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Millward Brown: Point of View


Post-recession Marketing: Addressing a
New, More Mindful Consumer
As economies recover around the world, global marketers face new challenges in
relating to consumers. A new post-recession era is dawning. Consumers have revised
their priorities, and advertising needs to speak differently to these consumers in the
years to come if brands are to survive and thrive.

                                   New Times, New Attitudes, New Behavior
                                   The global recession is just one of many events that have undermined people’s sense
                                   of security in the past decade. Terrorism, political instability, global warming, and the
                                   degradation of the environment were all looming large as concerns even before financial
                                   markets and the government organizations meant to oversee them began to fail. As a
                                   result, a mood of mistrust and anxiety developed among many people around the world,
Benoît Tranzer
Managing Director
                                   and that mood sparked a reexamination of priorities and values.
Millward Brown France
benoit.tranzer@millwardbrown.com
www.millwardbrown.com              In the face of all these concerns and fears, a new        As mindful consumers,
www.lesmarquesalaloupe.com
                                   consumer attitude began to manifest itself. Many          people are increasingly
                                   people stopped finding joy in excessive consumption
                                                                                             challenging the assumption
                                   and heedless spending, and a new trend, which
                                   I call “mindful consumption,” emerged. Mindful            that happiness can
                                   consumption is demonstrated by consumers buying           be purchased.
                                   fewer products and fewer brands, and being more
                                   considered in their choices.

                                   Though it is most apparent in mature markets, I expect mindful consumption to eventually
                                   affect all global markets — even the emerging ones — because it represents more than
                                   just a response to the present crisis. It is a response to the idea that happiness can be
                                   purchased. As mindful consumers, people are increasingly challenging this assumption.

                                   Welcome to the World of Mindful Consumption
                                   Some experts believe that when the recession is over, consumers will return to their
                                   spendthrift ways, but I believe that a new age is being born. The post-recession consumer is
                                   different. While they may have been forced by circumstances to reconsider their spending
                                   habits, many consumers have found that less really is more.
Millward Brown: Point of View Post-recession Marketing: Addressing a New, More Mindful Consumer                               2



While they may have been forced by circumstances    This changed consumer mindset is not really a new hurdle for
to reconsider their spending habits, many consumers brands; we have seen the roles that brands play in people’s lives
                                                    evolve over time. In today’s developed markets, brand names
have found that less really is more.
                                                                   were once used to differentiate basic commodity products
                                                                   and provide a promise of consistent formulation and quality,
Data from a variety of sources support this view. A recently
                                                                   but over time they evolved to confer a whole range of other
released survey by the Pew Research Center in the United
                                                                   benefits, including status, emotional well-being, and a sense
States reported that 7 percent of Americans said they have
                        1
                                                                   of belonging. Our current circumstances suggest that many
switched to less expensive brands as a result of the recession.
                                                                   consumers are now ready to ascribe an even higher level of
Also in the United States, a study by Deloitte found that 84
                                                                   meaning to their brand choices.
percent of shoppers were examining their grocery purchases,
looking for ways to save money. Seventy-nine percent said
                                                                   Of course people still need brands to address their basic needs
that they were “smarter” shoppers than they were two years
                                                                   and maintain their standards of living. They still want brands
earlier, and virtually the same proportion (75 percent) said
                                                                   that allow them to indulge themselves occasionally. But in
that the need to reduce spending had made them understand
                                                                   general people are relying less on brands for gratification or
which brands were really important to them. A Sanford C.
                                                                   status and are now factoring other values into their choices.
Bernstein survey conducted last December found that half
                                                                   These include their own moral principles, their loyalties to their
of consumers had not only traded down to less expensive
                                                                   local communities, and their sense of responsibility for the
products but found them to be “as good or better than” the
                                                                   environment.
costlier brands they replaced.
                                                                   Today brands need to craft strategies to address these new
Key pan-European lifestyle trends identified by Millward Brown
                                                                   priorities. They need to position themselves against consumer
research also confirm this phenomenon. Many consumers
                                                                   needs as well as against competitive brands. The approaches
are reclassifying what constitutes a luxury, avoiding impulse
                                                                   will differ according to the product category and the market
purchases, and screening their purchases more carefully for
                                                                   segment within that category, but a few highly successful global
real value. A recent McKinsey report described the way this
                                                                   brands are already showing the way, and other marketers
trend is playing out in Japan, where, according to McKinsey,
                                                                   should learn from these examples.
consumers have long been willing to pay a premium for
convenience. The article cited a MyVoice Internet survey
                                                                   Breaking Through with Emotional Appeals
from September 2009 that found 37 percent of Japanese
consumers had cut overall spending, while 53 percent               In categories where there is little discernible differentiation
declared themselves more likely to “spend time to save             across brands — and in developed markets, this is the state of
money” rather than to “spend money to save time.”                  most FMCG/CPG categories — many of the most successful
                                                                   brands have crafted strong and effective emotional appeals.
The Challenge for Advertisers                                      In the personal care category, Unilever’s Dove brand has
                                                                   accomplished this by taking aim at traditional standards of
While consumer priorities have changed, the basic challenge
                                                                   beauty. Through the “Campaign for Real Beauty, ” as well as
for advertisers is the same: to deliver a relevant message in a
                                                                   viral videos such as “Evolution” and “Onslaught, ” Dove has
creative way. But advertisers need to meet that old challenge
                                                                   redirected the debate on beauty and carved out a unique
using new approaches. They must make their communications
                                                                   space for itself.
relevant to the current concerns of the “new” consumers, who
are now selecting brands for different reasons.




