a new brand landscape

"I was asked what I thought about the recession.

I thought about it and decided not to take part."

Sam Walton, Founder of Wal-Mart

Page 11: Brand Seismology: Staying Alive in a new brand landscape

“There are masses of opportunities in times of recession.

It‟s when the greatest fortunes get made...

if you‟re in a position to have a great idea and

fund that idea you can do enormously well.”

Sir Richard Branson February 2009

Page 12: Brand Seismology: Staying Alive in a new brand landscape

„Flanked by models and fashionistas, the retail billionaire Sir Philip

Green was on pleasingly combative form at the opening of the New

York outpost of Topshop this week. Having waited in line for 45

minutes to speak to the great man, I had the chance to lob a few

questions in his direction, largely about the wisdom of opening a

$24m superstore in the middle of an economic downturn.

"We've put a massive investment in this store. America wants us to

invest again and we're happy to do it," Green told me.

Britain's ninth richest man soon got bored of this line of questioning,

though, and snapped: "Go and take a picture of the people queuing

up outside the store. Put that in the fucking Guardian. You're all so

bloody miserable.” ‟

The Guardian April 3rd 2009

Page 13: Brand Seismology: Staying Alive in a new brand landscape

Disaster?

Or opportunity...?

Page 14: Brand Seismology: Staying Alive in a new brand landscape

“Change will not come if we wait for some

other person or some other time.

We are the ones we‟ve been waiting for.

We are the change that we seek”

Barack Obama

Page 15: Brand Seismology: Staying Alive in a new brand landscape

Advertising works in a recession

Advertising is vital in a recession

Out of sight can mean out of business...

Page 16: Brand Seismology: Staying Alive in a new brand landscape

The Evidence

• Arguments are already becoming well rehearsed...

• 1930s...P&G piloted the soap opera - highly innovative

marketing

• 1939-45 : brands that continued to advertise even when

unavailable dominated post war/post rationing markets

• Early 1980s recession – study of 600 US companies saw those

who sustained/increased ad budgets showing average 256%

increase in sales vs others by 19851

Page 17: Brand Seismology: Staying Alive in a new brand landscape

• 1991-92 study of 127 UK brands in 46 product categories2:

– Highest performing brands increased adspend by 7% (and saw

average 1.1% share growth)

– Lowest performers – cut adspend by 8%, saw share decline of

1.6%

– “When times are good you should advertise. When times are bad,

you must advertise”3

• 2002, US study of 3500 companies, post 9/11:

– Maintainers/increasers of marketing activity achieved

share increases averaging twice the size of those cutting

budgets4

The Evidence

Page 18: Brand Seismology: Staying Alive in a new brand landscape

• And we know...

– That Renault increased market share in early 90s

recession with Papa/Nicole campaign and increased spend

– That market positions change most in recessions

• “Like the positions in a race change at the corners”5

– That recessions depress media costs

• SOV easier to achieve and works harder...

The Evidence

Page 19: Brand Seismology: Staying Alive in a new brand landscape

• Up to date evidence is already emerging...

• Nielsen 2009 US study shows that financial brands which are

increasing ad spend are much better able to maintain

confidence

The Evidence

Page 20: Brand Seismology: Staying Alive in a new brand landscape

• 98% of Finance Directors working for firms of 1000+

employees support increased marketing spend now6

The Evidence

Page 21: Brand Seismology: Staying Alive in a new brand landscape

So why...with some exceptions...isn‟t it happening?

Because of fear..?

The Evidence

Page 22: Brand Seismology: Staying Alive in a new brand landscape

• Because theory is one thing...

...practice another

• Margins for error much reduced...

– Big budgets won‟t come to the rescue

• And an insecurity about how

to communicate effectively

...now the chips are down...

The Evidence

Page 23: Brand Seismology: Staying Alive in a new brand landscape

So how?

By focusing on two things

Page 24: Brand Seismology: Staying Alive in a new brand landscape

Connection when the earth moves

• Success lies

– In a truth of your brand occupying the same emotional space as a

truth of the consumer• Your brand potentially has a number of powerful, useful truths built into its

identity...ripe for re/discovery

• Do you know what they are?

– In recognising that customers have in many markets reordered

their truths

• To create a new synchronicity...The new truth of my brand

The reordered truths of my customers

Page 25: Brand Seismology: Staying Alive in a new brand landscape

Then communicate distinctively, clearly, visibly

Connection when the earth moves

Page 26: Brand Seismology: Staying Alive in a new brand landscape

Think of it as Market Seismology

Page 27: Brand Seismology: Staying Alive in a new brand landscape

Market Seismology

• Brand and customer in harmony

• Healthy business, strong relationship

Page 28: Brand Seismology: Staying Alive in a new brand landscape

Market Seismology

Over time...gradual changes in

relationship are inevitable...

Markets develop, technologies

arrive, competitors act

„Fault creep‟

But smart companies keep pace via

on going research etc...and continue

to sustain dialogue/ relationship

Page 29: Brand Seismology: Staying Alive in a new brand landscape

Market Seismology

And then...

