Managing your
brand in a
recession
25th March 2009
1 |
Philip Stevenson
2 |
3 |
Today
Changing consumer demand
Losers and Winners
(or the relatively unscathed)
Tips in a downturn
4 |
Financial crisis
Energy crisis
Raw materials crisis
Food crisis
Consumer confidence
crisis
*
5 |
“In a crises, you can
downsize, right size,
focus and outsource, but,
you can't fire the brand.”
Anonymous
6 |
“Instead, brands need
to become more
effective and efficient,
in order to not only
survive, but win”
Interbrand
7 |
Your weapon?
Brand.
Why?
It drives choice.
8 |
Influencing choice through customer
perceptions = Economic value
Brand
Positioning
Touch
points
Brand
Perception
Decision
Criteria
…consistently
…Raising awareness of
…making the
compelling brand
brought to life
your differentiation and
case for your
positioning…
through everything
emotional relevance…
brand over other
A clear and
you say and do…
alternatives ,
influencing choice…
9
Behaviour
…which leads to price
premiums,
loyalty and advocacy…
Sales &
Profit
impact
…this increased
demand leads to
financial benefits…
Economic
Value
…that creates brand
and shareholder
value…
If managed correctly brand can
drive long term economic value
Annual Average Return
Standard Deviation
Sharpe Ratio
BGB Portfolio
MSCI World
S&P 500
4.73%
0.05%
-0.92%
14.76%
18.02%
15.36%
0.07
0.00
-0.06
Back to the real world for a
minute
Excellent coffee
Unbranded
11 |
Same flavour
Higher price
More preferred
…but that behaviour is now
changing
Same flavour
Higher price
More preferred
Similar flavour
Lower price
No less preferred
-50%
-1,000 outlets
12 |
+14%
+1,000 outlets
Today
Changing consumer demand
Losers and Winners
(or the relatively unscathed)
Actions in a downturn
13 |
Shopper’s world is in turmoil
14 |
Spending patterns are shifting
Delay
Stop
Reduce
Switch
Household durables (e.g., electronics,
appliances, and furniture)
Travel (e.g. airlines, resorts, casinos,
holiday companies)
Personal durables (e.g. clothing)
Indulgences (e.g. premium coffee)
Leisure services (e.g. Dining out, salon
treatments)
Household cleaning products
Groceries
(Booz & Company September 2008: 1,000 households )
15 |
Brands that have
fostered a sense of
allegiance with their
consumers are more
likely to withstand an
economic downturn.
16 |
Today
Changing consumer demand
Losers and Winners
(and the relatively unscathed)
Tips in a downturn
17 |
Worst effected
18 |
Worst effected
Luxury goods
Home furnishings
Personal care
Electronics
Holidays
19 |
Less effected
CDS spread < 50
• Hershey
• Nestle
• Coca-Cola
• Kellogg's
• McDonalds
20 |
Winners
Bird's custard +20%
Fray Bentos +41%
Vimto +11%
Board games +200%.
(Source: Guardian March
2009: Figures relate to Asda
sales)
21
Winners
Where can you
get a lobster for a
fiver?
The answer is
Lidl.
Mary Morgan, Corporate Lawyer,
Clapham
22
Today
Point of View on changing
consumer demand
Losers and Winners
(and the relatively unscathed)
Tips in a downturn
23 |
1) Know your consumers
Crash Dieters
Scrimpers
Justifiers
Ostriches
Treaters
Abstainers
Clothcutters
Vultures
Source: “Reacting to Recession” M&C Saatchi July 2008
24 |
2) Adapt to the value equation
Value =
25
Price
Attributes + other costs
3) Don’t abandon long term
strategy
1981-1987
155% growth
$1.4 bn
Reebok #1
26
3) Don’t abandon long term
strategy
1990 - Trebled marketing
investment
1991
900% profit increase
$3 bn
Nike #1
27
4) Create and communicate
differentiation
Be engaging
Reinforce
differentiation
Build value back
into the brand
Don’t price it out
28
5) Build value in, don’t price it out
Build value
proposition from
the core brand
proposition
Manage the
balance between
Quality and Value
Drive value from
the heart of the
brand.
29
6) Make it personal
Less personal =
Less loyal
Customers need
to identify with
the brand
Become
indispensible
30
7) Defend against own label
31
7) Defend against own label
Differentiate on a
visceral level
Leverage the brand
personality
Elevate from a
rational decision
Focus on tangible
POD
Resist making price
dominant message
32
7) Defend against own label
Differentiate on a
visceral level
Leverage the brand
personality
Elevate from a
rational decision
Focus on tangible
POD
Resist making price
dominant message
33
7) Defend against own label
Differentiate on a
visceral level
Leverage the brand
personality
Elevate from a
rational decision
Focus on tangible
POD
Resist making price
dominant message
34
7) Defend against own label
Differentiate on a
visceral level
Leverage the brand
personality
Elevate from a
rational decision
Focus on tangible
POD
Resist making price
dominant message
35
8) Know your retailer – ‘partnership’
How does my brand
help your brand?
What journey do
shoppers of my brand
take through your
store?
How can my brand help
drive value based on
your brand proposition?
Give ideas for
customising your
promotions in our
category in this time
36
So, to conclude…
37 |
Thank you