Juan Enriquez can give a presentation. Funny and fascinating, Enriquez extracts laughter from an unlikely source: the collapse of our global economy. Then, quoting author Louis L’Amour, Enriquez imagines life after the deluge: "There will be a time when you believe everything is finished. That will be the beginning."
A note of thanks from World Market's CEO reached inboxes across the U.S. last Thursday, August 11, while financial markets around the globe were on a roller coaster ride and London experienced the worst riots in decades. At first blush, World Market's move was unusual and timely. Unusual, because consumers don't typically receive "personal mail" from a corporate leader and timely, because the note acknowledges the current economic woes. Unfortunately, these are the only two "positives." Ultimately, the note is memorable for all the wrong reasons.
Mormons and The Church of Jesus Christ of Latter-day Saints, or LDS - not to be confused with LSD(!) - have been on my my radar screen lately. It has nothing to do with HBO's popular drama Big Love or Mitt Romney's failed presidential campaign. Rather, LDS has embarked on a brand image campaign which, upon a closer look, is much more than a polished, high-gloss initiative aimed at a younger generation of potential disciples. In fact, it is both a timely move for a marketplace in search of answers and a bold competitive move among religious institutions.
Immediate search is compelling. But Twitter has something much more powerful: value-creating disequilibrium in an age of social network equality.
A new paper (paywall) confirms that the most prestigious investment banks get the best talent out of business schools school without having to pay a premium. But the prestige of firms like Goldman Sachs—which helps in hiring—has major drawbacks when it comes to managing retention and compensation over time, according to the study from Wharton professor Matthew Bidwell and co-authors, which looked at MBAs in investment banking. Early hires are high quality and surprisingly cheap. But as they move up the organizational ladder, that prestigious experience makes them extremely expensive to keep.
The long overdue exercise (the last one was in 1990) nearly doubled the country’s economy pushing GDP up to $510bn from $270bn. There is a general consensus among economic analysts and commentators that the changes are merely cosmetic — they certainly do not affect the daily lives of most average Nigerians, and their timing might be politically motivated given the upcoming 2015 elections which are expected to be highly contested. However, from the perspective of managers and CEOs operating in Nigeria, there are some important implications.
There’s been some suggestion that the global “downturn” is upturning. However, for the most part, we’re still being challenged and nothing in the economic news – America’s debt, China’s slowdown, the flat-footed European economy, Britain’s economic woes, commodity trends – suggests a sudden and universal change of fortunes. Austerity is the new normal. It’s not a market trend. It is the market.
Traditional Advertising Just Doesn't Translate to Mobile. And That's a Problem
As the first woman to lead the International Monetary Fund, Christine Lagarde is among an elite group of people determining how money is saved, spent and invested worldwide. It's not the first time she's been a "first." Lagarde was France's first female finance minister, and before that, the first woman to chair the global law firm Baker & McKenzie.
Today we rely on digital monopolies to organize and personalize our reading and shopping experiences. Is that so bad?
Two of the world’s leading consumer goods groups on Tuesday eased fears about an emerging market slowdown but said Europe remained a challenging place to do business.
This piece looks specifically at what a senior marketing executive or CMO should be keeping an eye on over the next year. While trends like wearable tech, are very real and accelerating—this specific consumer behavior may not be relevant to the marketing machine for your particular organization. In contrast, here are six things every CMO or marketing executive should be watching closely this year.
Investing in women creates a multiplier effect for society – including better health and education outcomes, more resilient societies, reinvestment in communities, and greater prosperity. While there has been overall progress globally, women in the Middle East and North Africa (MENA) still face some of the greatest barriers in asserting their economic rights.
Export manufacturing has recently become the unsung hero of the U.S. economy. Despite all the public focus on the U.S. trade deficit, little attention has been paid to the fact that the country’s exports have been growing more than seven times faster than GDP since 2005.
Our world is not what it once was: the situation is more serious, the timing is more pressing, and the fortunes to be made are more astounding.
