Nic Shepherd

25 April 2009

One of the obvious effects of the global financial melt-down is that cash-strapped consumers are having to make hard choices about where to cut personal expenditure. What does this mean to a brand manager who is also under pressure to cut advertising budgets? And just how much can a brand  do to protect a business against this erosion?

Clearly, the positioning of certain brands – notably those offering affordability or value-for-money – will benefit from the consumer’s need to economize. It’s an ill wind that blows nobody any good.

These brands need to take the opportunity to strengthen their niche in the market by maintaining their positioning, and offering empathy and support to the cash-strapped. They should  deliberately look to acquire and maintain new customers who are being forced to ‘trade down’ to more affordable brands by financial circumstances.

However, the challenge facing premium brands is very different. Nothing tests brand loyalty quite like the current financial storm!

At a time when customers may be forced to either consume less, delay significant purchases such as cars or houses altogether, or migrate to a lower-priced brand, the core emotional identification of a target audience with a  brand needs to be strengthened. This is not the time to dilute or confuse your brand promise, but to convey it more strongly than ever.

Of course, from a rational point of view, underlining the longer term benefits of a higher-priced but better quality product is certainly a strategy that should be considered. And certainly customer relationship marketing initiatives should be refocused and intensified. But such communication should always remain true to the values, the personality and the promise of the brand.

It comes back to the essentials: amongst other things, a brand is a sophisticated means to create an emotional bond between a company, product or service and its target audience. At its strongest, this bond can become deeply embedded in a client’s sense of identity. Sure, he may not be able to afford tickets to the match, but a Man United supporter’s fanatical allegiance is not going to be undermined by that fact.

So it comes down to the fundamentals: how strongly does your brand connect with the heart of your target market? Does it clearly resonate with them? Speak their language? Value their values? And offer a brand experience that becomes part of who they are?

If so, your brand will certainly help your business weather the storm.

If not, you should take urgent steps to rectify the situation.  Weak, confused, unfocussed brands could well become casualties of the current crisis.