                                            ©2010 Millward Brown
Millward Brown: Point of View Post-recession Marketing: Addressing a New, More Mindful Con-                                   3
sumer



                                                                    The first step in planning a campaign around
                                                                    higher-order benefits is to consider your
                                                                    brand’s readiness. Are your brand’s functional
                                                                    characteristics strong and well known enough
                                                                    that you have “permission” to take your offering
                                                                    to a higher level?

                                                                    places where we can go to truly relax and be ourselves. This
                                                                    campaign, which generated a great deal of attention, showed
                                                                    the different personalities of McDonald’s consumers, adding
                                                                    an emotional layer to the functional benefits that they offer.
                                                                    You not only get good food at a reasonable price, but you
                                                                    can eat what you like, stay as long as you wish, and simply be
                                                                    yourself.

Another premium brand that is succeeding in the new age of          In a time when people feel insecure and at the mercy of forces
mindful consumption is Nespresso. Consumers tend to define          outside of their control, another way for brands to distinguish
Nespresso as a “new luxury brand, ” and even in a time of           themselves is to empower people. Pepsi has recently received
relative austerity, people are not willing to live without a few    a great deal of positive attention for its ”Do Good for the Gulf”
luxuries. Many people have chosen to reduce their expenditure       initiative. The company has invited the public to submit ideas
on gourmet coffee purchased at shops outside the home.              that could help ”refresh” the U.S. states affected by the BP oil
Nespresso has tapped into people’s desire to pamper and             disaster (Louisiana, Alabama, Mississippi, and Florida) and has
indulge themselves by offering them that same high-quality          pledged $ million in grants to support the winning ideas.
                                                                                 1.3
drink brewed at home. An advertising saga was developed             Available for viewing on the site refresheverything.com, the
a few years back to support the premium positioning of the          ideas (which will be voted on by the public during August
brand. To demonstrate the attraction of Nespresso coffee,           201 include helping small businesses pay for accounting
                                                                         0)
the ad agency created stories in which the actor George             help to file damage claims, providing vocational training to
Clooney goes unrecognized and unnoticed in Nespresso                displaced workers, and various fund-raising events in different
stores. The coffee is what is important to the patrons, not the     parts of the country.
endorsement of a celebrity.
                                                                    But for companies that are not so well established and well
People are relying less on brands for gratification
                                                                    heeled as Unilever, McDonald’s, and Pepsi, what is the starting
or status and are now factoring other values into                   point? How can companies that are scrambling for footholds
their choices.                                                      in their markets relate to the new mindset of consumers?

Another example of a brand that has capitalized on people’s         The first step in planning a campaign around higher-order
need to find new and less costly ways to achieve gratification      benefits is to consider your brand’s readiness. Are your brand’s
is McDonald’s. The recent campaign in France, called “Come          functional characteristics strong and well known enough that
as You Are, ” is based on the idea that there are not enough        you have “permission” to take your offering to a higher level?




