2. THE GREAT FEELING GUILTY?
RECESSION HAS consumers are almost
five times
TRIGGEREd
more likely to feel negative
emotions when spending.
A NEW
In times like this you should think before doing
almost everything, because even when you are
doing fine today, you NEVER know how it’ll be
tomorrow.
FRUGALITY. after two consecutive years of
— Carmen, IconoCommunities participant, 4/2009
declining per-capita consumption,
increased unemployment and
faltering consumer confidence,
consumers have begun to
permanently reshape their
consumption patterns. experts
9 in
10
believe that even as the economy
recovers from the greatest conSumerS Say
recession that our country has THEY ARE mORE RESOURCEFUL NOW.
seen in the past half century,
rampant consumerism and over-
spending will be gone for good.
Source: mintel oxygen, “Budget Shoppers report,” october 2010
rockefeller Foundation & yale university, “Standing on Shaky ground”
3
iconoculture, Surviving the recession
2
information resources, inc. 2008
PrIvIleged & ConfIdentIal
PrIvIleged & ConfIdentIal
3. VALUE IS mORE
through an analysis of value-centric brands in young &
rubicam’s Brandassettm valuator, a proprietary research
THAN JUST price.
and insights tool and the world’s largest study of brands,
we found that too much of a low-cost or cost-only value
proposition can end up degrading brand equity. while
communicating affordability is essential for brands in
When consumers define value, tough times, it need not be at the expense of a brand’s
price isn’t even in the top three hard-earned equity. Bav® helped us examine the many
different faces of value and how consumers perceive
factors they consider. value messaging. we uncovered seven distinct paths to
% % % % % %
building value perceptions in a brand.
94 91 87 81 81 67
Product Quality Durability USability Price Multiple
SatiSfaction uses
4
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4. CONFIdENT
7 dISTINCT CHOICES
CHEAP
CHIC
PATHS TO
VALUE
each of these paths varies in its influence on brand
everyday
budget
buys
equity and perception, and each appeals to a different
type of consumer mind-set. Some paths to value can
help a brand differentiate, while others impact how well
the brand is regarded in the marketplace. Which one
might be right for your brand? let’s take a look…
value
with
values
DriverS oF DiFFerentiation
CHEAP
CHIC VALUE
WITH
VALUES RESOURCEFUL
SOLUTIONS
FUN FOR
A STEAL
THE REAL
dEAL the
CONFIdENT real
deal
CHOICE
EVERYdAY
BUdGET
BUYS
DriverS oF eSteem
RESOURCEFUL
SOLUTIONS
fun for
a steal
5. EVERYdAY
%
oF conSumerS
budget 59 ALWAYS LOOK
FOR special offers
BUYS
the most basic form of value and the type that
most people associate with cheap or bargain brands.
low price is the main lure for consumers when purchasing there’s a mood: it doesn’t feel right to
these brands. this path to building value can help drive show things that are overly opulent or
short-term relevance and perhaps trial, but if not balanced steeped in luxury, in light of everything
properly, it can also erode a brand’s differentiation and, going on in the world.
with that, hurt customer loyalty. — Hope greenberg, lucky magazine
THINK
GOOd
THE CONSUmER:
While a good buy can resonate with any consumer,
VALUE
the target who will most likely identify with this value
KEEP IT proposition are those facing economic challenges: they
BE dOWN SImPLE have cut back their spending in the past few years and are
pessimistic about their own financial futures.
TO EARTH
22%
ARE FAR-BELOW-AVERAGE
74%
USE COUPONS
money managers
8
Source: experian Simmons 3
9
PrIvIleged & ConfIdentIal
PrIvIleged & ConfIdentIal
6. %
oF conSumerS
72
SAY IT’S ImPORTANT
FOR A COmPANY TO
ACT SOCIALLY act ethically
RESPONSIBLE
BE
HELPFUL
BE KINd
nobody wants to buy something
SHOW YOU
VALUE
that was made by exploiting
CARE somebody else.
— Jerry greenfield, Ben & Jerry’s
THE CONSUmER:
WITH values those who are likely to connect with this value messaging
are more confident consumers who might be cutting back
slightly after the recession. they attempt to budget and
Brands that stay true to their value Dna while
save money, but have a strong loyalty to brands and want
maintaining a sense of responsibility for
to see them do good.
consumer and community well-being. they
1 in
3 65%
take pride in their products and hold themselves
to higher standards. this value path can help
a brand to stand out from the crowd, as well as
build the brand’s reputation in market. woulD pay more are either
FOR ECO-FRIENdLY AVERAGE OR ABOVE-AVERAGE-
PROdUCTS BRANd loyalists
BE
OBLIGING
Source: new york times, “Ben & Jerry’s Builds on its Social-values approach”
10
experian Simmons 3
11
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7. SHOW YOUR BE
INTELLIGENCE dYNAmIC
ACT
PROGRESSIVE
RESOURCEFUL
solutions out of this storm come new operating
Brands that grow and maintain momentum through models. the ecosystem is going to change.
innovative products and offerings that enable their
users. they’re a smart choice for informed consumers — Brian dunn, Best Buy President
who are looking for a reasonably priced alternative that on the need to innovate retail
during the recession, 12/2008
works. this value proposition can help a brand to stand
out in a respected and meaningful way.