To be competitive, financial services providers must look to embrace new technologies and find innovative ways to cater to today’s connected customer.
For the time being, America remains the destination of choice in the global economy. But talented individuals can now also find very attractive opportunities in other countries around the world.
This month, the chief executive officers of America's biggest companies went on a media blitz to decry the uncertainty caused by the fiscal cliff. In such uncertain times, they say, they are hesitant to invest in the US economy.
Why can the U.S. government borrow at some of the lowest interest rates ever, while Spain can only borrow at exorbitant rates that threaten to drive it into bankruptcy? The difference isn't their debt and deficits. In 2011, U.S. debt was 98% of GDP, its deficit 10% of GDP; Spanish debt was 69% of GDP, its deficit 8.5% of GDP. The difference is that the United States has its own money, the dollar, while Spain operates on foreign money, the euro.
This year, Mary Meeker brings her famous annual Internet Trends report to D10, where she just appeared onstage. Meeker, a partner at Kleiner Perkins Caufield & Byers and former financial analyst, is describing what she calls “the re-imagination of nearly everything” powered by mobile and social, with a torrent of slides tracing what was then and what is now.
While there are many theories for the underlying reasons for the the riots — social inequality, the economic crisis, gang culture, opportunism and the failings of capitalism to name a few — but there is little doubt that technology and social media were the great enablers of the rioters and the criminality that ensued.
The economy is faltering and consumers are scared, but you wouldn’t know it by watching television, where advertisers are still pouring in money.
Starting next week, mum's the word on luxury in Beijing. After April 15, any company that puts up a public advertisement in China's capital city using the adjective -- or a few other flowery phrases like it -- will be fined around $4,500. The municipal government says on its website that such words induce hedonism and spiritual emptiness. The state media cites the growing gap between the rich and the poor.
A temporary wall slices the Anchor Blue store here in half. On one side are abandoned dressing rooms, a few mannequins and no customers. On the other are racks jammed with clothing and accessories — and more customers than ever coming into the store. Anchor Blue is among a growing number of retailers thinking small — chopping off big chunks of stores or moving to more efficient spaces. The change reflects two trends in the retail world: Chains looking for new ways to cut costs in the sour economy, and consumers demanding a less sprawling shopping experience as they spend with greater purpose.
So was the Gap's logo debacle really a debacle, or was it a clever sleight of hand? In response to my post last week, some of you said: wait a second — what if this was a genius move by the Gap, garnering a boatload attention with minimum effort?
Among the signs that marketers are feeling somewhat better about the economy is an increase in advertising by airlines, an industry that is particularly vulnerable to the ebbs and flows of consumer spending.
As the world faces recession, climate change, inequity and more, Tim Jackson delivers a piercing challenge to established economic principles, explaining how we might stop feeding the crises and start investing in our future.
The results of Latitude Research and Shareable Magazine's The New Sharing Economy study released today indicate that online sharing does indeed seem to encourage people to share offline resources such as cars and bikes, largely because they are learning to trust each other online. And they're not just sharing to save money - an equal number of people say they share to make the world a better place.
If you want to be a 21st century company (or economy), if you want to survive and thrive during this Great Stagnation, you've got to to have the courage, foresight, and determination to step up to a higher rung on the ladder of innovation. It's time to master what I sometimes call "I-squared": the art and practice of institutional innovation.
Two years after the economic crisis, executives’ confidence has returned—albeit tenuously—suggesting a better ability to cope with and manage economic volatility.
Waleed Al Mokarrab Al Muhairi discusses Mubadala’s double bottom line, bridging investment and development.
Despite stalled economic recovery, online display advertising has shown impressive vigor in 2010, according to a new report issued by the yield optimization firm the Rubicon Project. According to the report, CPMs jumped an average 25 percent in Q2 of this year versus Q1 among Web publishers within the Rubicon 20 Index, a group of 20 publishers within the news, gaming, finance and entertainment categories, which Rubicon deems as “premium” brands. The company does not say which sites are part of the Rubicon 20 Index, but its more high-profile partners include NBC Universal, Time Inc. and Gannett.