                                             ©2010 Millward Brown
Millward Brown: Point of View Post-recession Marketing: Addressing a New, More Mindful Consumer                             4



                                                                     Some brands have unique new values built in from the start.
                                                                     The Veja brand of trainers (sneakers) was launched in 2005,
                                                                     featuring fair trade materials (organic cotton and Amazonian
                                                                     wild latex) and ethical labor practices. According to their
                                                                     Web site, www.veja.fr, even though their fabrication costs are
                                                                     seven or eight times higher than those of the competition,
                                                                     Veja products are priced competitively. Their business model
                                                                     is one in which the brand does not advertise and production
                                                                     quantities are tightly controlled.

                                                                     Meaning Must Be Baked In, Not Painted On
                                                                     The lesson to be drawn from these successful campaigns is
                                                                     that the concepts originated from a sense of brand purpose
                                                                     rather than an unrelated creative idea. Instead of simply
                                                                     investing in mere advertising, these brands chose to commit
                                                                     to causes that transcend a brand’s functional purpose and
                                                                     capture their customers’ hearts as well as their minds. The
Most people won’t be willing to trade off quality and efficacy       brands express this commitment in all they do and all they say
for “feeling good, ” so those qualities must be well established.    in every consumer touch point. Going beyond entertainment,
In his recent Point of View on emotion, Nigel Hollis made            the campaigns depict a brand experience that inspires and
this point when commenting on the success of the Unilever            resonates with the ideals people are choosing to live by.
campaign for Persil called “Dirt Is Good”:

    The ads … did not explicitly say that Persil (Omo) will get
    your kids’ clothes clean no matter what they get into.…            To read more about post-recession marketing, visit
    Rather, it presented strong implicit communication that            our blog at www.mb-blog.com.
    you can let your kids get dirty because you can trust              If you liked “Post-recession Marketing,” you might
    Persil to do its job. But it is important to note that it          also be interested in:
    is only because Persil spent many years establishing
                                                                         Shopping: Not about Product or Place, but Interaction
    its functional credentials with explicit claims like “Persil
    Washes Whiter” that the brand can now communicate                    Marketing During Recession: Survival Tactics
    its functional message implicitly.                                   Beyond Trust: Engaging Consumers in the
                                                                         Post-Recession World
One option for a brand that is not yet well known is to build
a higher-level meaning into the brand as it grows. Method is           Share this POV:
an example of a brand that has succeeded in creating a new
segment by combining good product performance and strong
design with an ethos of sustainability. Critical to the company’s
success is its positioning as being not only good for the
environment but also good for personal health. Founder Eric
Ryan says that the company is “deep green” on the inside but
“light green” on the outside. Thus it has broader appeal than
many other environmentally oriented brands.




                                              ©2010 Millward Brown

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Millward Brown - Marketing post-récession : un nouveau consommateur est né