Earthquake hits...Customer reorders truths,

radically, rapidly...

„New‟ need no longer addressed by

brand...

Connection fractured...

Page 30: Brand Seismology: Staying Alive in a new brand landscape

“Brand liquefaction”

Market Seismology

Page 31: Brand Seismology: Staying Alive in a new brand landscape

Market Seismology

Liquefied...

Page 32: Brand Seismology: Staying Alive in a new brand landscape

...and now...

Market Seismology

Page 33: Brand Seismology: Staying Alive in a new brand landscape

Feeling the shaking...

Market Seismology

Page 34: Brand Seismology: Staying Alive in a new brand landscape

Market Seismology

Rebuilding the foundations

means adjusting to a

changed market.

Sinking foundations into the

new solid ground

Page 35: Brand Seismology: Staying Alive in a new brand landscape

Market Seismology: M&S Food

M&S Food

• Symbolic of growth in disposable incomes in

1990s/early 2000s...

– Its truths...

• Expensive

• High Quality

• Occasional

• Truths of its customers?• A sense of affluence and entitlement

• Personal indulgence a driver

• Outer directedness

Page 36: Brand Seismology: Staying Alive in a new brand landscape

• Some truths about their customers now?

– Nervousness about the future?

– Harder to justify indulgent grocery buying?

– Still enjoy quality food.

• M&S authentically reframes the truth of quality.

– Change the terms of reference...

• Positioning as alternative to going out (“Dine In” promotion)

• Remains true to M&S brand, recognisable

• Reflects reprioritised needs of customer

Market Seismology: M&S Food

Page 37: Brand Seismology: Staying Alive in a new brand landscape

Axa

• Until 2007, positioned around „Be Life Confident‟

– Achieve your plans/dreams etc

• Financial market catastrophe in 2008 changed

everything

• New thinking that involved:

– Understanding customer change

• Loss of trust in banks, anger, disillusionment, betrayal

• A deep need for security and reassurance...

Market Seismology: Axa

Page 38: Brand Seismology: Staying Alive in a new brand landscape

– Understanding that as insurance company this was part of

DNA of brand...

• Insurance should be about being on the side of the

insured when times are hard

– The accident/death etc

– The worldwide financial disaster

• Axa returns to the truth of protection

Market Seismology: Axa

Page 39: Brand Seismology: Staying Alive in a new brand landscape

Axa Commercial 2008

Page 40: Brand Seismology: Staying Alive in a new brand landscape

• From Axa website...

“We launched our new Global Vision called „Redefining Standards‟

because we realised that without your trust, we are nothing, and that

trust demands that we do things that prove we are worth trusting.

Too many standards in finance and insurance are sub standard:

standards that suit everyone else except you: standards that certainly

wouldn‟t make you trust anyone: and some quite the opposite. So we

decided to „do‟ something about them.

Having begun this journey to a better place, it made sense to invite

you to come with us”.

Market Seismology: Axa

Page 41: Brand Seismology: Staying Alive in a new brand landscape

Barclaycard

• 1991 – brand makes its first loss

• Economy plunging, new competitors entering

• Consumer truths of 1980s

– Credit boom, self indulgence, have it now pay tomorrow (or ever)

– Secure, „loadsamoney‟, „I‟m worth it‟ etc

• By 1991 truth reordering underway

– Uncertainties about the future

– Debt/negative equity concerns

– More financial risk aversion

Market Seismology: Barclaycard

Page 42: Brand Seismology: Staying Alive in a new brand landscape

• Industry orthodoxy – promote, financially incentivise, cut A&P

budgets

• Barclaycard‟s response?

– Added £8 pa charge

– Plus 100 day purchase cover

– Plus international travel assistance

• These features spoke to the prevailing mentality

• Barclaycard developed its truth of security and trust

– Understood that discounting/offer based marketing

– Or cutting budgets

...would not speak most usefully and successfully to the need

• Brand doubled adspend

Market Seismology: Barclaycard

Page 43: Brand Seismology: Staying Alive in a new brand landscape

• Result?

– Barclaycard took market leadership from Access

– Access cut spend, avoided addition of new benefits (but

added the fee)...

– ...Access brand sold to Mastercard 1996

Market Seismology: Barclaycard

Page 44: Brand Seismology: Staying Alive in a new brand landscape

From others...?

Responses to a changed world seem less convincing...

Market Seismology: Weak Foundations

Page 45: Brand Seismology: Staying Alive in a new brand landscape

• Lowering the lifeboats...

– Discounting: retailers‟ weapon

of choice...

• Responding to new world of high

price sensitivity (which they partly

stimulated)...

– Supermarket price wars

– Identical strategy from many

• But loyalty/engagement?

– Shopping trips become multi

store...price becomes only

differentiator

– Margin sacrificed, over and over

Market Seismology: Weak Foundations?

Page 46: Brand Seismology: Staying Alive in a new brand landscape

Market Seismology: Weak Foundations

• American Airlines

• Investment...yes

• But in the generic

campaign?

