When the Earth moves




              Staying alive in a new brand landscape
Back to the Seventies...
• 1973: OPEC quadruples oil prices
• 1974: Miners‟ strike, power cuts, three day week
• July 1973...
Biggest selling single of the year...?
Meanwhile...in a hall in Manchester...
...an earthquake happened
33 years later
• Relentless bad news?
• Initial exposure to bad
  debts in banking sector
  leads to vast loss of
  confid...
The result..?


                                           £0
                                                            ...
The only story they‟ll write about this period?
"I was asked what I thought about the recession.
   I thought about it and decided not to take part."

         Sam Walton...
“There are masses of opportunities in times of recession.
         It‟s when the greatest fortunes get made...
       if y...
„Flanked by models and fashionistas, the retail billionaire Sir Philip
Green was on pleasingly combative form at the openi...
Disaster?
Or opportunity...?
“Change will not come if we wait for some
     other person or some other time.
  We are the ones we‟ve been waiting for.
...
Advertising works in a recession
   Advertising is vital in a recession
Out of sight can mean out of business...
The Evidence

• Arguments are already becoming well rehearsed...
• 1930s...P&G piloted the soap opera - highly innovative
...
The Evidence
• 1991-92 study of 127 UK brands in 46 product categories2:
   – Highest performing brands increased adspend ...
The Evidence

• And we know...
   – That Renault increased market share in early 90s
     recession with Papa/Nicole campa...
The Evidence
• Up to date evidence is already emerging...
• Nielsen 2009 US study shows that financial brands which are
  ...
The Evidence
• 98% of Finance Directors working for firms of 1000+
  employees support increased marketing spend now6
The Evidence

So why...with some exceptions...isn‟t it happening?
                Because of fear..?
The Evidence


• Because theory is one thing...
  ...practice another
• Margins for error much reduced...
   – Big budgets...
So how?
By focusing on two things
Connection when the earth moves
• Success lies
   – In a truth of your brand occupying the same emotional space as a
     ...
Connection when the earth moves




Then communicate distinctively, clearly, visibly
Think of it as Market Seismology
Market Seismology
• Brand and customer in harmony
• Healthy business, strong relationship
Market Seismology
Over time...gradual changes in
relationship are inevitable...

Markets develop, technologies
arrive, com...
Market Seismology

And then...
Earthquake hits...
Customer reorders truths,
radically, rapidly...

„New‟ need no longer ad...
Market Seismology




“Brand liquefaction”
Market Seismology

Liquefied...
Market Seismology


...and now...
Market Seismology

Feeling the shaking...
Market Seismology


Rebuilding the foundations
means adjusting to a
changed market.



Sinking foundations into the
new so...
Market Seismology: M&S Food

M&S Food
• Symbolic of growth in disposable incomes in
  1990s/early 2000s...
   – Its truths...
Market Seismology: M&S Food

• Some truths about their customers now?
   – Nervousness about the future?
   – Harder to ju...
Market Seismology: Axa

Axa
• Until 2007, positioned around „Be Life Confident‟
   – Achieve your plans/dreams etc
• Finan...
Market Seismology: Axa

   – Understanding that as insurance company this was part of
     DNA of brand...
      • Insuran...
Axa Commercial 2008
Market Seismology: Axa

• From Axa website...
  “We launched our new Global Vision called „Redefining Standards‟
  because...
Market Seismology: Barclaycard
Barclaycard
• 1991 – brand makes its first loss
• Economy plunging, new competitors enterin...
Market Seismology: Barclaycard
• Industry orthodoxy – promote, financially incentivise, cut A&P
  budgets
• Barclaycard‟s ...
Market Seismology: Barclaycard

• Result?
  – Barclaycard took market leadership from Access
  – Access cut spend, avoided...
Market Seismology: Weak Foundations



From others...?
Responses to a changed world seem less convincing...
Market Seismology: Weak Foundations?
• Lowering the lifeboats...
   – Discounting: retailers‟ weapon
     of choice...
• R...
Market Seismology: Weak Foundations
                                                 • American Airlines
                 ...
Market Seismology: Weak Foundations?
•   And the „apology‟ campaign by
    The Standard?
•   Solving the wrong problem?
  ...
Market Seismology: Weak Foundations


• Others seem caught in the headlights...
   – Car Industry (paralysis)
   – Banking...
Market Seismology: A new landscape

             • For some, the shifting earth
               brings new windfall
       ...
Market Seismology: A new landscape
• The Economist - sales increase Jun-Dec 2008: 2.4%
• Match.com - 26% y/y membership in...
Market Seismology: A new landscape

• In this new territory, connections may not yet be fully made...
• A need to make the...
Market Seismology: A new landscape

               • For these brands – issue is
                 now how to cement
      ...
Market Seismology: A new landscape
               • And for others?
                 For whom the „happy chance‟
         ...
When the ground shifts
•   There are conversations to be had – now as ever, because
               Recession is no more th...
When the ground shifts



...take your brand to pieces
                 look inside
When the ground shifts


...take the mind of your
   customer to pieces...
             look inside
Connection when the earth moves
...do this...


