Braving the Budget Blues
Times are a little challenging, there’s no escaping it. And as anyone in the brand building industry knows, the moment recessionary measures hit the boardroom agenda, marketing budgets are the first to feel the bite. So, if you’re under pressure, what are the hard decisions you should be making to make your brands work harder and smarter?
Firstly, think about how consumers (all of us, really) are feeling. While we may not be in a recession yet, it certainly feels like it. Plummeting stock and property markets, soaring food costs and inflation figures; the reality is that for most of us it’s feeling pretty scary out there.
We know that recessions increase consumer uncertainty and that uncertainty often results in people re-evaluating their past and current behaviour.
We might stop using a certain brand or even a whole category, cutting out non-essentials like those extra golf lessons or the latest PSP games. We might use brands on fewer occasions. We’re likely to become even more loyal to our favourite brands because they feel reassuring. Research shows that in tougher times consumers often migrate to big, well know trusted brands, feeling safer about making choosing an established market leader.
On the flip side, some consumers rebel against the pressure and feel that they need to be more adventurous, seeking out brands that make them feel special or better about what’s happening around them. Others become less discerning and down-trade to cheaper brands, constantly on the lookout for more specials or that elusive bargain.
With this in mind, how can marketers get the most out of their budget?
Do: Go back to basics. Drive conversations with consumers around what made your brand famous in the first place. It’s interesting to see that two of SA’s biggest brands, a top retailer and a major financial institution, are both really talking up their heritage and using cues from their older, best-loved advertising campaigns to deliver their “through the good times and the bad” message.
Do: Keep communicating. Research tracking brand performance over time shows that brands that continue to advertise during the slumps show the best growth long term as brand equity is built through having a ‘consistent voice’ over time. But marketers should think about the long term benefits of every activity. Focus on activities that build your core equity, not about short term goals. See this as opportunity to invest in your brand.
Do: Look at ways of adding value into your brand instead of cutting price, like promotions, packs sizes (for bulk as well as accessible indulgence needs) and cross selling. Think about how to offer tangible value. In tough times consumers often choose products that they perceive to be more useful, or deals that make them feel like savvy shoppers. Price cutting will ultimately undermine the long term value of your brand.
Do: Be the bearer of good news. Dial up ‘positive’ messaging into your brand rather than talking about the challenges people are currently facing. You could also consider building more emotional equity into your brand by doing some good for the community or supporting your consumers in some tangible way.
Do: Innovate. Some of the world’s most successful premium brands, like Haagen-Dazs for example, were launched in ‘recessionary environments’. Changing consumer needs also provide a fertile ground for clever brands to challenge traditional norms.
Do: Interrogate your portfolio. Portfolio management should be a bit like managing a sports team, where each player must know exactly what role he has to perform on match day for the team to perform well. Marketers should be sure that each brand in their portfolio has a clearly defined role that is positioned to a clear and compelling consumer need.
Don’t: Say things about your brand that it doesn’t ‘own’. Often when brands get into trouble, or the environment changes, marketers feel the urge to say something new about their brand. This might not be consistent with what the brand currently stands for in the minds of the consumer.
Don’t: Re-position existing brands in your portfolio to take advantages of consumers demanding lower prices. This is a hard position to recover from as it becomes more difficult to take your brand upscale when conditions improve. Remember it is easier to take a brand ‘downscale’ than to take it ‘upscale’.
Don’t: Stop communicating with your customers. It’s the flip side of the “do” above, but it’s worth repeating. This is the time when your customers are most vulnerable. They want to be re-assured that the choice they are making is the right one. It’s the time when marketers should go back to basics and consolidate their brand’s core positioning.
By Eden Lanser, Director, Added Value South Africa