Work That Recession

In an exclusive blog article, Dorothy Mackenzie, chairman of branding agency Dragon takes a pragmatic look at the challenges of the recession and how companies can effectively use marketing to take their brand forward through the recession:

“A recent YouGov survey for Marketing Week found that 91% of marketers believed that continual investment in brands is extremely important during a recession. However the same survey showed that over two thirds of marketers faced a static or reduced budget for 2009.

This may be a sad reflection on the inability of marketers to justify their spending to their boards. It may be that conditions are so bad that there is no option but to sacrifice long term gain for short term survival and simply hide under the desk until times get better. Or (and let’s assume this is the case) marketers may now be extremely savvy and have ways of marketing more effectively with less money.
Lets consider the three things that are essential for marketers to be considering carefully now:

Fine-tuning the strategy and the brand

The new conditions created by recession may well call for some quite fundamental re-thinking. This may be obvious in terms of the relative attractiveness of different geographic markets, but less obvious when it comes to different consumer segments. This may prompt some questioning around which segmentation model would be most helpful, given the importance of targeting the brand’s efforts on those groups that are most likely to lead to sales growth and brand loyalty.

Some demographic groups may see their spending power significantly affected by the economic conditions: brands relying on high spending newly retired baby boomers or on high income city professionals may have to look for other groups – or tailor their offer to meet changed spending priorities.  Segmentation models based primarily on attitude or need may have to be overlain with ability to pay.

If the ‘who’ in the marketing strategy may need to be re-focused, the ‘what’ may also need close examination. The shifts going on in people’s broader lives and attitudes may mean that the brand proposition will need to be re-framed or re-thought to ensure it is relevant and appealing. There are some significant shifts taking place in people’s behaviour and values at the moment – shifts that may last much longer than the recession – and understanding these will be essential to both short term and longer term success.

Integrated brand communications becomes essential rather than desirable

The recession will accelerate the change in media mix that has been happening for some time. One danger for brands using a wider array of channels, and experimenting with many new forms of consumer engagement through social networking, user-generated content, live brand experiences etc is that brand coherence will be lost in a frantic wave of very channel-led activity. With the recession likely to lead marketers to change the proportions of their marketing efforts even more significantly in favour of the non-traditional channels, it becomes even more important to push for a clear idea that can inspire all brand communication and activation.

Assessing the effectiveness of different ways of communicating and engaging will be even more important. Just because a channel is cheap doesn’t mean that it’s good value – unless it influences the consumer in the desired way. We may need to start talking to consumers far more about their experience of different communication vehicles, and assessing these qualitatively as well as quantitatively, to put together a better picture of what is working best to meet the brand’s objectives.

Think about innovation in an innovative way

Most marketers accept that innovation provides a path through recession and that innovation programmes need to be protected despite budget pressures. But there are some approaches to innovation that will be more important than others during recession.
Incremental innovation – normally focused around adding new features or flavours to simply provide sustained activity on the brand – will need to focus on what really matters to consumers in terms of improving the core benefit of the brand rather than simply offering more variety.

The motto ‘necessity is the mother of invention’ is a good starting point for innovation. How can you help people save money or energy; what compromises are they now prepared to make; what will represent new luxuries? The twin agendas of sustainability and economic frugality are mutually reinforcing and represent powerful underlying drivers of behaviour and attitude change. Behaviour change that might have taken several years to embed may shift more quickly now – creating market opportunities for companies who are close enough to see this happening and respond.

Companies like P&G who have transformed their approach to innovation over the past few years, are committed to ensuring that up to 30% of their innovation portfolio is ‘disruptive innovation’ – and in a period of major economic and social change, one could argue that it should form an even greater proportion.

It is clear that innovation will have to be done highly efficiently and cost-effectively now– and probably more quickly than ever.  The recession is the time to re-assess the innovation process, rather than to abandon it.  The process must allow for a broad enough perspective on consumer’s changing behaviour and attitudes and a close understanding of their needs and wants. It also has to stimulate the creation and development of radical as well as incremental ideas and allow for an accelerated process for idea prototyping and trial.

With their strong commitment to continued marketing and brand investment, and their more limited budgets, marketers face a year when they will be forced to be both more rigorous and more inventive than ever.