About an hour south of Seoul, bulldozers are demolishing the last vacant factories at Samsung Electronics Co.’s Suwon campus, erasing signs that South Korea’s most valuable public company once made its headquarters in a smoke-fuming industrial complex. In their place are ice cream and pizza parlors, research labs and open space that’s been groomed as parks. Engineers in T-shirts play basketball on this sunny June morning before heading to their choice of nine cafeterias for a free lunch featuring Korean, Indian and Western dishes prepared to please employees from 50 countries. Women, who until recently were forced to wear conservative business suits and were absent from top jobs, stroll through gardens in slacks and formerly banned open-toed shoes, Bloomberg Markets magazine reports in its October issue. The 28,000 engineers, designers and marketers who arrive by bicycle or one of 556 company-funded buses at this bustling center could be in Silicon Valley or a technology park in India except for a sign at the eight-lane entrance: Samsung Digital City. The campus, along with required English lessons for managers and research into everything from solar cells to humanoid robots, are part of Samsung Electronics’ mission to vault itself into the ranks of the world’s great innovators and become one of the top five brands.
When Rilla Delorier assumed the post of chief marketing officer of SunTrust Bank in 2008, the banking crisis presented her with an opportunity -- to position SunTrust as a beacon in the storm, through new advertising from Mullen that launched in October of that year with the tagline, "Live Solid. Bank Solid." "The campaign launched based on research that we were doing with clients at the time that showed that people were waking up to living within their means," said Ms. Delorier, who previously was director-marketing for the bank's wealth-management business. "We went from concept to launch in six weeks."
It's 2010, and we still don't know how to describe the archetypal magnates of the next economy. We don't have a word for it, so we resort to awkward neologisms, like "information entrepreneur" or "green mogul." It's as if we're still not quite sure just what kinds of "capital" tomorrow's tycoons will be "ists" of. What are the kernels of tomorrow's prosperity?
There is a story of a young, but earnest Zen student who approached his teacher, and asked the Master, "If I work very hard and diligently, how long will it take for me to find Zen? The Master thought about this, then replied, "Ten years . ." The student then said, "But what if I work very, very hard and really apply myself to learn fast -- How long then?" Replied the Master, "Well, twenty years." "But, if I really, really work at it, how long then?" asked the student. "Thirty years," replied the Master. "But, I do not understand," said the disappointed student. "At each time that I say I will work harder, you say it will take me longer. Why do you say that?" Replied the Master, "When you have one eye on the goal, you only have one eye on the path." This is the dilemma I've faced within the American education system. We are so focused on a goal, whether it be passing a test, or graduating as first in the class. However, in this way, we do not really learn. We do whatever it takes to achieve our original objective.
Mark Anderson, the high-tech industry’s most accurate prognosticator, foresees an economic landscape still under the stress of too much liquidity — and decision makers still in denial.
Consumer spending and personal incomes were flat in June, according to government statistics released on Tuesday, the latest indication that the economy would continue to struggle in the second half of the year. The Commerce Department figures, which were seasonally adjusted, showed that personal income was steady in June, compared with a slight 0.3 percent rise in May. It was the lowest level this year and the first time in nearly a year that personal incomes have not risen compared with previous months.
After the dogged recession and uncertainty of recent years, it seems we're coming out of it in a more hopeful, optimistic mood. So why not focus on positive emotion and happiness in marketing? We've always believed in leveraging "enjoyment" for the consumer brands we work with. Nothing elicits more of an emotional response from people than associations of "enjoyment" with brands.