– Category benefits

• Product still lags behind BA,

Virgin, Singapore Airlines

et al

• Without product lead,

where‟s the insight?

• “We know why you fly?”

– Do you?

“We are currently operating in a particularly competitive environment and it is important for us to invest in promotional activity to drive continued consideration of the American Airlines brand by discerning UK travellers.”

Maria Sebastian President Sales and Marketing EMEA.

Page 47: Brand Seismology: Staying Alive in a new brand landscape

• And the „apology‟ campaign by

The Standard?

• Solving the wrong problem?– Consumer reordering moving away

from print medium...

– Recessionary pressures have

accelerated this

• Most pressure on paid print

medium...without a compelling/

unique benefit.

• But an attempt to re-explore

other latent truths of the brand

for a new age...?– Campaigning, rallying point for

London

• Jury is not yet in... still less out!

Market Seismology: Weak Foundations?

Page 48: Brand Seismology: Staying Alive in a new brand landscape

• Others seem caught in the headlights...

– Car Industry (paralysis)

– Banking (denial)

– Building industry (temporary death)

• But for others still, a new landscape...

Market Seismology: Weak Foundations

Page 49: Brand Seismology: Staying Alive in a new brand landscape

• For some, the shifting earth

brings new windfall

opportunities

• Fewer driven away?

• And - by „happy chance‟ -

new audiences suddenly

exploring the brand, as

reordering brings it into view

Market Seismology: A new landscape

Page 50: Brand Seismology: Staying Alive in a new brand landscape

Market Seismology: A new landscape

• The Economist - sales increase Jun-Dec 2008: 2.4%

• Match.com - 26% y/y membership increase

• LoveFilm reporting 40% membership increase in recent months

• McDonalds, KFC, Burger King all benefitting from shifts in

priorities/behaviour and growing

• Confectionery industry posting impressive results

• Timpson – shoe repairs showing huge growth

• „Dinner party foods‟, wine, selling well

– Home cooking ingredients too...(pasta/rise up 20.8% year to Mar 08 etc)

• Garden centres/garden products performing very well...

– Wyevale garden centres 50% growth, Homebase gardening products up

85%

Page 51: Brand Seismology: Staying Alive in a new brand landscape

• In this new territory, connections may not yet be fully made...

• A need to make the brand part of the new buyer‟s life before...

– The earth shifts again...or slides out of recession

• With new customers knowing no reason to stay when their

truths are reordered once more

– Someone else in their new world does it instead

• Your competition...

Market Seismology: A new landscape

Page 52: Brand Seismology: Staying Alive in a new brand landscape

• For these brands – issue is

now how to cement

loyalty...how to bond...

• It‟s about 2010/2011 now...

• Is it happening?

– Mixed signals

Market Seismology: A new landscape

Page 53: Brand Seismology: Staying Alive in a new brand landscape

• And for others?

For whom the „happy chance‟

isn‟t so evident?

– The challenge...opportunity...

– Find the new

customer...and/or

the new „fit‟– Is there a truth of your brand

ready to draw a new

customer to you...?

• Are they waiting to hear from

you?

Market Seismology: A new landscape

Page 54: Brand Seismology: Staying Alive in a new brand landscape

When the ground shifts

• There are conversations to be had – now as ever, because

Recession is no more than change• Some human truths return to the top of the agenda..?

– Security

– Hope

– Real value (not simply price)

• Genuineness – in performance and promise

– P&G‟s „Performance -based value messaging‟

– Meaning – less time and money to waste on the pointless

– An end to waste – synchronous with green agenda

– Renewed exploration of what makes us happy

– Authenticity and honesty...

Page 55: Brand Seismology: Staying Alive in a new brand landscape

When the ground shifts

...take your brand to pieces

look inside

Page 56: Brand Seismology: Staying Alive in a new brand landscape

...take the mind of your

customer to pieces...

look inside

When the ground shifts

Page 57: Brand Seismology: Staying Alive in a new brand landscape

Connection when the earth moves

...do this...

...and we can help you do it

The new truth of my brand

The reordered truths of my customers

Page 58: Brand Seismology: Staying Alive in a new brand landscape

Or...

...there is another way...

Page 59: Brand Seismology: Staying Alive in a new brand landscape

Cause the next

earthquake yourself...

and wait for them to come...

Page 60: Brand Seismology: Staying Alive in a new brand landscape
Page 61: Brand Seismology: Staying Alive in a new brand landscape

qualitative research - idea generation - creative consultancy – brand planning

Jo Shaw 07917 194535 [email protected]

Vikki McKeegan 07831 278530 [email protected]

www.differentriver.co.uk

change based on truth

Page 62: Brand Seismology: Staying Alive in a new brand landscape

References

1. McGraw-Hill Research www.machtech.com/adsales/recession_marketing/

2. The Billett Consultancy

3. Penton Research Services, Cooper & Lybrand, Business Science International study

4. PIMS/Paul Dyson www.warc.com

5. Sarah Carter, DDB „How to get your brand heard in a recession and boost your ROI‟

Admap Jan 09

6. KDB, Media Week March 25 09