Transition, Transformation and Activism
         in the New Consumer Economy
Transition, Transformation and Activism in the New Consumer Economy
As 2009 draws to a ...
Distinction Is Possible
Yet, brands that fit consumers’ lifestyles can continue to command a premium place of distinction
Another example of alchemy is the recent collaboration between the AMC period drama, Mad Men, and
its partnership with clo...
After taking into account the five DNA characteristics of distinct brands, activation pillars for achieving
brand distinct...
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DNA of Brand Distinction White Paper


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Due to an evolving economic landscape and shifting consumer and family values, communications strategies must be re-examined and tailored by category to meet new consumer needs. Iconic brands have disappeared from the landscape, while others are emerging as new heroes.

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DNA of Brand Distinction White Paper

  1. 1. THE DNA OF BRAND DISTINCTION 2010 Transition, Transformation and Activism in the New Consumer Economy By: Allyson Hugley Director of Insight Creation, MS&L
  2. 2. THE DNA OF BRAND DISTINCTION 2010: Transition, Transformation and Activism in the New Consumer Economy As 2009 draws to a close and marketers prepare for 2010, the unprecedented changes that defined the past year must be acknowledged, analyzed and understood to survive and thrive in a radically transformed marketplace. The extraordinary values recalibration that consumers are experiencing as a result of the near collapse of the global economy is expected to define purchasing priorities for a generation. The brand landscape has also been transformed. Icons disappeared, stalwarts teetered on the brink and new heroes emerged. In the brave new marketplace born out of the ‘Great Recession’, 64% of consumers say they will never spend as freely as they did before the recession, and 62% say they do not miss many of the things they gave up because of the recession.1 Given these market forces and trends, brands have two choices - distinction or extinction. Only brands that achieve true distinction and “non-negotiable” status will survive this protracted period of economic challenges. Thus, it is more important than ever for marketers to fully comprehend and effectively activate around the evolving DNA of brand distinction. To capitalize on the shifting DNA of brand distinction in 2010, marketers must come to terms with the fundamental truths of the times. First, 2010 may look the same or worse than 2009 as U.S. consumers continue to face rising unemployment. While many consumers believe the worst of the recession in terms of steep job losses and declining asset values is over, most do not see the economy as in recovery. Forty-five percent of consumers think it will take three to five years for the economic turmoil to be over.2 Second, the DNA of distinction will look very different from what it was just a year or two ago. Not only have consumers come to expect brands at all price points to deliver durability, safety, and reliability, but the latest generation of brand differentiators – empathy, environment, CSR – have also devolved into “table stakes” during this most recent recessionary period. Even style and design no longer qualify as differentiating traits for brands with 74% of consumers expecting to find products with flair or style even when they pay a lower price.3 While brands that do not offer core benefits to consumers are fast tracking toward extinction, brands that only offer core, “table stakes,” benefits are apt to flounder and die a slow death drowned in a sea of sameness. Third, consumers need active and ongoing engagement with brands - especially at a time when more passive engagement methods, such as advertising, are being filtered out. According to GfK Roper Reports Worldwide, 77 percent of North American consumers say they avoid advertising at least sometimes. Brands must rally consumers around like-minded core values to create consumer activism and loyalty. This is why brands that ‘friend’ consumers will be key in 2010, because it goes beyond engagement or even co-creation to a deeper level of trust, predicated on sustained conversation and listening and an openness to altering a brand’s DNA based on consumer counsel and advice. 1 “The Yankelovich MONITOR 2009/2010” | 2 “The Yankelovich MONITOR 2009/2010” | 3 “The Yankelovich MONITOR 2009/2010”