                The new truth of
                    my brand
            ...
Or...
...there is another way...
Cause the next
                               earthquake yourself...




and wait for them to come...
change    based on   truth
qualitative research - idea generation - creative consultancy – brand planning




            ...
References

1.   McGraw-Hill Research www.machtech.com/adsales/recession_marketing/
2.   The Billett Consultancy
3.   Pent...
Brand Seismology: Staying Alive in a new brand landscape
Brand Seismology: Staying Alive in a new brand landscape
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Brand Seismology: Staying Alive in a new brand landscape

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Different River looks at the implications of the recession for brands...and sees a way foward based around continuing to understand the truth of people's needs and of what they can offer.

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Brand Seismology: Staying Alive in a new brand landscape

  1. 1. When the Earth moves Staying alive in a new brand landscape
  2. 2. Back to the Seventies... • 1973: OPEC quadruples oil prices • 1974: Miners‟ strike, power cuts, three day week • July 1973-Sept 1975, UK economy in recession in five out of nine quarters
  3. 3. Biggest selling single of the year...?
  4. 4. Meanwhile...in a hall in Manchester...
  5. 5. ...an earthquake happened
  6. 6. 33 years later • Relentless bad news? • Initial exposure to bad debts in banking sector leads to vast loss of confidence • Financial markets, and much of business world, in hands of executives who have only ever known growth... • World turned upside down?
  7. 7. The result..? £0 £150,000 £200,000 £50,000 £100,000 1999 Q1 1999 Q3 2000 Q1 2000 Q3 2001 Q1 2001 Q3 2002 Q1 2002 Q3 2003 Q1 2003 Q3 2004 Q1 2004 Q3 2005 Q1 2005 Q3 (Source: Nationwide) 2006 Q1 2006 Q3 Average House Prices 1999-2009 2007 Q1 2007 Q3 2008 Q1 2008 Q3 2009 Q1 33 years later
  8. 8. The only story they‟ll write about this period?
  9. 9. "I was asked what I thought about the recession. I thought about it and decided not to take part." Sam Walton, Founder of Wal-Mart
  10. 10. “There are masses of opportunities in times of recession. It‟s when the greatest fortunes get made... if you‟re in a position to have a great idea and fund that idea you can do enormously well.” Sir Richard Branson February 2009
  11. 11. „Flanked by models and fashionistas, the retail billionaire Sir Philip Green was on pleasingly combative form at the opening of the New York outpost of Topshop this week. Having waited in line for 45 minutes to speak to the great man, I had the chance to lob a few questions in his direction, largely about the wisdom of opening a $24m superstore in the middle of an economic downturn. "We've put a massive investment in this store. America wants us to invest again and we're happy to do it," Green told me. Britain's ninth richest man soon got bored of this line of questioning, though, and snapped: "Go and take a picture of the people queuing up outside the store. Put that in the fucking Guardian. You're all so bloody miserable.” ‟ The Guardian April 3rd 2009
  12. 12. Disaster? Or opportunity...?
  13. 13. “Change will not come if we wait for some other person or some other time. We are the ones we‟ve been waiting for. We are the change that we seek” Barack Obama
  14. 14. Advertising works in a recession Advertising is vital in a recession Out of sight can mean out of business...
  15. 15. The Evidence • Arguments are already becoming well rehearsed... • 1930s...P&G piloted the soap opera - highly innovative marketing • 1939-45 : brands that continued to advertise even when unavailable dominated post war/post rationing markets • Early 1980s recession – study of 600 US companies saw those who sustained/increased ad budgets showing average 256% increase in sales vs others by 19851
  16. 16. The Evidence • 1991-92 study of 127 UK brands in 46 product categories2: – Highest performing brands increased adspend by 7% (and saw average 1.1% share growth) – Lowest performers – cut adspend by 8%, saw share decline of 1.6% – “When times are good you should advertise. When times are bad, 3 you must advertise” • 2002, US study of 3500 companies, post 9/11: – Maintainers/increasers of marketing activity achieved share increases averaging twice the size of those cutting budgets4
  17. 17. The Evidence • And we know... – That Renault increased market share in early 90s recession with Papa/Nicole campaign and increased spend – That market positions change most in recessions • “Like the positions in a race change at the corners”5 – That recessions depress media costs • SOV easier to achieve and works harder...
  18. 18. The Evidence • Up to date evidence is already emerging... • Nielsen 2009 US study shows that financial brands which are increasing ad spend are much better able to maintain confidence
  19. 19. The Evidence • 98% of Finance Directors working for firms of 1000+ employees support increased marketing spend now6
