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Marketing In 2009 Canada

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A presentation on marketing forces and responses in Canada in 2009 from Ipsos Reid

A presentation on marketing forces and responses in Canada in 2009 from Ipsos Reid

Published in: Business, News & Politics

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  • 1. What is happening in Canada The Economy and Some Key Trends June 2009 Nobody’s Unpredictable
  • 2. Ipsos Trend Observer 2009 Trend Observer • What motivates Interviews with a global study that consumers today? young “trailblazers” uncovers today’s • What consumer trends and predicts trends should we Interviews with cutting edge experts their evolution into the prepare for in a future. post-crisis world? Trend Analysis Advertising A study in 3 Parts Toward a Re- invented World: Reveals how trends, Traces the Implications coupled with the latest development of trends for our technologies, are from before the current brands changing the way recession, revealing consumers view several their development and of the pillars of our evolution into the society, including the current recessionary economy, community, period and beyond. self-image, and space. 2
  • 3. Agenda Economy How are Marketers responding? How are Consumers responding? Questions / Discussion / Your Experiences/ Anecdotes 3
  • 4. Living in Turbulent Times - Its All About Arrows 4
  • 5. And About … Images 5
  • 6. And, … Headlines 6
  • 7. Communication - The Old World Influencers Investors Family Customers MESSAGES Employees Prospects Competitors Press/Analysts Partners 7
  • 8. Communication - The New World Influencers Investors Family Customers MESSAGES Employees Prospects Competitors Press/Analysts Partners 8
  • 9. The Canadian Economy is in Recession The Canadian economy has fallen victim to the global recession. The recession is expected to run its course in 2009 and the economy will rebound into positive territory in 2010. 6 Real GDP 5 4 3 Annual % Change 2 1 0 Q1'07 Q2'07 Q3'07 Q4'07 Q1'08 Q2'08 Q3'08 Q4'08 2009* 2010* 2011* -1 -2 -3 -4 Source: Statistics Canada (Q1’07 to Q4’08) and *Bank of Canada (2009 to 2011 forecasts) 9
  • 10. Unemployment is Rising Across Canada Unemployment Rate in April 2009 Canada Nfld BC 8.0% Alb 7.4% Sask Man 14.7% 6.0% Ont Que 5.0% 4.6% 8.7% 8.4% PEI NB 12.4% 8.9% NS 9.2% Source: Statistics Canada 10
  • 11. Canadian real estate market hit its lowest level in a decade in January 2009… looks like it is now rebounding Residential Average Price Year-on-Year Percentage Change 9.7 5.7 4.8 4 1.6 0.1 -2.6 -3.2 -4.5 -5.3 -7.7 -8.9 -9.9 -9.8 -11 -11.2 Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- 08 08 08 08 08 08 08 08 08 08 08 08 09 09 09 09 Source: Canadian Real Estate Association (CREA) Canadian Financial Monitor 11
  • 12. Personal bankruptcies have accelerated since the financial meltdown in October 2008 Personal Bankruptcies Year-on-Year % Change 27% 35% 7% 17% 3% 27,542 24,956 22,412 22,776 20,466 Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Source: Office of the Superintendent of Bankruptcy Canada 12 Canadian Financial Monitor
  • 13. The stock market has rallied about 35% from its March low amid speculation of “green shoots” of economic recovery. Nonetheless, whether these are “green shoots” or just “weeds” remains an open question. 16000 S&P/TSX 14000 TSX all time closing 12000 high of 15,073.13 on June 18, 2008 10000 8000 TSX fell 1738.19 6000 TSX hit a 5-year points or 16% in its low of 7566.94 on worst week in 68 years Mar. 9, 2009 4000 Aug-08 Jun-08 Apr-08 Apr-09 Jul-08 Sep-08 Nov-08 Jan-08 Feb-08 Mar-08 May-08 Feb-09 Mar-09 Jan-09 May-09 Oct-08 Dec-08 13
  • 14. How Long Will We Be In This Recession? Duration of Recessions  Since 1870, there have been 255 examples of recession: • 168 lasted for less than one year • 61 lasted 1 - 2 years • 26 lasted for more than 2 years 14 Source: Trajectory