Stretching marketing dollars became de rigueur for chief marketers in the midst of the recession. But with that frugality also came important lessons, such as the need for risk-taking in order to have greater impact with fewer resources. No one recognizes that better than Julie Cary, exec VP-CMO, La Quinta Inns & Suites, who at the CMO Executive Summit in Dallas talked candidly about how, in the downturn, she came to realize just how much her business is driven -- or not driven -- by consumer confidence.
Brand owners face a "new world order" in which their customers have redefined notions of value and are placing different demands on the products they buy, a study has argued. The Boston Consulting Group conducted a survey of 12,057 people in 14 nations, including Brazil, China, Germany, India, Japan, Russia, the UK and US. It found that while many shoppers thought there was room for optimism in 2010, overall anxiety levels were considerably higher than in the spring of 2007, before the recession had begun to bite.
Should governments accept the dictates of markets? It's the question raging across the econoverse in the wake of demands for austerity from bondholders. But it's the wrong question. The right question is: are organizations and markets making decisions that help make people, communities, and society better off in the long run, by allocating their scarce resources to the most productive uses? The correct role of governance is to shape the decisions of markets, by breathing life into social preferences and expectations. Here's what I mean by that. Once upon a time, markets "wanted" indentured servitude, debtors prisons, and child labor. But those decisions were unacceptable to society, and so governments took on the challenge of shaping them, reforming markets by preventing them from choosing those options.
Solid brand equity that’s carefully built up over years or even decades is, of course, the commodity that every upstart hopes it will one day have. Chances are you still recognize legendary brand names such as Paine Webber or AlliedSignal. The chances are even better that you recall brand names like Handi Wrap from its having been in your own kitchen drawer. Now, I have a question: How can you build brand equity as strong and durable as that enjoyed by these names? Here’s one way: You could just buy it.
Advertising spending in the United States will not begin to grow again until next year, according to an annual forecast from PricewaterhouseCoopers. The 11th annual entertainment and media outlook report, to be released on Tuesday morning, predicts that ad spending will fall 0.5 percent this year compared with last year.
While sales have been strengthening at Nordstrom, executives from the Seattle-based retailer told a group of investors that one of the best lessons it learned in the recession was a savvier balance between its full-line Nordstrom stores and the Rack, its rapidly growing off-price division.
Studying the humanities will give you a familiarity with the language of emotion. In an information economy, many people have the ability to produce a technical innovation: a new MP3 player. Very few people have the ability to create a great brand: the iPod. Branding involves the location and arousal of affection, and you can’t do it unless you are conversant in the language of romance.
Executives are paying more attention to customer service in an effort to increase sales and gain market share in the economic recovery. Drug-store chain Walgreen Co. is training pharmacists to spend more time helping patients with chronic illnesses. Comcast Corp. is putting call-center agents through new training and instructing supervisors to coach their agents more. American Express Co. is expanding a program aimed at getting agents to build better relationships with customers. Just over a quarter of the 1,405 companies surveyed by Accenture late last year said customer service would be the first area they'd increase funding for as the economy recovers. Some companies have begun that practice this year.
The upfront market, the annual mating dance in which ad buyers and major broadcast networks haggle over ad time for the new TV season, is heating up, and could be sold out in a matter of weeks, ad buyers and marketers say. It's a major reversal from last year when talks dragged on through much of the summer in a harsh economic climate.
By all official indications, the Great Recession has very likely ended. But as marketers, we know better than to interpret this to mean we can pick up right where we left off prior to the steep economic slide. Many consumers have readjusted their budgets and some continue to cope with concerns about the security of their jobs. Even those who have not been directly touched are still anxious about the future. Things that once mattered to our customers no longer seem so important to them. That's why we have to reconnect with them in a way that reflects their new reality.
As we look at the global financial crisis and how it has been dealt with, one often asks oneself, “can change really occur in such an interdependent and complicated economic model?” We may be preaching to the choir with this post that many traditional consumer tendencies have to be revamped when we take into consideration global climate change, sluggish economies and conditions of laborers. However, when we actually shop, how do we make decisions that matter?
