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Brand Advisory: When The Market Gets Tough, The Tough Get Marketing
Brand Advisory
The Marketing Doctor Says:
When The Market Gets Tough, The Tough Get Marketing
Folks, there are four pieces of news that tell us a whole lot about what’s ahead.
The first is in the Wall Street Journal. Here’s the link. It’s about how consumers are abandoning brand loyalty. This might be overdone; but the fact is there’s a trend here, and complacency is fatal.
The second piece of news is about auto sales, specifically about Toyota (a brand with a winning strategy I was able to praise just a few months ago before everything fell through the floor). Toyota just announced a 56% percent profit drop going forward (and, remember, just the other day GM said they’re looking at the worst car sales market since just after World War II —let me say that again— since World War II!). Link to Toyota news from Bloomberg here.
The third piece is about an art auction held at Christie’s last night. That article is here. A month ago, we saw the big Damien Hirst art auction make record money; now “surefire” art sellers are wanting for buyers.
And, finally, chain store sales numbers are out, and they’re the weakest since 1969. Double-digit declines seen at GAP and Abercrombie. Even the discounters were hit hard (except for Wal-Mart, which gained).
Why these four pieces of information together? Simple. Your cash register (aka your sales) is your marketing seismograph. Under normal conditions, sales, even small shifts in purchasing habits, can give you great indications of short- and long-term trends. But all these numbers taken together indicates that these are not normal conditions —yes, my friends, we’re having a collective retail meltdown.
We are in a new environment, one that most of us have never seen before. This info is telling us one thing about this marketing environment: price point. Price and value for money will be the leading determinants for most consumers in our immediate future.
Just look at this excerpt from the Wall Street Journal article. (It’s worth quoting it at length because it’s a real eye-opener, especially the quote from Kimberly-Clark CEO, Falk):
When Summer Mills visited her local CVS drugstore recently, to save a few dollars she bought the store-brand facial scrub rather than the Olay version she normally uses.
"I thought I'd be able to tell the difference, but I couldn't —I looked at the ingredients and they seemed almost the same," says 30-year-old Ms. Mills, a stay-at-home mother of two in Ardmore, Okla. On her next shopping trip, "I'm going to buy the store-brand moisturizer and cleanser —it's less money."
Many Americans are changing their everyday purchases and abandoning brand loyalty, prompted by the persistent financial pressure of rising food, gasoline and electricity prices. Over the past 24 months, consumer prices have risen 7.8% according to the U.S. Bureau of Labor Statistics. From coloring hair at home instead of at the salon to trying cheaper laundry detergents, new evidence indicates that Americans are modifying even minor household habits to save money.
Kimberly-Clark Corp. CEO Thomas Falk noted that sales of the company's potty-training pants, once one of the biggest sales-growth products in the baby aisle, have fallen off in recent months. "You're seeing consumers leaving children in diapers longer... the diaper is less expensive per piece than a training pant," he said in a recent conference call in which he announced a 9% decline in third-quarter earnings.
Shoppers are even buying toilet paper differently…
So what do we do? Is branding a thing of the past? No, branding is still critical, but business is going to have to get ever more creative, energetic and Target Market-oriented to keep the consumer. This will mean intensifying promotions, price-point battles, discounting, sampling —actively showing the customer the advantages of your brand over the other in every way possible. And, yes, if the market conditions demand it, even making some pretty big brand and business-model changes to keep the cash register ringing.
Now is a good time to reassess. Listen to your cash register and determine what trends are developing that can help and hurt your company, brand or business. And then make the changes necessary, because all the indicators are saying that this new cautious-consumer environment will be with us for a while.
The tough are going to get marketing, and the best marketers are going to thrive.
And remember, it’s always easier when you keep marketing in mind.
The Marketing Doctor Says:
When The Market Gets Tough, The Tough Get Marketing
Folks, there are four pieces of news that tell us a whole lot about what’s ahead.
The first is in the Wall Street Journal. Here’s the link. It’s about how consumers are abandoning brand loyalty. This might be overdone; but the fact is there’s a trend here, and complacency is fatal.
The second piece of news is about auto sales, specifically about Toyota (a brand with a winning strategy I was able to praise just a few months ago before everything fell through the floor). Toyota just announced a 56% percent profit drop going forward (and, remember, just the other day GM said they’re looking at the worst car sales market since just after World War II —let me say that again— since World War II!). Link to Toyota news from Bloomberg here.
The third piece is about an art auction held at Christie’s last night. That article is here. A month ago, we saw the big Damien Hirst art auction make record money; now “surefire” art sellers are wanting for buyers.
And, finally, chain store sales numbers are out, and they’re the weakest since 1969. Double-digit declines seen at GAP and Abercrombie. Even the discounters were hit hard (except for Wal-Mart, which gained).
Why these four pieces of information together? Simple. Your cash register (aka your sales) is your marketing seismograph. Under normal conditions, sales, even small shifts in purchasing habits, can give you great indications of short- and long-term trends. But all these numbers taken together indicates that these are not normal conditions —yes, my friends, we’re having a collective retail meltdown.
We are in a new environment, one that most of us have never seen before. This info is telling us one thing about this marketing environment: price point. Price and value for money will be the leading determinants for most consumers in our immediate future.
Just look at this excerpt from the Wall Street Journal article. (It’s worth quoting it at length because it’s a real eye-opener, especially the quote from Kimberly-Clark CEO, Falk):
When Summer Mills visited her local CVS drugstore recently, to save a few dollars she bought the store-brand facial scrub rather than the Olay version she normally uses.
"I thought I'd be able to tell the difference, but I couldn't —I looked at the ingredients and they seemed almost the same," says 30-year-old Ms. Mills, a stay-at-home mother of two in Ardmore, Okla. On her next shopping trip, "I'm going to buy the store-brand moisturizer and cleanser —it's less money."
Many Americans are changing their everyday purchases and abandoning brand loyalty, prompted by the persistent financial pressure of rising food, gasoline and electricity prices. Over the past 24 months, consumer prices have risen 7.8% according to the U.S. Bureau of Labor Statistics. From coloring hair at home instead of at the salon to trying cheaper laundry detergents, new evidence indicates that Americans are modifying even minor household habits to save money.
Kimberly-Clark Corp. CEO Thomas Falk noted that sales of the company's potty-training pants, once one of the biggest sales-growth products in the baby aisle, have fallen off in recent months. "You're seeing consumers leaving children in diapers longer... the diaper is less expensive per piece than a training pant," he said in a recent conference call in which he announced a 9% decline in third-quarter earnings.
Shoppers are even buying toilet paper differently…
So what do we do? Is branding a thing of the past? No, branding is still critical, but business is going to have to get ever more creative, energetic and Target Market-oriented to keep the consumer. This will mean intensifying promotions, price-point battles, discounting, sampling —actively showing the customer the advantages of your brand over the other in every way possible. And, yes, if the market conditions demand it, even making some pretty big brand and business-model changes to keep the cash register ringing.
Now is a good time to reassess. Listen to your cash register and determine what trends are developing that can help and hurt your company, brand or business. And then make the changes necessary, because all the indicators are saying that this new cautious-consumer environment will be with us for a while.
The tough are going to get marketing, and the best marketers are going to thrive.
And remember, it’s always easier when you keep marketing in mind.
TODAY'S TANTILLO TAKEAWAY -
Tough times will prove that marketing is essential and the best marketer wins.
Great article
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good article!I'm definitely going to bookmark you.
regards
blueoo.com
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Many Americans are changing their everyday purchases and abandoning brand loyalty, prompted by the persistent financial pressure of rising food, gasoline and electricity prices.
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