  • 15. Canada’s Top Concerns (March 2009) Thinking about the issues presently facing Canada, which one do you feel should receive the greatest attention from Canada’s leaders? (Percentage of respondents) Economy 51 63 Healthcare/Medicare 6 18 Jobs/Unemployment 7 16 Environment 5 14 Armed forces/Military/Defence 3 11 First mention Education/Schools/Universities 1 8 International war/Conflict 1 6 Total mentions Crime/Justice 2 5 Government/politics 14 Deficit/debt/spending 24 4 15
  • 16. Canada’s Top Concerns – Trends (July 1991 - March 2009) Figures represent “Total Mentions”. Up to two issues were accepted from each respondent, thus percentages will exceed 100. Mar-09 16
  • 17. Assessment of the National Economy Today: May ’09 = 53%...The Turnaround… All Canadians Good Poor 100% 90% 80% 70% 60% 53% 50% 47% 40% 30% 20% 10% 0% Sept/Aug 08 June 08 Jan 01 Aug 03 Feb 04 Feb 05 Feb 06 Jan 08 Feb 08 Feb 03 Sep 04 Sep 05 Aug 07 Aug 08 Jan '09 Jul 96 Jul 00 Apr 07 Oct 01 Apr 03 Apr 08 Mar '09 May 95 May 98 Nov 04 May 02 Nov 02 May 04 May 05 May 08 May 97 May 99 Nov 03 Nov '08 May '09 Jul 94 In terms of the current economic conditions in this country as a whole, how would you describe the overall state of the Canadian economy right now? 17
  • 18. 0% 10% 20% 30% 40% 50% 60% Mar '91 Mar '92 Mar '93 Mar '95 Mar '96 May '97 May '98 May '99 Jul '00 Jul '01 Jul '02 Feb '03 Feb '04 Feb '05 Over the Next Year Improve May '05 All Canadians Sep '05 Feb '06 Nov '06 Apr '07 Aug '07 Get Worse National Outlook for Economy Apr '08 Aug '08 Sept/Oct '08 Nov '08 Jan '09 Mar '09 May '09 18
  • 19. Household Spending - % Cutting Back Change from last wave Total 73% 1% South Korea 88% 1% Mexico 86% 3% Argentina 85% 1% China 81% 1% France 81% 0% Russia 81% 8% India 78% 2% Italy 77% 2% The United States 77% -3% Brazil 77% 1% Turkey 76% -8% Great Britain 75% -2% Australia 74% -1% Japan 73% 0% Spain 72% 4% Canada 68% -2% Poland 67% -1% The Czech Republic 64% 5% Belgium 64% -6% Germany 57% -2% J3. Given the current state of the global economy, have you and your family had to cut back on your household spending recently? 19
  • 20. Specific Cut Backs Average of all countries vs. Canada 76% Entertainment 81% 73% Vacations 79% 72% Luxury items 78% 59% Clothing 61% 53% Energy consumption 61% All Countries 47% Canada Gasoline/driving 60% 41% Groceries 48% 33% Cell Phone 27% 23% Cable TV 25% 11% Education 6% J4. What are the specific things that you and your family are cutting back on these days? Base: respondents who have cut back in J3 20
  • 21. Family Spending on Major Purchases in the Next Year – some signs of recovery? Now, thinking about major purchases such as buying a car or household appliances, or your vacation spending, in the next year, do you expect that you and your family will be spending No data for Aug 2008 or Apr 2007 21
  • 22. Personal Day-to-Day Spending in the Next Year – some signs of recovery? And, thinking only about your personal day-to-day spending habits on things such as groceries, clothing or other personal goods and services, in the next year, do you expect that you and your family will be spending No data for Aug 08 or Apr 07 22
  • 23. Industry Sectors Have Reacted Differently + Sectors YoY Index:  Brewers  Utilities  Food  Personal care  Tobacco - Sectors:  Insurance  Mortgage Finance  Gambling  Automotive  Consumer electronics 23
  • 24. Marketing in A Recession – Voices from the Past What connects these products? Marketing clients All launched in a Recession by … a clue Launched in: First ever Store Label? 1920 Resourceful 1974 Premiumisation 1929 Creating a new category 1982 Industry Joint Venture 24