  3. 3. Distinction Is Possible Yet, brands that fit consumers’ lifestyles can continue to command a premium place of distinction even in one of the most challenging economic environments since the Great Depression. MS&L’s 2009 Brand Distinction Survey found 66 percent of consumers agreeing that no matter what happens in the economy, there will always be brands that they are willing to pay more for. After closely watching the evolution of the brand landscape and consumer preferences over the past year, we believe at MS&L that a new paradigm for brand distinction is emerging and that the DNA of distinction in 2010 will have five defining characteristics:  Navigation  Alchemy  Elasticity  Portability  BBF Status Navigation After a year of falling economic indicators and rising anxiety, consumers are gravitating to brands that are able to help them arrive at a better physical or emotional place. Half (52%) of consumers are feeling more exposed to the possibility of losing everything now compared to a year ago4 and they are either looking to navigate through or around this lingering period of uncertainty. The brands best able to help them do this will rise above the fray. Navigating through the current period is about helping consumers feel less vulnerable and more in control. Six in 10 consumers, up significantly from a few years ago, are working hard to come out on top in every situation – from the least important to the most important.5 Navigating around the current period is about providing consumers with small, economical, and sometimes unexpected escapes. There is tremendous opportunity to achieve brand distinction by engaging consumers in ways that take them to a different, more positive, emotional place. Even as trends suggest consumers are going “back to basics” and focusing more on pragmatic purchase drivers, the power of emotive triggers should not be underestimated. Humor is more apt to enhance a brand’s or advertisement’s talk value than information about product and service benefits. Again, functionality is “table stakes,” transcendent experiences differentiate. And, according to MS&L’s 2009 Brand Distinction Survey, nearly half of consumers are willing to pay a premium for a brand that offers a truly unique experience. Alchemy Nine in 10 consumers cut back on something this past year6 and decisions around trade-downs and trade-offs are no longer limited to category-specific consideration sets. Every brand decision is in competition for share of wallet. Now more than ever it is critical that brands establish themselves not only as leaders within their category, but leaders across category. Mixing of brand DNA across categories to better align with how consumers are thinking about and evaluating brands – holistically rather than category by category - is central to differentiation in today’s marketplace. By aligning complementary strengths, brands are better able to capitalize on naturally existing lifestyle intersections to engage consumers and to bring unique offerings to market. One example is the recent alliance between American Airlines and The Food Network, which enables American Airlines to weave exotic locales into the storyline of the Food Network’s hit reality show The Next Iron Chef, while introducing its services to a discerning new audience of ‘tastemakers’. The innovative integration highlights the strengths of both parties - American’s global network and culinary services and the Food Network’s appeal to culinary exploration – to effectively convey brand messages of both companies in an entertaining fashion. By tapping into travelers’ passion for food and foodies’ passion for travel, the brands are magically mixed for greater consumer engagement. 4 “The Yankelovich MONITOR 2009/2010” | 5 “The Yankelovich MONITOR 2009/2010” | 6 “GfK Roper Reports Worldwide 2009”
  4. 4. Another example of alchemy is the recent collaboration between the AMC period drama, Mad Men, and its partnership with clothing company Banana Republic. Window mannequins were outfitted in 1960s outfits while shoppers were offered the chance to win an on-set appearance. This marketing execution was unique because it was equally attractive to men and women, and distinctive, because it allowed Banana Republic to create emotional connections with consumers who – right now – yearn for the days of ‘Americana’ when everything was simpler and more predictable. Elasticity The nation and consumers have been significantly changed by the Great Recession. Two-thirds of consumers believe the current recession will change the nation forever.7 Another half (48%) believe the recession will change how they shop forever. Consumers want to see that brands are evolving to adapt to the new reality with them. Coming off of a year where consumers have had to get creative and stretch themselves to adapt to the “new normal,” many are looking to see how brands are staying rooted to their core values propositions, while stretching the boundaries of the benefits offered to consumers. A recent example of elasticity is the ‘flavor transformation’ that Wrigley’s 5 Gum has provided consumers, while arguably transforming the entire Wrigley’s business model. By evolving the staid Wrigley’s spearmint gum (and multiple flavors since then) into a new brand that appeals to youth with provocative taglines such as ‘stimulating your senses’ and ‘5 is the New Black’, along with ample opportunity for content co-creation on YouTube and Facebook, Wrigley has proven that distinction can be achieved without significant product innovation or new category introductions. Rather, it is about appealing to a consumer’s ‘taste’ for what they are familiar with -- but with an unexpected twist -- and then carving out enough room in the brand’s DNA to allow for the brand to transition and transform to speak to a new