Warning, the Wolf is at Your Door

by James on December 10, 2008

I am but a poor,  jobbing marketing consultant in the UK forced by cross elasticities of demand to seek work wherever I may.

Today’s guest post is focused on the dichotomy of consumer marketing and was written by Vincent O’Brien – founder of OBICO, friend, colleague and all round interesting fellow.

A couple of weeks ago I was asked by an ad agency to write a short paper on “Innovation in Times of Recession.”  Surely marketers were responding to hard times by innovating, developing new ideas, seeing new ways to effect better relations with their customers?  2000 words by next Friday, please, client coming in. A day or so later someone else in the same agency asked me to write a paper on “Retrenchment of Consumer Attitudes in Times of Recession.”  Surely consumers were going back to old habits, becoming more conservative even adopting the values of previous generations in the face of economic hardship?  2000 words by Monday week, client needs it for her boss.

Luckily I am paid on a retainer rather than an output basis because it soon became clear that my beloved clients had confused the titles of these papers.  The facts seem to suggest that the ululation of wolf at door has created an environment where marketers are retrenching and consumers are innovating.

The scent of starvation means that marketing innovation particularly in retail seems largely to consist in packaging cheap bundles – i.e. repositioning brands as low price offers – “feed the family for a fiver” and “dinner for two for a tenner”  being fine examples of the marketers craft.  The much heralded movement of ad spend to online has slowed as above-the-line ratecards fall faster than a banker’s bonus and, away from retail per se, advertising creative is reduced to a number followed by the legend “% off” without even the courtesy of adding the ever fictional “today only.”  A very senior agency client remarked last week “don’t show me any creative, just tell me how to cut 20% off my budget next year.”

Consumers, on the other hand, are a bit more canny when they hear the cry from the steppes.  Large discretionary purchases – cars, homes, holidays, large electricals – are postponed indefinitely and so there is cash to spend but consumers are using store visits to select potential non-food purchases which are then followed by the domestic pleasures afforded by comparing prices, sorry, researching on the internet.  Food purchases are moving increasingly away to discount outlets and to discounts within mainstream supermarkets and to less processed (and so lower profit) foods.  Store sales are plummeting, major names are queuing up for bankruptcy but consumers still seem to be buying, just more innovatively than retrenching suppliers are selling.  And stroking that wolf a little more carefully.

Hints and tips abound in the professional press but they all seem to concentrate on how the marketer should tighten his belt –to save my reader the travail of reading the hundreds of articles available they boil down to “don’t cut price on high value brands, introduce price flankers instead; but, if you do cut prices, don’t be first” – but this is siege mentality not innovation. Hints and tips in the consumer press abound too – again as a service to your good self they read “don’t buy what you don’t need and compare prices on everything”.

This sounds to me like brands aren’t being sold and commodity products are being bought so perhaps the innovative answer lies in leveraging the brand with all that entails – collegiality, confidence, comfort and communication – rather than the price dropping required by lycophobia, oh and possibly the services of a poor, jobbing marketing consultant from the UK.

Vincent can be reached at Vincent at obico dot co dot uk

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