Coup in 2006 The soaring oil price Collapse of global economy The rising number of unemployed Airport shut-down The continuation of RED/YELLOW The series of bad news has been bombarding Thais consumers since 2006. Four years of domestic problems have been made worse with bad news from outside like the collapse of the world economy, the so called “hamburger crisis”.
The various sources of this economic crisis has caused uncertainty which led to increased anxiety among consumers. People are panicking, depressed, worried about their situation. Moreover, statistics also show that property crimes have increased during the crisis*. Source: www.anxietyindex.com , www.madconomist.com
Consumers are seeking ways to survive through the economic crisis. According to this study, they are doing what we call the (+) and (–) tactic . The cutting down of what they perceive unnecessary while finding ways to earn extra money.
What they have cut Luxury coffee Carbonated drinks Fashion items Picture printing Eating out Real estate New car
The ripple effect of this economic crisis even reaches temples. A study in a KonKaen temple shows that people visit temples less frequently and now donate less money than ever during the economic crisis. Source: http :// www . phrathai . net / node / 1287
The lipstick effect* that surprised marketers during the 90’s crisis has had no effect this time. Some experts say that it is a proof of a worse than ever economic downturn. Source: http://www.businessthai.co.th/content.php?data=413256_Advertising%20Age *buying little treats, like lipstick, even in a downturn
And they utilize their money more They are more carefully selecting ways of saving by trying to find the best offer giving them better interest or investing their money in the least risky methods like buying government bonds or in the government saving lottery.
More examples of recessionary effects from around the globe
Making lunch box is not longer a female thing anymore It used to be a rare sight to see men making bento for themselves—they preferred cheap and easy convenience store options or restaurant lunch specials . That’s all changing as they try to curtail their spending . Since they don’t want to cut back on their interests and hobbies, young men are finding other ways to save . Alcohol consumption is way down compared with men 5 or 10 years older, and dramatically fewer young men own cars ( once a prerequisite for dating ).
Repair business grows in Philippines In times of difficulty, consumers count their blessings—and count what’s in their closet. Somehow, that old thing can be made new again. Mr. Quickie , the Philippines’ pioneer in shoe repair, is heavily advertising franchise ownership in commuter - friendly channels like the MRT train radio or PA system, touting the franchises as “recession proof . ” And a growing number of small businesses in Manila are offering clothes repair and renewal . Carol, a consumer who is a heavy user of the Alterations Plus retailer, says that adding an updated collar or cool button to a beloved old jacket or dress “makes me feel I have bought a new wardrobe ! ” “ Shoe me the money”
The coupon mom With a personal interest in saving money, now Stephanie Nelson has become a celebrity among moms who are seeking way to survive during the economic crisis. She is the owner of what the media calls “strategic shopping” or how to use coupons to save money on buying things. And now she is sharing her secrets to other moms.
Many brands are struggling during the crisis and all actions that require spending money are often put on hold. Is that a right decision to make? Many experts say no and provide much evidence that brands should continue their spending to increase share of mind and brand strength when others are giving it away.
But hey don’t believe in the experts words just yet since there is some caution that needs to be applied before falling into the too optimistic trap!!! Pepsi wanted to gain back their dollars after the market of carbonated soft drink has been continually decreasing due to the effect of health-conscious trend and the economic recession. They launched a new product, Pepsi Green, with the hope that it will somehow catch peoples attention and consequently help push up their share. Things didn’t work out in the way they expected. Pepsi Green was not only unable to increase share, it was also unable to grab market attention. Source: http :// www . thannews . th . com / detialnews . php?id = M1724121&issue = 2412
However, what the experts say is still right that spending is one of the key successes during a recession. But what really determines the success is the activity the brand chooses to do. One expert says that there are three kinds of brands that can successfully survive during tough times. “ Brands that help people earn money” “ Brands that help people save money” “ Brands that help people access money”
Makro, the hyper-market, is one example of a brand whose activity resonates with the current consumer’s state of mind. It offers consumers large savings with bulk buying. They also focus their effort on food vending category since they predicted that people will take a food vendor career after been laid off. They have proved their theory and now they are expecting a 20% sales increase at the end of this tough year. Unemployment set 1
The blooming of economy mobile phone market has been witnessed for the last few years even before the crisis. However, the competition in this market is getting more fierce after recession hit town. Nokia has launched affordable smart phones like E63 while JayMart, the giant mobile phone distributer, launched its own brand jPhone with a 14 days satisfaction guarantee.
Fighting with house brands, Kleenex, the premium facial tissue brand, is trying harder to maintain their market share during the crisis. They just launched the loyalty campaign with compelling rewards with the hope that people will still buy their brand instead of others.
The soaring of credit card debt in Thailand has inspired Get 102.5 FM, the popular radio channel among office workers to launched the 3 rd Get Credit Card Clean project. The project will clear all the credit card debt for the lucky winner whatever the sum is. And it is so easy to join the program by sending SMS to the provided number and listen to Get 102.5 whether your name is chosen or not. The radio get audiences while the audience get freedom. What a win-win situation.
There were only a few Japanese restaurant chains in Thailand and price per head is about 250 Baht+, at least before the launch of Yayoi, the new age of Japanese chain restaurants that offers affordable price per set (120 Baht including drinks). The opportunity from filling this pricing gap together with the popularity of Japanese foods among Thai people, Yayoi has been easily established in the market and quickly increased the number of meals sold with very little marketing support i.e. only TV Tie-in during the launch.
More examples of brand reaction from global view
The Stop & Shop grocery store During the recession, people are looking for shopping options in an effort to save, for example, they are changing their shopping locations to discount stores and wholesalers. This is why the Stop & Shop now teaches people thriftiness ideas during the economic crisis. They offer “an affordable food summit” in an attempt to help customers lower their grocery bills. They are trying to make sure that people can afford their products and hence do not take their business somewhere else.
The Bailout Bitter beer With government-financed corporate bailouts dominating North American headlines, Howe Sound Brewery in British Columbia is selling an ale it’s calling Bailout Bitter with the slogan “Bitter ale for bitter times.” The beer is usually offered at a lower price than other house brands. People do tend to drown their sorrows in a recession: Alcohol sales are generally resilient in tough times, with people more likely to frequent bars—and some sectors of the alcoholic beverage industry are currently seeing a spike in sales. While there are serious socioeconomic implications to this trend, times of crisis also cry out for humor and a lighthearted view on what’s in the news. By doing just this, as well as offering a much-needed cost incentive, Bailout Bitter helps remind us that things will invariably get better.
Phones and homes for free! With Egypt’s biggest mobile service providers, MobiNil and Vodafone , neck and neck in the market, a new company is trying to gain a foothold with a promotion that some consumers might find hard to resist : Etisalat promises to pay customers’ phone bills every other month for six months . And Palm Hills Developments , one of Egypt’s real estate giants, has come up with an interesting twist on “free” as competition in the real estate market continues to tighten . The offer is “Free Homes” to customers—the catch is that buyers actually pay 80 percent more for a property than its going price, receiving an investment certificate with each installment paid . When the installments are completed after seven years, property owners can cash in their certificates, which will be worth the total property price . At least in the short term, it’s a clever way for Palm Hills to raise cash and attract investors .
In summary… Just like the Chinese character for crisis reads, crisis composes of two elements which are danger and opportunity. It depends on how you take it and how you react to it. Great understanding of consumers and how they choose to survive during the crisis opens the way for brands to develop marketing activity that resonates with consumer’s behavior. The success or sales increase should not be too far to reach after all.