These are the words of Rahl Emmanuel, US President-elect Barack Obama’s new chief-of-staff.
The challenges facing world leaders in the midst of economic meltdown are formidable. So, too, are the challenges facing marketers and brands.
The challenges facing world leaders in the midst of economic meltdown are formidable. So, too, are the challenges facing marketers and brands.
The world recession is claiming victims across the marketing spectrum. Impulse-buying is dead. Brands trapped between true luxury and true value are lost. Conspicuous consumption is gauche, if not plain rude. Yet, some brands are already winning in this difficult and worsening climate.
In retail, Wal-Mart is winning. Its store sales were up 2.4 per cent in October - one of the few retailers not to report a substantial drop in year-on-year sales. It has also predicted a robust holiday shopping season. Wal-Mart is winning at the expense of competitors, and doing so with its value proposition “The Lowest Price. Always”. Often criticised as a ruthless discounter and destroyer of community businesses, Wal-Mart is now being viewed in a very different light by consumers. These difficult times are creating a new opportunity for the brand.
Wal-Mart is now a saviour of your precious household budget, and pays a powerful, emotional brand dividend.
Among restaurants, McDonald’s is winning. The largest fast-food restaurant chain in the world just reported an eight per cent increase in sales. Families and friends may have more worries and less disposable cash, but it is not forcing them to stay home and avoid the important social ritual of eating out. McDonald’s is an acceptable alternative with a consistent and familiar offering, and offers new healthy meal choices as well.
Oft-derided in the media over the past few years as being unhealthy and uninspiring, the McDonald’s experience is now being viewed by consumers in a significantly healthier light. Their brand is seen as a dependable, accessible, friendly, and fresh space to share food and conviviality. It’s paying a powerful emotional brand dividend.
In the entertainment sector, Hong Kong’s Ocean Park is winning. Ocean Park, a water-themed, enviro-sensitive amusement park, reacted to the recession early and announced that it was reducing admission costs by 30 per cent.
This move, doubtless initiated by Allan Zeman, who has some of the best marketing instincts, is bold and proactive. Families are hit hard by recession, and parents are challenged to provide children with a healthy mix of necessities and recreation. During good times, Ocean Park was successful in positioning itself as separate but equal to Disneyland. Now, Ocean Park’s move is formidable. It not only separates, but elevates above all competing venues by being the first, and most, compassionate brand to Hong Kong residents - a vital repeat customer to the park. Their brand is viewed in a new light, as a truly caring and action-oriented member of the community. It’s paying a powerful emotional brand dividend.
Many communications agencies are swift to counsel their clients that maintaining adspend during a recession will allow them to gain share. This is a convenient argument wrapped in faulty logic.
Eventually, recession plays out, recovery begins and brands that have survived the economic storm start to re-build. But some may never recover. Brands like Wal-Mart, Ocean Park stand to reap a long-term gain. These and other brands that pay out an emotional brand dividend to consumers stand to gain the most during hardships, and profit from it for years to come.
Craig Briggs, Brandimage Asia-Pacific
cbriggs@brand-image.com