Despite all kinds of mixed economic tea leaves, a new study of consumer perception from Deloitte indicates that most Americans do believe financial recovery has arrived, and that view is especially strong among affluents. "Consumer confidence is really strengthening," Scott Erickson, a partner in the firm's retail practice, tells Marketing Daily. "And people with higher incomes are more likely to believe we are in recovery."
Though the economy is now hinting at improved conditions ahead, consensus remains that the recession's effects on consumer spending habits will endure beyond the recovery. Much like the Great Depression changed the spending habits of a generation, the current recession has left consumers reaching past the lure of luxury in search of value-driven purchases. While this has been a boon to mass and value-priced retailers such as Target and Amazon, it has left many premium brands swooning.
If you had to name the business age we’re entering right now, what would it be? The Age of Meaning, Proof and Authenticity. In the past, you could largely succeed on reputation, image, pedigree, even performance. That’s not enough any more. Now you have to prove substance and sustainability across the board. From having a clear business vision and a structure that can support and advance it, to creating true and needed value.
The environment for marketers is changing dramatically. Marketing's leadership in driving business success has never been more in demand, and those who have demonstrably begun to expand mindsets, skills and capabilities are setting the standard. The difference this shift makes has never been more evident than during the bleakness of the lingering recession. Businesses whose marketing leaders have embraced its components may not have emerged unscathed, but they at least have found themselves entering 2010 with substantial positive momentum.
A year ago, as television executives prepared for the 2009-10 season, they suffered double-digit percentage losses in advertising revenue because the economy weakened demand among marketers for commercial time. Now, as those executives get ready for the 2010-11 season, they are optimistic for a rebound in revenue, and higher rates, because demand has improved in recent months.
Despite dropping prices, Americans spent more on consumer electronics last year than they did the year before that, suggesting once again that the gadgets are becoming essential parts of people's lives.
Last year was the worst year ever for global luxury goods, with worldwide sales falling 8%. But in a look at the world's most valuable luxury brands, Forbes identifies 10 that are poised to thrive in better economic times. These brands, including BMW and Louis Vuitton, share some qualities that help keep them strong even when wealthy consumers are curtailing spending.
U.S. companies from industrial giant Caterpillar Inc. to apparel maker Guess Inc. are plowing money back into their businesses at a rate that demonstrates growing confidence in the economy's recovery, but still leaves questions about its strength.
A year after the major television networks slashed advertising rates amid a dismal economy, advertisers are poised to boost spending on commercials for the coming TV season. Last-minute ads are fetching much bigger premiums than they were a year ago. Both buyers and sellers of commercial time say the yearly "upfront" market for commercials could see higher prices per viewer, and greater overall spending.
Green, that is, as in greenbacks, bucks, samoleans, moolah, lucre, bread, lettuce or dough. Contests and sweepstakes with large cash prizes are becoming more popular among marketers and media companies that seek to capture the attention of consumers who are still worried about the economy. The trend began soon after the start of the recession in late 2007 and a year later had attracted the likes of Frito-Lay, Sony and Volkswagen. The jackpots seem to have grown since then, as evidenced by a recent contest sponsored by the SoBe Lifewater line of beverages sold by a unit of PepsiCo. The contest, centered on the men’s national college basketball tournament, offered a first prize of $9 million — paid out over 40 years, but still, $9 million.
America has become a nation of penny pinchers. The economic meltdown was the 500-pound catalyst, but even amid signs the economy is picking up, many of us still are pinching away. It's a trend that analysts say reflects a seismic — and perhaps lasting — change in our spending habits, and retailers are responding. Our demand for deals is forcing high-end retailers such as Whole Foods and Starbucks— whose growth symbolized recent boom times — to change how they do business.
Improved customer targeting and conversion via analytics, enhanced digital marketing structures and capabilities, greater alignment between marketing and sales, and greater accountability will be the leading strategic mandates for marketing in the year ahead, according to the just-released fourth annual "State of Marketing Report" from the CMO Council. These directives are seen to support overall corporate priorities, which are now shifting from cost control/preserving market share in a troubled economy to growing share, increasing top-line growth and enhancing brands/products as the economy improves.
