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Derrick Daye Recession Marketing

Defying The Genericizing of Brands

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As marketing budgets shrink and tip in favor of value messaging and cost incentives rather than brand-building, the absence of the latter in favor of the former is acutely dangerous. This type of price-driven activity has historically been considered a generic, low-level marketing practice, and normal branding rules have not applied. While that may have worked well enough during flush times—when larger branding efforts acted as a halo and compensated for generic activity—today all communications must incorporate brand-building. Otherwise,brands risk coming across as interchangeable, schizophrenic, watered-down and reactionary.

Take, for instance, the interchangeable messages that are coming from various U.S. fast-food joints. There’s Subway’s $5 Footlong, Arby’s 5 for $5 and Little Caesars $5 Hot-N-Ready. The simple message: Get more for less. Little is said about the taste or quality of the food. And little is said of Citroën’s technological prowess in a U.K.campaign that simply lists the prices and economic advantages (fuel-consumption data) of the automaker’s C1, C3 and C4 models. This is a real departure from Citroën’s previous long-running campaign for the C4, which starred a funky futuristic transformer that illustrated the tagline “Alive with technology.”

Even more problematic is when price-led efforts are disconnected from concurrent branded efforts—evident in an effort for the Morrisons supermarket chain in the U.K. In a clear attempt to stifle the ominous threat from discounters, Morrisons has ramped up its price-led advertising. A series of cheap-looking ads fronted by Nick Hancock—a fairly low-profile, low- cost TV face—highlight some worryingly low prices: all the ingredients for a family barbecue for just £4. Confusingly, a simultaneous campaign uses higher-profile celebrities (Helen Baxendale,Tara Fitzgerald, Lulu) waxing lyrical about their passion for fresh, quality British produce.

Schizophrenic behavior of this nature dilutes core brand equity. While it may help in the short term, knee-jerk reactions to the immediate environment can prove detrimental to the long-term value of the brand, especially if they don’t link up to what a brand represents or the bigger brand idea.

Australia’s top-selling breakfast cereal, Sanitarium Weet-Bix, is a case in point. The latest campaign touts the cereal as “Cheap Fuel” and talks explicitly about its low cost-per-serve, with the closing line “Just 9 cents per Bix.” While the strategy pushes value rather than price (with a new endline of “Exceptional” and a commercial touting a raft of nutrition claims), being seen as “cheap” provides no protection from the threat of private-label brands that offer the same product at a lower price.

In today’s landscape, it’s more important than ever to differentiate your brand—to give people a reason to believe and, subsequently, a reason to buy. But now that we’ve entered an era in which price- and value-related tactics comprise a large part of many marketing budgets, how can brands avoid messaging that feels or sounds generic? 

Make branded tactics as important as brand strategy.

This is not another argument for maintaining or increasing brand spend during a recession. While this is a proper solution that has proven to work to the enduring advantage of brands, we understand the business realities that preclude many marketers from adhering to it. We understand that, quite frequently, it’s an either-or situation or a situation where the majority of a brand’s budget needs to be devoted to moving product now.

Instead, this is an argument for applying branding principals to short-term selling activity—for approaching tactics in a branded way.The recession has brought the need for this smarter approach to the fore, and it will require an evolution in marketing.

Tactics can no longer be divorced from larger brand-building efforts. Branded tactics— especially those having to do with price and value—need to become as important as brand strategy.

The challenge for brand owners is to develop branding skills in what for the most part has been an unbranded arena. They must find their “value voice” so that promotions have brand- building effects, leaving a brand in a better rather than worse place. And everything, including sales tactics, must be seen as a part of brand strategy. Without developing these skills, brands will become more generic at a time when their unique qualities are most essential.

Admittedly, this is far easier for some than others, especially those that had price-driven brand strategies well before the recession. It comes naturally to brands like U.K. retailer John Lewis, which promises that it’s “Never knowingly undersold,” or Wal-Mart, with its theme “Save money. Live better.” But what if you’re not John Lewis or Wal-Mart? What then?

Find your value voice.You can’t just simply tout price,or you’ll sound like everyone else. Understanding how your brand should speak about price and value is absolutely critical. Exploit your unique voice to talk about price.

•Since 1988, when Charlton Heston was on hand to open one of the twice-yearly sales at Harrods in London, a parade of celebrities from Brooke Shields to Christina Aguilera to Eva Longoria has followed. These stars arrive in a horse-drawn carriage, get a tour of the store accompanied by owner Mohamed Al-Fayed and address the hoards of shoppers lined up outside.With pomp and circumstance, Harrods has turned what could be just another sale into an occasion befitting its upscale image.

•Target’s “Brand new day” TV commercials, which showed cool-looking people actually enjoying various recession-era lifestyle compromises (e.g., “the new vacation glow: self-tanner, $9.39,” “the new nightclub: Wii dance game, $69.99”), were right in line with the brand’s established “cheap chic,”“more-or-less” sensibility while touting specific prices for the first time.

•In Sainsbury’s award-winning “Try something new today”campaign, which has been running in the U.K. for several years,TV chef Jamie Oliver encourages shoppers to experiment with new ingredients by demonstrating simple recipes. Since 2008, Oliver has been showing shoppers how they can feed their family for just £5. The ads reflect the changing times while remaining true to the brand’s core value of encouraging experimentation.

Find creative ways to talk about price. This is the moment for brands to provide consumers with choices (in how they pay, how much they pay,when they pay,etc.), making them feel they have some control.

