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Your Marketing Stimulus Package: Invest Now in Building Brand

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Every day we are bombarded with news about the economy—bank busts, bailouts and buyouts, rising jobless claims, more home foreclosures, declining consumer confidence, the unfolding "stimulus package," a national budget crisis...

In the marketing world, we hear a similar drumbeat about the fallout: dismal corporate earnings, company layoffs, marketing budget cuts, advertising gone dark, clients and agencies and people coming and going, a brand budget crisis—there is a sense of turbulence, malaise, and timidity...

We see a diminishing commitment to long-term brand building. The mission of the moment is driven by the CFO, not the CMO (if he or she is still in place), and calls for cost-cutting and short-term revenue-generating activities only.

Lead generation is "in." Immediate demand stimulus and call to action are the rage (the term "stimulus" has a sort of currency). Brand strategy and market research are "out" of fashion perhaps.

The decline, then, of brands and branding?

Not so fast.

There is a weighty and consistent body of historical data showing that marketers do harm, in the short-run and long-run, to their businesses and brands by kneejerk budget-slashing and by running scared.

A study of B2B marketing over six recessions in the 20th century found that not only did sales and profits decline for brands that cut brand-oriented advertising during the recession but also performance continued to lag upon the subsequent recovery. (The Buchen Agency)

The 7Ps of Branding

Today's brand leaders would be wise to consider and follow these 7Ps of Branding as a guide during the recession, and beyond...

1. Profit

Marketers now have a golden opportunity to profit and establish real competitive advantage by exploiting the current situation. That is, they can now increase brand value and market share relatively more easily and cheaply than during good times.

With competitive noise levels reduced, it is easier for a brand to stand out in the marketplace. Media costs are less prohibitive.

Interbrand CEO Jez Frampton argues for "protecting and growing a brand...a company's most valuable asset—and a far less volatile asset than others during a time of economic uncertainly."

2. Persistence

Corporate brand directors need to stay the course, which means going against the flow, not following the marketing herd. Even if budgets are trimmed in some areas, there should be a core of both strategic and tactical activities that endure (the former initiatives tend to be less budget consuming even in good times).

Such brand perseverance during uncertainty will provide reassurance to the customer base—an especially critical target now—not to mention to internal stakeholders.

Rosabeth Moss Kanter cites current downturn success stories of IBM and P&G as "role models" and examples of "persistence despite obstacles." (

3. Planning

Despite the strong economic headwinds, brand builders should remain committed to pursuing long-term visions and executing on plans while selectively, pragmatically improvising marketing tactics.

IBM during the recessionary early 1990s and Southwest Airlines after 9/11 are examples of brands that never wavered from their long-range brand strategic compasses and profited enormously by doing so.

4. Performance

Some marketers have cut and will continue to cut prices. But brands (and their communications) will be judged and rewarded now by delivering on value rather than merely price. Brand leaders do need to re/define the value of their offering, but without compromising the quality and experience that customers expect or need (despite across-the-board corporate cutbacks). Harvard Business School professor John Quelch also recommends investing in opportunistic market research, since there is a real need to define "performance" and "value" and gauge what is relevant to customers in the shifting environment.

5. Positioning

Brand owners must uphold and defend their core positioning and resist the temptation to sacrifice quality, reduce innovation efforts, or cut prices.

A study of over 1,000 companies showed that firms that cut manufacturing and administrative functions in a recession did tend to reap the benefits, whereas those that decreased spend on new-product development, quality, and marketing suffered. (PIMS)

Leading brands will stay leaders by offering and communicating their enduring relevance and point of difference. Recessions and discounts come and go, but trusted brands and their appeals tend to transcend and outlast those events.

6. People

There needs to be an appreciation of the link between top talent and top-performing brands. Hiring, motivating, and keeping the best people (who exemplify the brand) while competitors are pruning overhead is a key source of proprietary advantage.

Management guru Jim Collins chronicles the cases of Boeing, HP, and P&G, which bucked the trend during tough times by investing in talent (when their rivals were shedding critical human capital) and as a result thrived, outperforming the competition.

7. Principles

Brand leaders should work with CEOs to make sure that their brands and organizations are integrated and that employees internalize and externalize a set of values that don't change.

Both Quelch and Collins emphasize the importance of adopting core brand principles and personality traits, sticking with them and executing on them, for years and years. According to Kanter, IBM's and P&G's strong financial results today are partly owed to their focus on corporate brand values, ethics, and social mission.

Valued customers and employees will be more loyal if they are reassured on principles, by the brand, and by its chief executive and sponsor; this is especially critical in the B2B world, with its large transactions and greater numbers of stakeholders involved in the customer experience.