  • 1. Millward Brown: Point of View Post-recession Marketing: Addressing a New, More Mindful Consumer As economies recover around the world, global marketers face new challenges in relating to consumers. A new post-recession era is dawning. Consumers have revised their priorities, and advertising needs to speak differently to these consumers in the years to come if brands are to survive and thrive. New Times, New Attitudes, New Behavior The global recession is just one of many events that have undermined people’s sense of security in the past decade. Terrorism, political instability, global warming, and the degradation of the environment were all looming large as concerns even before financial markets and the government organizations meant to oversee them began to fail. As a result, a mood of mistrust and anxiety developed among many people around the world, Benoît Tranzer Managing Director and that mood sparked a reexamination of priorities and values. Millward Brown France benoit.tranzer@millwardbrown.com www.millwardbrown.com In the face of all these concerns and fears, a new As mindful consumers, www.lesmarquesalaloupe.com consumer attitude began to manifest itself. Many people are increasingly people stopped finding joy in excessive consumption challenging the assumption and heedless spending, and a new trend, which I call “mindful consumption,” emerged. Mindful that happiness can consumption is demonstrated by consumers buying be purchased. fewer products and fewer brands, and being more considered in their choices. Though it is most apparent in mature markets, I expect mindful consumption to eventually affect all global markets — even the emerging ones — because it represents more than just a response to the present crisis. It is a response to the idea that happiness can be purchased. As mindful consumers, people are increasingly challenging this assumption. Welcome to the World of Mindful Consumption Some experts believe that when the recession is over, consumers will return to their spendthrift ways, but I believe that a new age is being born. The post-recession consumer is different. While they may have been forced by circumstances to reconsider their spending habits, many consumers have found that less really is more.
  • 2. Millward Brown: Point of View Post-recession Marketing: Addressing a New, More Mindful Consumer 2 While they may have been forced by circumstances This changed consumer mindset is not really a new hurdle for to reconsider their spending habits, many consumers brands; we have seen the roles that brands play in people’s lives evolve over time. In today’s developed markets, brand names have found that less really is more. were once used to differentiate basic commodity products and provide a promise of consistent formulation and quality, Data from a variety of sources support this view. A recently but over time they evolved to confer a whole range of other released survey by the Pew Research Center in the United benefits, including status, emotional well-being, and a sense States reported that 7 percent of Americans said they have 1 of belonging. Our current circumstances suggest that many switched to less expensive brands as a result of the recession. consumers are now ready to ascribe an even higher level of Also in the United States, a study by Deloitte found that 84 meaning to their brand choices. percent of shoppers were examining their grocery purchases, looking for ways to save money. Seventy-nine percent said Of course people still need brands to address their basic needs that they were “smarter” shoppers than they were two years and maintain their standards of living. They still want brands earlier, and virtually the same proportion (75 percent) said that allow them to indulge themselves occasionally. But in that the need to reduce spending had made them understand general people are relying less on brands for gratification or which brands were really important to them. A Sanford C. status and are now factoring other values into their choices. Bernstein survey conducted last December found that half These include their own moral principles, their loyalties to their of consumers had not only traded down to less expensive local communities, and their sense of responsibility for the products but found them to be “as good or better than” the environment. costlier brands they replaced. Today brands need to craft strategies to address these new Key pan-European lifestyle trends identified by Millward Brown priorities. They need to position themselves against consumer research also confirm this phenomenon. Many consumers needs as well as against competitive brands. The approaches are reclassifying what constitutes a luxury, avoiding impulse will differ according to the product category and the market purchases, and screening their purchases more carefully for segment within that category, but a few highly successful global real value. A recent McKinsey report described the way this brands are already showing the way, and other marketers trend is playing out in Japan, where, according to McKinsey, should learn from these examples. consumers have long been willing to pay a premium for convenience. The article cited a MyVoice Internet survey Breaking Through with Emotional Appeals from September 2009 that found 37 percent of Japanese consumers had cut overall spending, while 53 percent In categories where there is little discernible differentiation declared themselves more likely to “spend time to save across brands — and in developed markets, this is the state of money” rather than to “spend money to save time.” most FMCG/CPG categories — many of the most successful brands have crafted strong and effective emotional appeals. The Challenge for Advertisers In the personal care category, Unilever’s Dove brand has accomplished this by taking aim at traditional standards of While consumer priorities have changed, the basic challenge beauty. Through the “Campaign for Real Beauty, ” as well as for advertisers is the same: to deliver a relevant message in a viral videos such as “Evolution” and “Onslaught, ” Dove has creative way. But advertisers need to meet that old challenge redirected the debate on beauty and carved out a unique using new approaches. They must make their communications space for itself. relevant to the current concerns of the “new” consumers, who are now selecting brands for different reasons. ©2010 Millward Brown
