Recession Obsession: Repositioning Brands Around a Troubled Economy


You know times are tough when "fuel" is a four-letter word and the word "staycation" has a good chance of being inducted into the Merriam-Webster Dictionary. Every facet of business has felt the effects of this economic downturn--dare we say recession--and communications professionals have had to revise their strategies accordingly. This is especially true with regard to branding and marketing efforts, as consumers have modified their behavior and now interact with brands in a very different way. This reality served as the backdrop of a new report released this week by Cramer-Krasselt (C-K), "Shifting Times: What Brands Need to Know to Navigate Today's Economy." The research identified specific trends (see sidebar, page 6) that impact consumers' purchasing practices, as well as the implications these trends have on brands and the communicators who "own" them. "There have been downturns before, but this one seems to have affected us in a much deeper way that will change consumer behaviors in the long run," says Margot Bogue, SVP/group planning director of C-K. "Now people are finding creative ways to stay ahead and stay afloat, and [communicators] need to do the same." With that in mind, consider the following trends in conjunction with strategies and tactics for coping with them. *Be perceptive to potential new audiences. The economy has forced most people to take a hard look at the ways they spend money, and many are changing their lifestyles dramatically. For brands, this means that target audiences are shifting, and communicators must adapt. However, while it's easy to see this as a challenge, Bogue points out inherent opportunities. "You have a whole new audience you can reach out to," she says. "Identify a new audience that you may have never catered to before, and invite them to connect with your brand." In addition to staying local, more and more consumers are buying local. According to C-K's research, "The economic benefits of buying local are fairly simple: It cuts out the middleman, puts more money into the local economy and reduces transportation costs." To address this, "marketers need to be sensitive about their distribution systems," Bogue says, encouraging executives to develop messaging (and actually implementing practices) around being more environmentally conscious and supporting their local economies. *Battle buyer's remorse. It's a typical scenario: A consumer makes an impulsive purchase and, upon returning home, feels guilty about it. The turbulent economy only exacerbates these twinges, so execs must be sensitive to this. Instead of focusing on the negative, communications efforts should focus on the fact that consumers still deserve little splurges, and that their brands want to accommodate this. Starbucks has taken action in this regard; it now offers customers who buy coffee in the morning a coupon to purchase any iced beverage for $2 after 2 p.m. It's a small savings, but it sends the message that Starbucks appreciates its loyal customers' business and wants to give them incentives to keep coming back. "It's OK to be creative in finding ways to get consumers to come back," Bogue says. "Help consumers thrive with little payoffs." *Roll back something other than prices. "The answer to a down market is not to cut spending, but to practice smarter spending," the research report says. Rather, executives need to invest in understanding their consumers' needs and differentiating their own brand from competitors. According to Bogue, brands need to adjust to reflect consumer sentiments; they also need to be completely authentic and transparent in their efforts to create deeper consumer connections. "Don't change the prices," she says. "Change the conversation so it's in the same context as what the consumer is thinking." AirTran execs did just that with its recent campaign that attacked the challenge of sky-high gas prices head-on. Messages include "Fares cheaper than a tank of gas," and "Round trips for less than a trip to the pump." Rather than changing their product offering, the team reframed it to fit the context of a timely conversation. It even used fuel prices to show the brand's value to consumers. The moral of the story is simple: No PR initiative can reverse recession-inspired negativity, but communicators can make little changes in the way they shape messaging to make their brands more accessible to consumers. Now more than ever, a little goes a long way. PRN CONTACT: Margot Bogue, mbogue@c-k.com Best Practices For Repositioning Brands During A Recession Don't change the brand identity; just reframe messaging in the context of current conversations and consumer concerns. Rather than cutting costs in the market research department, use the recession as an opportunity to get to know your consumers better, and to cater to their changing needs. If you are a luxury brand, don't lower prices to accommodate spending habits; doing so implies that you are lowering your quality as well. Focus on protecting and enhancing the quality of your brand. Use auction sites like eBay to auction off products that aren't priced to sell in the store. Help consumers see the added value of your brand, products and services. Recession-Inspired Branding... ...by the numbers: More than 50% of survey respondents are willing to sacrifice a brand they know and love for a cheaper alternative. Nearly one-third, however, say they aren't willing to sacrifice a brand they know and love for a cheaper alternative, even if it puts a strain on their wallet. 85% of survey respondents haven't noticed any changes in how products or services are being advertised during the current economic downturn. 65% are more attuned to product prices, and 57% are more attuned to sales/promotions, in the context of advertising messages. ... by the trends: "Locavore-ism:" Closely tied to being eco-sensitive, this trend centers on the concept of buying local to manage household costs. Sin and salvation spending: Torn between being fiscally responsible and indulgent, consumers are adjusting their spending habits to use greater judgment while still allowing for selective spending. This creates greater potential for buyer's remorse. "Luxcession": This refers to the pullback in the luxury sector of the economy as luxury consumers' confidence plunged. Simplicity movement: Consumers are increasingly reevaluating their need to cut back on nonessential costs. Neo-haggler: As people become more price conscious, they are more inclined to haggle over the prices of products and services that traditionally sold at sticker prices. Source: C-K Brand Planning Research, June 2008, and C-K white paper, "Shifting Times: What Brands Need to Know to Navigate Today's Economy."

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