By the Numbers

Brands that adhere to the 7Ps of Branding will ensure they achieve the best return on their investment:

  • Southwest Airlines was the best-performing stock from 1972 to 2002 (Jim Collins).
  • In 1975, Ford and GM used similar advertising strategies, but Ford cut its budget; GM's sales grew after 1975, while Ford's declined 14% (Evan Carmichael).
  • From 1980 to 1985, much of which was a recessionary period, those companies that did not reduce their marketing budgets increased sales 16-80% (McGraw-Hill).
  • Companies that cut brand advertising during a recession typically see sales and income fall 20-30% over the next two years as a result (AdWeek).
  • IBM's brand asset is valued at over $59 billion (Interbrand/Business Week 2008).

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Kevin Randall is director of brand strategy and research at Movéo Integrated Branding (, a brand consulting and marketing communications firm based in Oakbrook Terrace, IL. Kevin can be reached at and 630.570.4813.

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  • by Kevin Horne Tue Mar 10, 2009 via web

    I like it all, altho i thought the first P was a bit misleading. I'd change it to "Push." While I agree the time could be ripe to get out there and talk, it in no way guarantees profit.

    Well done.

  • by Joshua McNary Tue Mar 10, 2009 via web

    Good overview of opportunities to consider while everyone else is talking about the negative. Convincing others of the validity of such arguments could be challenging, but intuitively many seem wise. However, I agree with Kevin, they don't guarantee profit. This said, the down market does provide excellent branding potential...

  • by Warren Schirtzinger Tue Mar 10, 2009 via web

    You've got to be kidding!

    Your 2nd bullet near the end of this article includes data from 1975 (!?!) That's 34 years ago! And the companies mentioned (Ford and GM) are bankrupt and nearly out of business. Such great examples!

    Plus, you're suggesting we use that data as an example to follow? Don't you think the world has changed just a bit in the last 34 years?

    HAHAHAHAH. I sure hope your clients know how to think for themselves

  • by Kevin Randall Tue Mar 10, 2009 via web

    Respectfully Warren,

    The more data we can look at (6 recessions across many eras, changes, brands and industries) the more powerful it is in making a case.

    Ford and GM are basket cases in 2009 because they did not get and deliver on PERFORMANCE and "value" to the market sufficiently to be profitable.

    I would not dwell on the one GM bullet at the very end. And that data probably says more about branding, marketing and volume of communications in general than it does about about GM's specific approach.

    But you are right. GM in 1975 has nothing to do with GM in 2009. That is exactly the point. GM lost its way a long time ago.

    By the way, IBM and P&G show great financial results TODAY, in Q1 2009...Southwest Airlines continues to thrive TODAY...

    I assume you do not work at IBM, P&G or Southwest.



  • by SHRIKANT PARIKH Wed Mar 11, 2009 via web


  • by Brandon Bester Thu Mar 12, 2009 via web

    Interesting article Kevin. I tend to agree, and during tough times the marketing budget is usually the first area that gets cut. Your points actually make me think back to The Seven Habits where Covey talks about maintaining a balance between Production and Production Capacity. In this case it would be maintaining a balance between a sustainable marketing budget and the correct level of marketing (advertising, etc) as an investment in future capacity.

  • by Sameer Bhaduri Sat Mar 14, 2009 via web

    Good perspective Kevin.
    I agree to your remark on 'GM in 1975 has nothing to do with GM in 2009' and the objective here is about 'Corporate Branding Strategy' during economic slowdowns...Here in India, GM and FORD are still looked at as iconic brands but they probably got lost on their way in Product Innovation and agility...

  • by MistrBlistr Fri Mar 20, 2009 via web

    Why are you SHOUTING, Shrikant?

    Caps off ...

  • by Shrikant Parikh Sat Mar 21, 2009 via web

    thanks MistrBlistr will take care next time(re: CAPS..). However would appreciate your comments on the article...

  • by Imelda Alejandrino Sun Apr 5, 2009 via web

    I couldn't agree more on minding the "brand" store, when you're busy foraging for sales. I'd be interested in getting comments on concept. Need reality check.

  • by Celia White Tue Apr 14, 2009 via web

    It's always good to read an article on branding that upholds traditional and non-traditional strategies. Well done!

  • by The Dream Foundry Wed Jul 15, 2009 via web

    I am visiting this article rather late, but I find it interesting that there are marketing professionals, presumably self-styled, that can't recognize the inherent value in it. I usually find alliteration to be a cheap sleight of hand for both the writer and the reader, but the points made here are well worth considering.

    Consumer dynamics are always changing, but that's not what this is about. In a recession you move back to the basics, to the lowest common denominators that influence the laws of choice, and with regard to marketing these points all strike true. As for currency, it's hardly an issue - Motorola's profit margins have been dropping for years but manufacturers still report success using their six-sigma practices, and modern militaries continue to reference the 2,500 year old treatise, The Art of War.

    Times may change, principles do not.

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