BE A
BE
dARING THE CONSUmER:
as consumers look for more resourceful and smarter ways to
VISIONARY manage their spending, it makes sense that they will in turn
seek out brands that are more resourceful and innovative as
well. Brands that are able to provide consumers with new
solutions for interaction and purchase, while lowering cost,
will quickly earn consumer trust and loyalty across segments.
12 13
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PrIvIleged & ConfIdentIal
8. FUN FOR
a steal SHOW YOUR
ENERGY
these brands bring fun, experiential energy to consumers
at a reasonable price. Brands that go down this path can
often carve out a more differentiated place in the hearts
and minds of consumers. consumers are buying the spirit
of the brand and what it stands for as much as they are
buying the price.
We still consume. We still want to take vacations.
We still want to give the people that we love the
icons of how we feel about them. We just have to
BE do it better.”
FUN
— Paco Underhill, author of Why We Buy: the Science of
FEEL Shopping” nPr, March 2009
FRIENdLY
ACT
SOCIAL THE CONSUmER:
especially in economically trying times, consumers want to
feel like they can escape (even if they can’t afford to). they
are drawn to brands that successfully combine fun, friendly
unique experiences with value. these are consumers who
are good at managing their own money and are looking for
more than just a bargain: they want a good deal that offers
something extra in the user experience.
14 15
PrIvIleged & ConfIdentIal
Source: npr, Shopping in a recession, talk of the nation PrIvIleged & ConfIdentIal
9. %
dEmONSTRATE BE Say it’S worth
PERFORmANCE TRUSTWORTHY
60 PAYING mORE
FOR quality.
confident
CHOICES THE CONSUmER:
everyday brands that are known for their the idea of a confident choice brand resonates most
high performance and durability at a reasonable strongly with confident consumers: out of the entire
price. Quality, durability and safety are central population, they were the least affected by the recession,
to these brands’ value propositions. Brands and while they are cautious and careful spenders, they
that occupy this space are held in higher
BE see the value of quality brands that have a heritage for
esteem than other brands in their respective RELIABLE durability and reliability.
categories, and this esteem ultimately
translates into greater brand loyalty.
SHOW
42%
leSS likely
YOUR TO BE CLASSIFIEd
dEmONSTRATE AS “true savers”
1 in
3
WORTH
qUALITY
have purchaSeD
A CAR IN THE
LAST YEAR
16 17
PrIvIleged & ConfIdentIal
Source: experian Simmons 3 PrIvIleged & ConfIdentIal
10. Solvent is sexy. now when my friends
get together, we talk about money, some
ACT sweet deal that we’ve found or what we’re
GLAmOROUS investing in. It’s like we used to talk about
boys. everybody’s eyes light up.”
BE
CHARmING — Sandra Hanna, los angeles times, 12/2009
BE
STYLISH
FEEL
SENSUOUS
THE CONSUmER:
CHEAP chic
While Cheap Chic can appeal to a wide range of consumers,
the group most responsive to this value proposition cares
about price, but won’t give up their good fashion sense just
for a discount. these slightly younger skewing consumers
still want to save a buck, but won’t do it if they also have to
cheap chic brands deliver stylish fashion without
sacrifice their style.
breaking the bank. these brands are clued-in to
the latest trends, and present a face to the world
1 in
4
that shows it. while they “make the fashionable
approachable” to a mass audience, these brands
can also serve as a badge of honor, celebrating
their customers as both stylish anD smart. conSumerS Say
THEY LIKE TO KEEP UP WITH
BE THE LATEST FASHIONS,
TRENdY even in the recession.
19
Source: experian Simmons 3 PrIvIleged & ConfIdentIal
11. 1 in
3
BE
AUTHENTIC
THE real
BE
ORIGINAL
CONSUmERS LOOK FOR
dEAL
EmBRACE brand names while Shopping.
TRAdITION
Brands that have established credibility and
captured the trust of consumers, often for
generations. consumers purchase these brands
lots of store brands seem fine— but store
because they know exactly what they are getting brand band-aids never seem to have the
for the price. these brands stand out by being same adhesive qualities as the “real” ones.
authentic and true to a core set of beliefs, and I happily pay more for my Band-aids!
consumers show their appreciation for this
consistency through their loyalty. — gracie, new York times Commenter 2/2010
ACT LIKE
THE CONSUmER:
this value proposition will likely not resonate with people
A LEAdER facing extreme financial challenges: some consumers are
turning away from brand names and trying private label
or store brand items. But there is a set of consumers who
have an extreme loyalty to brands that are tried and true
and have stayed the course. While time and longevity are
drivers, even newer brands can adopt this position by
“keeping it real” and fulfilling consumers’ growing desire
for authenticity.
Source: experian Simmons 3
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PrIvIleged & ConfIdentIal
12. value CHEAP
with
values CHIC
WHICH ONE CONFIdENT
IS RIGHT
CHOICES
FOR YOU? everyday
consumers say their spending and saving patterns
will continue, even after the recession ends. with budget
reconditioned mentalities to shop within their financial buys
limits, value will be an increasingly important component
of brand choice. Determining the right strategy for your
brand will depend on your brand’s current equity, the
dynamics of the category in which you compete, and the fun for
value mind-set of the target you are trying to influence.
Because value is more than just low price. having the
RESOURCEFUL
SOLUTIONS a steal
right value strategy can, in fact, be a path to building a
great brand.
the
real
22
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PrIvIleged & ConfIdentIal
