Recession-proof branding – Part 1
This is the first of 2 posts on “recession-proof branding”, based on interviews with 20 marketing directors from top companies across different sectors and markets. A pdf version of the findings can be downloaded here: Brandgym Newsletter – Recession-proof Branding.
We’re also thrilled to be talking on this topic in the opening speech of the Marketing Society Annual Conference in London on 25th November. Definitely an event worth attending, with a line-up of stellar speakers including the CMOs of McDonald's and Unilever, and the CEO of Virgin Gallactic, the space tourism company.
The challenge for marketing
Forget whether we’re technically in a recession: it sure as hell feels like we’re in one. Consumer confidence is at its lowest for almost 20 years. Food and fuel costs have sky-rocketed. And the stock market is in free-fall. Our view is that these tough times will provoke a “Darwinian” evolution for brands. The fittest, best managed brands will survive, and may even thrive. However, weak brands will decline and maybe even die.
How best to respond to this challenge?
This first post looks at the need to fix the fundamentals, and how the current conditions are forcing teams to become much more business-savvy and bottom-line focused. The second post later in the weeks looks at getting more bang for your buck, and imperative for all teams as budgets come under pressure.
1. Follow the money
Our favourite brandgym motto is "follow the money”, and it’s more relevant than ever today. It means cutting the bull**** and buzzwords, and being much more business savvy. Being crystal clear about which growth drivers marketing activity will focus on, such as increasing trial or weight of purchase. It also requires more rigour than before in assessing the effectiveness of marketing activities once they are in market.
Interestingly, several of the marketing directors we interviewed were building a team of in-house experts working on measuring return-on-investment (ROI), rather than relying on their advertising or media agency to do this for them.
2. Sharpen your vision
In today’s tough time you need a razor-sharp brand positioning and crystal clear portrait of your target consumer to have a much better chance of cutting through the clutter of price-cutting messages.
Smart brands are sticking to their vision, but adapting their execution in line with the needs of consumers to save money. A good example is UK supermarket Sainsbury’s campaign called “Feed you family for a fiver”, in line with the brand idea of “Try something new today”.
3. Cut costs, not corners
Creativity needs applying not only to fancy ads but also protecting profit margins. The risk highlighted by our marketing directors was reducing quality, a sure-fire recipe for long-term failure. A smarter solution is to cut costs without cutting corners. For example, Hellmann’s mayonnaise in Canada moved from a glass to plastic jar, making valuable savings in raw material and manufacturing costs. The new jar was also liked by families, as the pack was un-breakable.
4. Kill the dwarves
Tough times are forcing more ruthless focus. It’s time to kill the "dwarves”, cute but small new products that eat up valuable time and resources; or at the minimum cut their marketing support so they die a natural death. Budgets and people can then be focused on driving growth of "hero" products that drive i) significant business growth and ii) desired changes in brand image.
A previous post looked at innocent as an example. Do their new Veg Pots have potential to become a hero extension? Or, as we fear, are they doomed to be dwarves?
5. Grow the core
All the marketing directors we talked to shared the view that today's tough times made growing the core an imperative. In most cases this core business is both the most profitable, and the one where the brand has the most authority, and so the best ability to defend itself from attack.
For example, Dove’s original cleansing bar still accounts for a large chunk of the brand's sales, and even more of the profit. By investing in direct marketing, product upgrades and advertising Dove's share of the key US bar market has been boosted from 20 to 25%.
The next post later this week will look at ways to get more bang for your branding buck.