generation of consumers. Given that gum has eluded extinction for 5,000 years, continuing to evolve on the category experience is definitely something to chew on. Portability Consumers are engaging less with brands at traditional points of purchase. More than half of online Americans say the recession is causing them to spend more time on the Internet, where they are increasingly researching purchases to suppress impulse buying and shopping for deals.8 More consumers are also bypassing traditional brand messaging channels. Use of DVRs to skip commercials is up almost 40% since 2007, for instance.9 As consumer habits continue to evolve and adapt to new economic and technological realities, brands best able to leverage digital and mobile technologies to create mechanisms for delivering on brand promise outside of traditional retail occasions, media channels, and points of brand engagement will be in the best position to maintain and grow market share. BBF (Best Brand Friend) Status The balance of consumers’ relationships with brands is shifting from transactional to social. Brands best able to establish social connections with and purpose for consumers on- and off-line are poised for distinction. The 2009 MS&L/PRWeek Social Media Survey of communication professionals found that while only 54 percent consider social media “very important” to connecting with consumers, 79 percent expect social media to have more of an impact of business over the next year or two. But for consumers, distinction requires that online relationships be supported and transferrable to the off-line world. Indeed, according to MS&L’s 2008 Global Values Research, more than eight in 10 Americans say that so much contact today is virtual that it is more important than ever that companies prove to people who they are in everything they say and do. Brands able to best establish and sustain social relevance for consumers – on- and off-line – will achieve differentiation. Zappos exemplifies what it means to be a BBF. The customer experience offered by Zappos has been described as “like talking to a friend that happens to sell shoes.” Zappos achieved its rare BBF badge by establishing a personable brand that is friendly and helpful, and by leveraging social media channels such as Twitter to create sustained opportunities for fact sharing and relevant branded conversations with consumers.10 7 “The Yankelovich MONITOR 2009/2010” | 8 “Iconoculture, 3.30.09” | 9 “The Yankelovich MONITOR 2009/2010” 10 “Balwani, Samir,, Presenting: 10 of the Smartest Big Brands in Social Media, February 2009”
  5. 5. After taking into account the five DNA characteristics of distinct brands, activation pillars for achieving brand distinction in 2010 will include:  Strange Bedfellows: Over the next year, more brands will look farther outside their category to form alliances with brands that share similar consumer lifestyle intersection and passion points. We will also see more brands in industries hardest hit by the recession looking to form alliances with power brands in unrelated categories or with entertainment properties to capitalize on equity exchanges, or transfers, to achieve distinction.  Newstalgia: In 2010, more brands will continue to tap into the wisdom of the past to comfort consumers with familiar imagery and the assurance of success through tried and true methods. But, a youthful twist and refresh is required to speak to the times. Old is new and distinction will be defined by classic messages and images delivered with a youthful and modern sensibility.  Hyperlocal: As technology continues to allow for deeper drill downs into individual consumer needs and consumers engage more with brands on a one-on-one level, hyper local and highly customized offerings that deliver benefits to individual consumers on-demand and irrespective of location will thrive.  Distinctively Digital: In 2010, more brands will leverage new social media and mobile tools to help navigate consumers to better physical and emotional states. Brands best able to capitalize on the power of digital and mobile channels to offer consumers transcendent, social, and customized experiences on- and off-line will achieve distinction and gain market advantage. Can we ever imagine a world without GPS?! The new DNA of Brand Distinction for 2010, while predicated on proven fundamentals, is a fresh spin – a touch of Newstalgia, if you will, on what brands need to do to avoid extinction in a challenging economy that is not expected to fully recover for several years. It is a call-to-action and a roadmap for brands to evolve beyond “table stakes” benefits. The core components of the new DNA of distinction – navigation, alchemy, elasticity, portability, and sociability (BBF)–coupled with core activation pillars serve as a guide for how brands can move consumers toward the highest level of brand engagement: activism. By motivating consumers toward brand activism, on- and off-line brands are able to become so embedded in consumers’ lifestyles that their value and relevance become non-negotiable – the coveted and rare status that allows brands to not only survive, but thrive, in good times, and bad.