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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  • 1.When the Earth moves Staying alive in a new brand landscape

2. 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 3. Biggest selling single of the year...? 4. Meanwhile...in a hall in Manchester... 5. ...an earthquake happened 6. 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? 7. The result..?0150,000 200,000 50,000 100,0001999 Q11999 Q32000 Q12000 Q32001 Q12001 Q32002 Q12002 Q32003 Q12003 Q32004 Q12004 Q32005 Q12005 Q3(Source: Nationwide)2006 Q12006 Q3 Average House Prices 1999-20092007 Q12007 Q32008 Q12008 Q32009 Q133 years later 8. The only story theyll write about this period? 9. "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 10. There are masses of opportunities in times of recession.Its when the greatest fortunes get made...if youre in a position to have a great idea and fund that idea you can do enormously well. Sir Richard Branson February 2009 11. 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 12. Disaster? Or opportunity...? 13. Change will not come if we wait for someother person or some other time. We are the ones weve been waiting for.We are the change that we seek Barack Obama 14. Advertising works in a recessionAdvertising is vital in a recession Out of sight can mean out of business... 15. 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 16. The Evidence 1991-92 study of 127 UK brands in 46 product categories2: Highest performing brands increased adspend by 7% (and sawaverage 1.1% share growth) Lowest performers cut adspend by 8%, saw share decline of1.6% When times are good you should advertise. When times are bad,3you must advertise 2002, US study of 3500 companies, post 9/11: Maintainers/increasers of marketing activity achievedshare increases averaging twice the size of those cuttingbudgets4 17. The Evidence And we know... That Renault increased market share in early 90srecession with Papa/Nicole campaign and increased spend That market positions change most in recessions Like the positions in a race change at the corners5 That recessions depress media costs SOV easier to achieve and works harder... 18. The Evidence 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 19. The Evidence 98% of Finance Directors working for firms of 1000+ employees support increased marketing spend now6 20. The EvidenceSo why...with some exceptions...isnt it happening? Because of fear..? 21. The Evidence Because theory is one thing... ...practice another Margins for error much reduced... Big budgets wont come to the rescue And an insecurity about how to communicate effectively...now the chips are down... 22. So how? By focusing on two things 23. Connection when the earth moves Success lies In a truth of your brand occupying the same emotional space as atruth of the consumer Your brand potentially has a number of powerful, useful truths built into itsidentity...ripe for re/discovery Do you know what they are? In recognising that customers have in many markets reorderedtheir truths To create a new synchronicity... The new truthof my brandThe reorderedtruths of my customers 24. Connection when the earth moves Then communicate distinctively, clearly, visibly 25. Think of it as Market Seismology 26. Market Seismology Brand and customer in harmony Healthy business, strong relationship 27. Market Seismology Over time...gradual changes in relationship are inevitable...Markets develop, technologies arrive, competitors act Fault creepBut smart companies keep pace via on going research etc...and continue to sustain dialogue/ relationship 28. Market SeismologyAnd then... Earthquake hits... Customer reorders truths, radically, rapidly...New need no longer addressed by brand...Connection fractured... 29. Market Seismology Brand liquefaction 30. Market SeismologyLiquefied... 31. Market Seismology ...and now... 32. Market SeismologyFeeling the shaking... 33. Market Seismology Rebuilding the foundations means adjusting to a changed market.Sinking foundations into the new solid ground 34. Market Seismology: M&S FoodM&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 35. Market Seismology: M&S Food 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 36. Market Seismology: AxaAxa 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... 37. Market Seismology: Axa Understanding that as insurance company this was part ofDNA 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 38. Axa Commercial 2008 39. Market Seismology: Axa 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 wouldnt 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. 40. Market Seismology: Barclaycard 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, Im worth it etc By 1991 truth reordering underway Uncertainties about the future Debt/negative equity concerns More financial risk aversion 41. Market Seismology: Barclaycard Industry orthodoxy promote, financially incentivise, cut A&P budgets Barclaycards 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 42. Market Seismology: Barclaycard 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 43. Market Seismology: Weak FoundationsFrom others...? Responses to a changed world seem less convincing... 44. Market Seismology: Weak Foundations? Lowering the lifeboats... Discounting: retailers weaponof 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 multistore...price becomes onlydifferentiator Margin sacrificed, over and over 45. Market Seismology: Weak Foundations American Airlines Investment...yes But in the genericcampaign? Category benefits We are currently operating in a Product still lags behind BA, particularly competitive environment Virgin, Singapore Airlines and it is important for us to invest inet al promotional activity to drive continued Without product lead, consideration of the American Airlineswheres the insight? brand by discerning UK travellers.Maria Sebastian We know why you fly? President Sales and Marketing EMEA. Do you? 46. Market Seismology: Weak Foundations? And the apology campaign by The Standard? Solving the wrong problem? Consumer reordering moving awayfrom print medium... Recessionary pressures haveaccelerated 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 forLondon Jury is not yet in... still less out! 47. Market Seismology: Weak Foundations Others seem caught in the headlights... Car Industry (paralysis) Banking (denial) Building industry (temporary death) But for others still, a new landscape... 48. Market Seismology: A new landscape For some, the shifting earthbrings new windfallopportunities Fewer driven away? And - by happy chance -new audiences suddenlyexploring the brand, asreordering brings it into view 49. 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% 50. Market Seismology: A new landscape In this new territory, connections may not yet be fully made... A need to make the brand part of the new buyers life before... The earth shifts again...or slides out of recession With new customers knowing no reason to stay when theirtruths are reordered once more Someone else in their new world does it instead Your competition... 51. Market Seismology: A new landscape For these brands issue isnow how to cementloyalty...how to bond... Its about 2010/2011 now... Is it happening? Mixed signals 52. Market Seismology: A new landscape And for others?For whom the happy chanceisnt 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? 53. When the ground shifts There are conversations to be had now as ever, becauseRecession 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&Gs 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... 54. When the ground shifts...take your brand to pieceslook inside 55. When the ground shifts ...take the mind of yourcustomer to pieces...look inside 56. Connection when the earth moves ...do this... The new truth of my brandThe reordered truths of mycustomers...and we can help you do it 57. Or... ...there is another way... 58. Cause the nextearthquake yourself... and wait for them to come... 59. changebased on truth qualitative research - idea generation - creative consultancy brand planning Jo Shaw 07917 194535 jo@differentriver.co.uk Vikki McKeegan 07831 278530 victoria@differentriver.co.uk www.differentriver.co.uk 60. References1. 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 ROIAdmap Jan 09 6. KDB, Media Week March 25 09