RECESSIONARY BRAND BUILDING?

Marketers are facing challenging decisions and trade-offs when it comes to building and sustaining their brands during these recessionary times.

South Africa is teetering on the brink of recession with threats of downgrades to ‘junk status’, slow economic growth, a fluctuating currency and high unemployment rates. Although there was similar instability in 2008 and 2009 due to the global financial crisis, the challenge for marketers today remains overwhelming.

Cherry pick

Seven years back, companies employed different marketing strategies to get their brands through the economic turbulence.

Some brands opted to continue with ‘business-as-usual’ much to their detriment. Others chose to take a risk and go big with heavy brand building activities, and others cherry-picked and executed a few brand-building opportunities to build relevance and resonance.

Which of these strategies was best? The simple answer is that there is no simple answer. However, brands can now learn a lot from the brand building and maintenance activities that took place during the previous slow down.

Dont cheapen

When times are tough and short-term sales are taking a knock, marketers are tempted to run sales promotions and offer enticing discounts to cash-strapped consumers.

This tactic may work to build short-term sales spikes and beat out the competition temporarily, but often it leads to tricky price wars and an erosion of brand equity long term, especially for leading and premium brands.

Although you may be offering relief to consumers in the short-term, always put the long-term equity of your brand first. A brand that did this really well during the previous slow-down was Woolworths with their ‘Essentials’ range.

Instead of relying on discounting and sales promotions, Woolworths developed a ‘no-frills’ value range of household products – with basic packaging and an assurance of everyday value and quality. In doing this, it was able to retain the consumers who were feeling the pinch, instead of eroding the equity of their premium brand.

Out-of-the-box

It may sound obvious, but when the status quo is challenged, you need to challenge your own status quo.

In turbulent times, risk averse marketers are often inclined to stick with their ‘bread and butter’ methods: tried and tested marketing tactics that draw in their usual customer base. The challenge is when your usual customer base don’t necessarily behave ‘normally’, this strategy could render itself null and void!

In recessionary times, there is no ‘normal’ – and clever marketers should question the relevance of every piece of marketing and communications.

A brand that challenged the status quo and thought out-of-the-box in the last slow down was Hyundai. They understood that people were under considerable pressure with potential retrenchments and cut backs, so they devised an assurance programme, which allowed customers to return their car in the event of job loss or retrenchment. It proved a highly effective campaign and brand building initiative with competing automotive brands soon following suit with similar promises.

The bright side

Sometimes it’s worth looking on the bright side in gloomy times – this could be a time to invest in your brand.

During these times, marketers do not want to take risks or be seen as reckless with budgets. However, abandoning your brand during these times can be damaging, as consumers often seek brand reassurance when the going gets tough.

Brands that retract their spending in tighter economic conditions often lose market share, once the economy bounces back, as they have lost awareness and their relevance has diminished.

Locally, Standard Bank opted to invest in their brand during the slowdown in 2009 and relaunched with a new identity and positioning. A ‘gutsy’ move – especially for a financial services provider. They capitalised on good rates on media space, and a lack of marketing clutter. With so many other brands ‘opting out’ during this time, the impact of the new brand was much greater.

Today, marketers have a lot to contend with – more demanding consumers, fragmented media and retail channels with lots of clutter to break through. A fragile marketplace adds even more complexity into the mix.

Essentially, to ensure that a brand can weather the storm, marketers should put the long-term needs of their brand at the forefront of every decision. Doing this not only enables smarter marketing decisions, but sustainably builds brands that can stand the test of time.