  • 25. How Are Marketers Responding to This Recession?  Buy a truck and get a car free  Pay what you can / what you think it is worth  Consuming differently • Swap/share (zwaggle.com) • Rental (zipcar.com) The end of supersize Little luxuries 25
  • 26. How Are Marketers Responding to This Recession? Value Reframing Bring your travel mug instead of their paper cups and receive 20 cents off. “Says its hybrid electric water heater ... will save consumers approximately $250 annually. Says that switching to its latest models of water-conserving shower heads, toilets and faucets saves a family of four between $90 and $200". The Stimulus package is a Value Reframing - replace your old product with a new product which will save you money! 26
  • 27. How Are Marketers Responding to This Recession? Value Sizing only use what you need / what is good for you Down count, down size; smaller Right size the product to the package; Compacted so you use it specific need (e.g. Single use) 27
  • 28. How Are Marketers Responding to This Recession? Increasing marketing spending during a recession greatly speeds recovery post-recession. Marketing Spend does not damage ROI significantly in a recession and helps set the platform for strong recovery ROI During Recession (%) Increase in ROI During Recovery (% pts.) 20% 6 5 4.3 15% 4 10% 3 9% 8% 2 0.6 10% 1 0 5% -1 -2 -0.8 0% -3 Cut Maintain Increase Cut Maintain Increase Marketing Spending Marketing Spending Source: Roberts, Keith. What Strategic Investments Should You Make During a Recession to Gain Competitive Advantage in the Recovery , Journal of Strategy & 28 Leadership, Vol. 31, Issue 4
  • 29. How Are Marketers Responding to This Recession? Delivery - In Store Fundamentals  Fundamentals are critical when a recession exists.  Ensure your in-store fundamentals are working: • POS materials • Category line-up • Shelf – location • Return to basics in store! 29
  • 30. How Are Marketers Responding to This Recession? Price Optimization Costs have increased and retailers are demanding more and competing harder. Fully understand price to optimise your profit! The need to try and ensure your product is priced at the right price point for the consumer context and channel. 30
  • 31. How Are Marketers Responding to This Recession? Discounting  Offer Steep Discounts Profits Evaporate  Post Discounts Impacts Sales  What to do? • Generate ideas for discounting things peripheral to your brand rather than your core competency/brand.  Auto makers – financing rather than the vehicle.  Retailers – rather than the product itself free shipping or discount the warranty.  Carbo beverage – regular price for single, adjacent to deal for 36. Preserve the value of your brand while delivering the greater value that consumers want during tough times. 31 Harvard Business Review Jan 19, 2009
  • 32. How Are Marketers Responding to This Recession? SKU & Portfolio Optimization  Range • Do we need all the different skus? Rationalise to increase efficiency • Clear the clutter, non-performing sku’s/ brands 32
  • 33. How Are Marketers Responding to This Recession? Optimize Packaging Improving impact and communication on-shelf will pay back FAST Your products speaks for you at shelf, the consumer connection point. cogn ized! Ge t Re 33
  • 34. How Are Marketers Responding to This Recession? Sustainability  Product & Refills  Fuel Efficiency (Home, Car, Electronics)  Package - neutral carbon footprint  Monitor & Proclaim your contribution  Consumer & Employee Engagement 34
  • 35. How Are Marketers (Retailers) Responding to This Recession? Concentration of Power in Retailing The business of retailing is continuously reinventing itself 35
  • 36. How Are Marketers (Retailers) Responding to This Recession? Control Label Brands 36