  • 3. Millward Brown: Point of View Post-recession Marketing: Addressing a New, More Mindful Con- 3 sumer The first step in planning a campaign around higher-order benefits is to consider your brand’s readiness. Are your brand’s functional characteristics strong and well known enough that you have “permission” to take your offering to a higher level? places where we can go to truly relax and be ourselves. This campaign, which generated a great deal of attention, showed the different personalities of McDonald’s consumers, adding an emotional layer to the functional benefits that they offer. You not only get good food at a reasonable price, but you can eat what you like, stay as long as you wish, and simply be yourself. Another premium brand that is succeeding in the new age of In a time when people feel insecure and at the mercy of forces mindful consumption is Nespresso. Consumers tend to define outside of their control, another way for brands to distinguish Nespresso as a “new luxury brand, ” and even in a time of themselves is to empower people. Pepsi has recently received relative austerity, people are not willing to live without a few a great deal of positive attention for its ”Do Good for the Gulf” luxuries. Many people have chosen to reduce their expenditure initiative. The company has invited the public to submit ideas on gourmet coffee purchased at shops outside the home. that could help ”refresh” the U.S. states affected by the BP oil Nespresso has tapped into people’s desire to pamper and disaster (Louisiana, Alabama, Mississippi, and Florida) and has indulge themselves by offering them that same high-quality pledged $ million in grants to support the winning ideas. 1.3 drink brewed at home. An advertising saga was developed Available for viewing on the site refresheverything.com, the a few years back to support the premium positioning of the ideas (which will be voted on by the public during August brand. To demonstrate the attraction of Nespresso coffee, 201 include helping small businesses pay for accounting 0) the ad agency created stories in which the actor George help to file damage claims, providing vocational training to Clooney goes unrecognized and unnoticed in Nespresso displaced workers, and various fund-raising events in different stores. The coffee is what is important to the patrons, not the parts of the country. endorsement of a celebrity. But for companies that are not so well established and well People are relying less on brands for gratification heeled as Unilever, McDonald’s, and Pepsi, what is the starting or status and are now factoring other values into point? How can companies that are scrambling for footholds their choices. in their markets relate to the new mindset of consumers? Another example of a brand that has capitalized on people’s The first step in planning a campaign around higher-order need to find new and less costly ways to achieve gratification benefits is to consider your brand’s readiness. Are your brand’s is McDonald’s. The recent campaign in France, called “Come functional characteristics strong and well known enough that as You Are, ” is based on the idea that there are not enough you have “permission” to take your offering to a higher level? ©2010 Millward Brown
  • 4. Millward Brown: Point of View Post-recession Marketing: Addressing a New, More Mindful Consumer 4 Some brands have unique new values built in from the start. The Veja brand of trainers (sneakers) was launched in 2005, featuring fair trade materials (organic cotton and Amazonian wild latex) and ethical labor practices. According to their Web site, www.veja.fr, even though their fabrication costs are seven or eight times higher than those of the competition, Veja products are priced competitively. Their business model is one in which the brand does not advertise and production quantities are tightly controlled. Meaning Must Be Baked In, Not Painted On The lesson to be drawn from these successful campaigns is that the concepts originated from a sense of brand purpose rather than an unrelated creative idea. Instead of simply investing in mere advertising, these brands chose to commit to causes that transcend a brand’s functional purpose and capture their customers’ hearts as well as their minds. The Most people won’t be willing to trade off quality and efficacy brands express this commitment in all they do and all they say for “feeling good, ” so those qualities must be well established. in every consumer touch point. Going beyond entertainment, In his recent Point of View on emotion, Nigel Hollis made the campaigns depict a brand experience that inspires and this point when commenting on the success of the Unilever resonates with the ideals people are choosing to live by. campaign for Persil called “Dirt Is Good”: The ads … did not explicitly say that Persil (Omo) will get your kids’ clothes clean no matter what they get into.… To read more about post-recession marketing, visit Rather, it presented strong implicit communication that our blog at www.mb-blog.com. you can let your kids get dirty because you can trust If you liked “Post-recession Marketing,” you might Persil to do its job. But it is important to note that it also be interested in: is only because Persil spent many years establishing Shopping: Not about Product or Place, but Interaction its functional credentials with explicit claims like “Persil Washes Whiter” that the brand can now communicate Marketing During Recession: Survival Tactics its functional message implicitly. Beyond Trust: Engaging Consumers in the Post-Recession World One option for a brand that is not yet well known is to build a higher-level meaning into the brand as it grows. Method is Share this POV: an example of a brand that has succeeded in creating a new segment by combining good product performance and strong design with an ethos of sustainability. Critical to the company’s success is its positioning as being not only good for the environment but also good for personal health. Founder Eric Ryan says that the company is “deep green” on the inside but “light green” on the outside. Thus it has broader appeal than many other environmentally oriented brands. ©2010 Millward Brown