Wall Street moved higher on Wednesday after better-than-expected first-quarter results from Intel and JPMorgan Chase helped to stoke hopes about the global recovery. Increased corporate spending reported by Intel provided further evidence the economy is slowly but steadily recovering. Stocks have been rising in recent months on encouraging signs of growth.
As wary Americans start to crack open their wallets, household-goods makers like Procter & Gamble Co., Colgate-Palmolive Co., Kimberly-Clark Corp. and Clorox Co. are cranking up their advertising, hoping to coax consumers farther out of their shells. Amid signs of an improving economy, recent survey data show consumers are more willing to splurge by eating out or buying new shoes, but the same doesn't necessarily hold for everyday household goods.
Even as prospects for the American economy brighten, consumers are about to face a new financial burden: a sustained period of rising interest rates. That, economists say, is the inevitable outcome of the nation’s ballooning debt and the renewed prospect of inflation as the economy recovers from the depths of the recent recession.
Layaway was a big hit with consumers when the economy tanked, and it still is. Kmart, which is part of Sears Holding Corp., has observed that consumers use the option—which lets shoppers gradually pay for items they want to purchase—year round. The shift reflects America's increasing focus on value, as well as careful, planned spending, said Kmart chief marketing officer Mark Snyder. But value isn't the only focus for Kmart. Using digital and social media, the retailer is prompting teens and younger consumers to shop at its stores. Selena Gomez is launching an exclusive line of teen clothing in Kmart in July, and Jones Apparel Group’s GLO jeans and accessories recently hit stores.
Wal-Mart Stores Inc. is cutting prices on thousands of products in an aggressive campaign to reinforce its reputation as a discount leader, as the company seeks to reverse months of slowing U.S. sales. The world's largest retailer was a rare beneficiary of the economic downturn, as large numbers of bargain-hungry Americans, including many middle-class families, flocked to its supercenters from supermarkets and specialty clothing stores.
Hennes & Mauritz raised hopes of recovery in the European retail sector on Thursday with a better-than-expected 45 per cent rise in first-quarter net profits. The Swedish fashion retailer said the strong results came in spite of continued economic weakness during the December-February period but it reported signs of improvement in the market at the start of the second quarter.
Welcome to...the Roaring Teens? More than a few investors I've spoken to recently think that because consumption appears to be skyrocketing upwards again, all's well that end's well. And on the basis of that conclusion, they're ready to pump capital back into the same old industrial era assets and businesses. Would that it were so. A slightly deeper logic suggests a very different conclusion.
American consumers are finally coming out of hiding. After months of penny-pinching amid the recession, new figures — showing an improving job market, rising factory output and increased retail sales — suggest that consumers are no longer restricting their budgets to necessities like food and medicine. They are starting to buy clothes, jewelry and even cars again.
Despite a laggard economy and tepid ratings for the sport in 2009, advertisers are returning to Major League Baseball telecasts for the coming season, which begins this week, and baseball’s TV rights holders are close to selling out commercial time on their first few months of games, both at the national and local levels. Buoyed by a doubling in automotive ad dollars and a 75 percent hike in financial advertising compared to this time last season for its Saturday afternoon games and two prime-time contests, Fox is virtually sold out for April and May. Turner has taken in 15 percent to 20 percent more ad dollars than it did last year for its Sunday afternoon MLB games.
The premise of this essay is that the explosive growth of mobile communications can be a powerful tool for addressing some of the most critical challenges of the 21st century, such as promoting vibrant democracies, fostering inclusive economic growth, and reducing the huge inequities in life expectancy between rich and poor nations. The benefits of mobile communications are particularly profound for developing countries, many of which are “leapfrogging” the traditional fixed telecommunications infrastructure. As a result, billions of people in developing countries are gaining access to modern communications of any sort for the first time.