  • 37. How Are Marketers (Retailers) Responding to This Recession? Fragmentation and Higher Cost of Communication Video Technology Continues to Change and Expand 1995 2000 2000 2007 2010 TV Distribution TV Distribution TV Distribution •Over-the-air TV •Over-the-air TV •Over-the-air TV •Analog Cable •Analog Cable •Analog Cable •Digital Cable “the right time to be touting •Digital Cable •DTH Satellite Personalization •DTH Satellite •Wireless Cable (MDS) ? •IPTV •VCR •Specialty TV your products is when Personalization •Internet shoppers TV •Specialty are ready to buy.” •VCR Personalization •Pay TV •VCR •Specialty TV •Pay TV •Pay TV •DVD Player •DVD Player •PPV •PPV •PVR •VOD Portable •Video downloads •DVD Player •Video streaming Portable •DVD Player •Digital Video Player •Mobile phone •Laptop computer •Smart phones 37
  • 38. How Are Marketers (Retailers) Responding to This Recession? The Evolution of Shopping  Shopping has evolved from the activity of FULFILLING DEMAND to an opportunity for CREATING DEMAND Why? The aisle is superior to out of store medium in providing access to the target group of users at a critical time. How and when will the evolution be complete? When retail completes its current transformation from distribution channel to a place that stimulates your senses and emotions 38
  • 39. How Are Marketers (Retailers) Responding to This Recession? 39
  • 40. How Are Marketers (Retailers) Responding to This Recession? Partnerships Springboard - CONCIERGE® CONCIERGE® is an interactive touch-screen com puter that transform a shopping cart into a friendly assistant that guests s w t be able to live w on’ ithout. The m ent the cart is put in om m otion, the LCD screen com to life offering help, new es products, how-to-tips, and recipes. 40
  • 41. How Are Marketers (Retailers) Responding to This Recession? Partnerships Springboard - CONCIERGE® …continued  Personal Account Recognition  Product Scanning  Shopping List  Weekly Flyer  Recipes  Product Finder  Targeted Advertising (both location and segment based)  Shopping Cart Tracking 41
  • 42. How Are Marketers (Retailers) Responding to This Recession? Core Benefits  Enrich Customer Relationships  Increase Customer Frequency  Enhance Store Profile  Generate Customer Insight 42
  • 43. How Are Consumers Responding to This Recession? • Choosing different products • Growing use of discounters • Further erosion of Loyalty (both to brands / retail banners) • Premium and Cheap are Winning • Switching to Private Label 43
  • 44. How Are Consumers Responding to This Recession? SHORTER TERM • Taking advantage of deals • Reusability MEDIUM TERM • Seek durability • Less willing to follow the fashion – purchase cycles will get longer 44
  • 45. How Are Consumers Responding to This Recession? • Apprehension of credit – either reluctance or forced • Consumers will buy the central product… but they may do without the peripherals warranty monster cables satellite stand speakers 45
  • 46. How Are Consumers Responding to this Recession? Feb 26, 2009 267,000 references Today 7,210,000 references 46
  • 47. Ipsos Can Help! A Portfolio of Innovation, Brand & Communication Products to Build Your Brand- Today! Inno Evolution Forecasting Brand InnoSpeed – Pack Evolution – Designor – Perceptor Plus – Brand Volume Advertising Idea/concept Packaging forecasting range positioning and brand equity generation optimization with of products Market Landscape – InnoScan – eye-tracking Perceptual map of market to Idea screening module identify white InnoScreen – Line Evolution – space/optimize positioning Concept Line optimization Brand Stretch – screening Price Evolution – Assesses brand extension InnoTrack – Price optimization potential Post-launch Segmentation Toolkit – tracking Best practice segmentation Communications tools ConsumerScape – Next*Idea Brand*Graph – Needs-based seg tool to Brand/Adv Next*TV – Pre- Assessment understand subconscious market Idea and motivations Adv Assessment 47
  • 48. Thank you for your time. June 2009 Nobody’s Unpredictable