•Casas Bahia, Brazil’s largest retailer and advertiser, built its empire on a business model that provides credit to low-end consumers, who have been able to acquire fridges, stoves, furniture, etc. through monthly installments. One key factor in attracting these consumers has been to make clear that the company is open to negotiating the payment plan and doing all it can to ensure the monthly installment fits the household budget. In one campaign, Casas Bahia actually asked consumers, “How much are you willing to pay?”in an attempt to provide the comfort that comes from being able to choose the most suitable payment plan.

•“Pay what you want” has been used by a number of marketers as a novel way to attract buzz and engender goodwill by making patrons feel empowered. In February, Singapore’s new Ibis hotel ran a promotion via the site paywhatyouwant.com.sg, where guests could name their price for a room during a brief window each day. A handful of restaurants around the world have also picked up on the idea. Little Bay in London, for example, ran a “pay what you think it’s worth” promotion during February, and at the Taverne Crescent restaurant in Montreal, “pay what you want” is in effect during lunch on weekdays.

•While many retailers discontinued their layaway service in recent years, amid a decline in use thanks to credit-card-happy consumers, Kmart remained committed to it. Last holiday season, the retailer leveraged this in a series of ads that used its Mr. Blue Light animated light bulb to tout the layaway service as an affordable way to buy gifts.Others have followed suit, reviving layaway as a more financially sensible alternative to buying on credit.

Remove the risk from price. With anxiety levels high and the future uncertain, people are reluctant to spend—even if they haven’t been directly impacted by the recession. This is especially true of higher-ticket items or long-term financial commitments. While your product or service may be the same price as it was before the recession,you can sell some peace of mind by taking risk out of the equation.

•The originator of the movement to provide certainty in uncertain times, Hyundai Motor America launched a program in January that assured customers that “ if you lose your income in the next year, we’ll let you return your car.” In a press release announcing the program, acting president and CEO John Krafcik said,“ Ten years ago, Hyundai’s industry-leading warranty provided peace of mind to consumers about Hyundai’s quality and reliability. Today we’re extending that peace of mind to cover consumers’ employment status and personal finances.”

•Telefonica in Spain is promoting rebates for people who have lost their jobs—an offer that’s less about increasing penetration than about crafting an image as a caring company.

•AIG Israel is selling mortgage insurance for people afraid they’ll lose their job after taking on a mortgage. If the fear is realized, AIG will pay the person’s mortgage for up to a year. It’s a way to sell security to consumers afraid of long-term financial commitments—and, for a brand that’s facing serious challenges, a way to attract consumer attention.

Don’t mention price. If you want your product to be seen as valuable, avoid mentioning price. An increasing number of brands are latching onto the “more for less” message—and it’s fast becoming trite. Make your message different by stating it in a new, refreshing way—without talking price—that is aligned with your brand. Allow consumers to connect the dots.

•With its current iteration of “Happy Jetting, ”JetBlue subtly communicates “more for less” by telling “bigwigs, muckety-mucks and big cheeses” how “jetting on JetBlue is a lot like on your private jet, with a few basic differences.” A section on the airline’s Web site describes features such as lots of leg room, DirectTV, free snacks and “fares that won’t give the CFO a conniption.”The work is perfectly aligned with JetBlue’s distinctly un-stuffy, anti-stodgy airline brand.

•OMO, a leading washing-powder brand in the premium segment in China, is positioned as cleaning more types of stains than competitors—99 types of stains, as its advertising claims. Heightened consumer sensitivity to price recently prompted the brand to further justify its cost. Without relinquishing any of its premium creds, current advertising tells housewives that OMO is a good value because it cleans twice the amount of clothing with the same amount of powder.

While it may be difficult in a climate dominated with price and value messaging, it’s imperative to make branded tactics as important as brand strategy. It’s a matter of long-term thinking: Brands must be sensitive to consumers’ changed priorities but nevertheless maintain their uniqueness. Brands that successfully accomplish this will not only retain customers during these lean times but remain relevant once the economy picks up again.

METHODOLOGY
This is the 16th installment of the JWT AnxietyIndex. It was fielded in February and March 2009, using SONAR, JWT’s proprietary online research tool.The online survey polled 1,065 American adults,1,004 Britons, 992 Canadians, 983 Australians,500 Brazilians, 500 Japanese, 205 Russians and 203 Spaniards. Data was weighted by age, gender and household income based on government population statistics.

Sponsored By: The Brand Positioning Workshop

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1 Comment

Eric Tsai on June 14th, 2009 said

Another great post guys, there is no doubt that brands will require an evolution in marketing. However, the evolution is taken place in two fronts: one is what’s mentioned here – the market itself, the environment in which consumers are shifting their taste with perception; and the other one is technology and how brands engage with their customers.

The advancement of social media has given some brands advantages in creating meaningful dialogues with their customers. While it’s not essential, you can see clearly how companies like Zappos and Dell are benefiting from Social Media tools like twitter, while Nike and Microsoft have not yet incorporated them in their overall brand strategy.

Another key is “innovation.” The ability to innovate, to be creative and willing to make mistakes with branding tactics will drive brands away from price focus to value focus. Innovation is especially crucial at times like this, don’t just keep doing what works but try new things, think outside the box. The price war can only go so far as an incentive not the main strategic driver – even Apple after the announcement of iPhone 3GS at WWDC has lowered most of its retail pricing on products like iPhone and MacBook but I personally don’t think it will hurt their brand equity bottom line.

In fact, it may help to leave the success they had behind and refocus on what’s ahead. It is by focusing on long-term value and investing in their customers that allows Apple to continue to be innovative. Customer retention is not a tactic, it should be considered as a brand strategy.

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