  20. 20. The Evidence So why...with some exceptions...isn‟t it happening? Because of fear..?
  21. 21. The Evidence • Because theory is one thing... ...practice another • Margins for error much reduced... – Big budgets won‟t come to the rescue • And an insecurity about how to communicate effectively ...now the chips are down...
  22. 22. So how? By focusing on two things
  23. 23. Connection when the earth moves • Success lies – In a truth of your brand occupying the same emotional space as a truth of the consumer • Your brand potentially has a number of powerful, useful truths built into its identity...ripe for re/discovery • Do you know what they are? – In recognising that customers have in many markets reordered their truths • To create a new synchronicity... The new truth of my brand The reordered truths of my customers
  24. 24. Connection when the earth moves Then communicate distinctively, clearly, visibly
  25. 25. Think of it as Market Seismology
  26. 26. Market Seismology • Brand and customer in harmony • Healthy business, strong relationship
  27. 27. Market Seismology Over time...gradual changes in relationship are inevitable... Markets develop, technologies arrive, competitors act „Fault creep‟ But smart companies keep pace via on going research etc...and continue to sustain dialogue/ relationship
  28. 28. Market Seismology And then... Earthquake hits... Customer reorders truths, radically, rapidly... „New‟ need no longer addressed by brand... Connection fractured...
  29. 29. Market Seismology “Brand liquefaction”
  30. 30. Market Seismology Liquefied...
  31. 31. Market Seismology ...and now...
  32. 32. Market Seismology Feeling the shaking...
  33. 33. Market Seismology Rebuilding the foundations means adjusting to a changed market. Sinking foundations into the new solid ground
  34. 34. Market Seismology: M&S Food M&S Food • Symbolic of growth in disposable incomes in 1990s/early 2000s... – Its truths... • Expensive • High Quality • Occasional • Truths of its customers? • A sense of affluence and entitlement • Personal indulgence a driver • Outer directedness
  35. 35. Market Seismology: M&S Food • Some truths about their customers now? – Nervousness about the future? – Harder to justify indulgent grocery buying? – Still enjoy quality food. • M&S authentically reframes the truth of quality. – Change the terms of reference... • Positioning as alternative to going out (“Dine In” promotion) • Remains true to M&S brand, recognisable • Reflects reprioritised needs of customer
  36. 36. Market Seismology: Axa Axa • Until 2007, positioned around „Be Life Confident‟ – Achieve your plans/dreams etc • Financial market catastrophe in 2008 changed everything • New thinking that involved: – Understanding customer change • Loss of trust in banks, anger, disillusionment, betrayal • A deep need for security and reassurance...
  37. 37. Market Seismology: Axa – Understanding that as insurance company this was part of DNA of brand... • Insurance should be about being on the side of the insured when times are hard – The accident/death etc – The worldwide financial disaster • Axa returns to the truth of protection
  38. 38. Axa Commercial 2008
  39. 39. Market Seismology: Axa • From Axa website... “We launched our new Global Vision called „Redefining Standards‟ because we realised that without your trust, we are nothing, and that trust demands that we do things that prove we are worth trusting. Too many standards in finance and insurance are sub standard: standards that suit everyone else except you: standards that certainly wouldn‟t make you trust anyone: and some quite the opposite. So we decided to „do‟ something about them. Having begun this journey to a better place, it made sense to invite you to come with us”.
  40. 40. Market Seismology: Barclaycard Barclaycard • 1991 – brand makes its first loss • Economy plunging, new competitors entering • Consumer truths of 1980s – Credit boom, self indulgence, have it now pay tomorrow (or ever) – Secure, „loadsamoney‟, „I‟m worth it‟ etc • By 1991 truth reordering underway – Uncertainties about the future – Debt/negative equity concerns – More financial risk aversion
  41. 41. Market Seismology: Barclaycard • Industry orthodoxy – promote, financially incentivise, cut A&P budgets • Barclaycard‟s response? – Added £8 pa charge – Plus 100 day purchase cover – Plus international travel assistance • These features spoke to the prevailing mentality • Barclaycard developed its truth of security and trust – Understood that discounting/offer based marketing – Or cutting budgets ...would not speak most usefully and successfully to the need • Brand doubled adspend
  42. 42. Market Seismology: Barclaycard • Result? – Barclaycard took market leadership from Access – Access cut spend, avoided addition of new benefits (but added the fee)... – ...Access brand sold to Mastercard 1996
  43. 43. Market Seismology: Weak Foundations From others...? Responses to a changed world seem less convincing...
  44. 44. Market Seismology: Weak Foundations? • Lowering the lifeboats... – Discounting: retailers‟ weapon of choice... • Responding to new world of high price sensitivity (which they partly stimulated)... – Supermarket price wars – Identical strategy from many • But loyalty/engagement? – Shopping trips become multi store...price becomes only differentiator – Margin sacrificed, over and over
  45. 45. Market Seismology: Weak Foundations • American Airlines • Investment...yes • But in the generic campaign? – Category benefits “We are currently operating in a • Product still lags behind BA, particularly competitive environment Virgin, Singapore Airlines and it is important for us to invest in et al promotional activity to drive continued • Without product lead, consideration of the American Airlines where‟s the insight? brand by discerning UK travellers.” Maria Sebastian • “We know why you fly?” President Sales and Marketing EMEA. – Do you?
  46. 46. Market Seismology: Weak Foundations? • And the „apology‟ campaign by The Standard? • Solving the wrong problem? – Consumer reordering moving away from print medium... – Recessionary pressures have accelerated this • Most pressure on paid print medium...without a compelling/ unique benefit. • But an attempt to re-explore other latent truths of the brand for a new age...? – Campaigning, rallying point for London • Jury is not yet in... still less out!
  47. 47. Market Seismology: Weak Foundations • Others seem caught in the headlights... – Car Industry (paralysis) – Banking (denial) – Building industry (temporary death) • But for others still, a new landscape...
  48. 48. Market Seismology: A new landscape • For some, the shifting earth brings new windfall opportunities • Fewer driven away? • And - by „happy chance‟ - new audiences suddenly exploring the brand, as reordering brings it into view
  49. 49. Market Seismology: A new landscape • The Economist - sales increase Jun-Dec 2008: 2.4% • Match.com - 26% y/y membership increase • LoveFilm reporting 40% membership increase in recent months • McDonalds, KFC, Burger King all benefitting from shifts in priorities/behaviour and growing • Confectionery industry posting impressive results • Timpson – shoe repairs showing huge growth • „Dinner party foods‟, wine, selling well – Home cooking ingredients too...(pasta/rise up 20.8% year to Mar 08 etc) • Garden centres/garden products performing very well... – Wyevale garden centres 50% growth, Homebase gardening products up 85%
  50. 50. Market Seismology: A new landscape • In this new territory, connections may not yet be fully made... • A need to make the brand part of the new buyer‟s life before... – The earth shifts again...or slides out of recession • With new customers knowing no reason to stay when their truths are reordered once more – Someone else in their new world does it instead • Your competition...
  51. 51. Market Seismology: A new landscape • For these brands – issue is now how to cement loyalty...how to bond... • It‟s about 2010/2011 now... • Is it happening? – Mixed signals
  52. 52. Market Seismology: A new landscape • And for others? For whom the „happy chance‟ isn‟t so evident? – The challenge...opportunity... – Find the new customer...and/or the new „fit‟ – Is there a truth of your brand ready to draw a new customer to you...? • Are they waiting to hear from you?
  53. 53. When the ground shifts • There are conversations to be had – now as ever, because Recession is no more than change • Some human truths return to the top of the agenda..? – Security – Hope – Real value (not simply price) • Genuineness – in performance and promise – P&G‟s „Performance -based value messaging‟ – Meaning – less time and money to waste on the pointless – An end to waste – synchronous with green agenda – Renewed exploration of what makes us happy – Authenticity and honesty...
  54. 54. When the ground shifts ...take your brand to pieces look inside
  55. 55. When the ground shifts ...take the mind of your customer to pieces... look inside
  56. 56. Connection when the earth moves ...do this... The new truth of my brand The reordered truths of my customers ...and we can help you do it
  57. 57. Or... ...there is another way...
  58. 58. Cause the next earthquake yourself... and wait for them to come...
  59. 59. change based on truth qualitative research - idea generation - creative consultancy – brand planning Jo Shaw 07917 194535 jo@differentriver.co.uk Vikki McKeegan 07831 278530 victoria@differentriver.co.uk www.differentriver.co.uk
  60. 60. References 1. McGraw-Hill Research www.machtech.com/adsales/recession_marketing/ 2. The Billett Consultancy 3. Penton Research Services, Cooper & Lybrand, Business Science International study 4. PIMS/Paul Dyson www.warc.com 5. Sarah Carter, DDB „How to get your brand heard in a recession and boost your ROI‟ Admap Jan 09 6. KDB, Media Week March 25 09
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