The markets tumbled, retirement savings dissolved, and home values evaporated as every principle and presumption about individual investing was called at least into question, and more likely to account. Now financial services firm Vanguard is promoting the answer: stop investing, and start Vanguarding. It bought a four-page magazine spread to reveal this crucially useful insight (I saw mine in the latest issue of The New Yorker), and the story unfolds as follows
I am always surprised that no one much bothers to tell the story of capitalism. No, the stories we prefer to tell our children is that capitalism is a dangerous, soulless, relentlessly exploitative exercise. Indeed, this story is so preferred as our received wisdom, that it is exceedingly rare to hear anyone recite Adam Smith’s magical insight, that good things can and do come from people pursuing their own, sometimes narrow, objectives.
Wall Street investors were cautious on Tuesday after reports brought into focus the steep hurdles facing the housing market and consumers. Shares opened higher but lost momentum midday as financial stocks suffered. Bank of America fell 1.5 percent and Citigroup dropped 2.4 percent.
Fortified waters and sports drinks saw steep volume declines last year, while the carbonated soft-drink category saw some rebound amid declines as consumers continue to shun packaged beverages. Overall, the beverage category declined 3.1% in volume in 2009. A year ago, the beverage category saw volume drop by 2.1%, the first decline on record. "The challenged economy is undoubtedly the single greatest factor that's impacted the performance of refreshment beverages in each of the last two years," said Gary Hemphill, managing director-chief operating officer at Beverage Marketing Corp. "It's possible this could continue into 2010. It's a little bit premature to say, but it's not beyond the realm of possibility."
General Mills Inc. posted a 15 percent higher profit for its third quarter, thanks to strong sales of some established cereal brands and new products such as Chocolate Cheerios. The maker of Yoplait yogurt and Nature Valley granola bars also lifted its 2010 adjusted earnings outlook on Wednesday, but the forecast was shy of Wall Street's expectations. Shares fell $1.22 to $72.35 in morning trading
So the Dow hit a bull-market high last Wednesday and gas costs more than $3/gallon. You know what comes next, don't you? It's not a question of if but rather when we'll all be complaining about falling stocks and rising gas prices. We should be particularly aware of this inevitable reality since most of us are still smarting from the wounds we received over the past year or two. You'd think that the branding brain trusts at big financial services firms and oil companies would have gotten together and recognized these facts -- the context of reality in which their brands exist -- and modified both their business operations and marketing accordingly:
In May 1979, a one-year old, bucolic ice cream company named Ben & Jerry's gave away ice cream cones to acknowledge their customers' loyalty. Ben & Jerry's, now a leading maker of premium ice cream and frozen yogurt and a division of Unilever, carries on the tradition today. March 23 is "Free Cone Day" from 12 - 8 PM at more 360 locations spread across the United States. Call it coincidence, but today Starbucks also gave away a free pastry until 10:30 AM, with the purchase of a drink. After a tough 2009, Starbucks is looking at different branding strategies to adjust to changing spending habits and increased competition. Clearly, these venerable brands are on to something.
The recession, while not officially declared over, is over in the minds of many consumers. For marketers, this means it's time to pay more attention to what the consumer is saying and not what the media is reporting. For while the media feeds the country a steady diet of anxiety-inducing news of record job losses, mortgage defaults, out-of-control credit-card debt, the collapse and corruptions of financial institutions, and a host of other economic doom-and-gloom scenarios, consumers surprisingly are moving forward.
As US equity markets recover and consumers regain a bit of their swagger, shoppers are abandoning Wal-Mart's US stores in droves. The discount giant, which posted healthy US same-store sales gains in four of the first six quarters of the Great Recession as millions of cash-strapped shoppers traded down from department stores and other higher-priced chains, was considered to be among the biggest beneficiaries of the economic slowdown. Now shoppers are dropping Wal-Mart like a bad habit. In fact, the Bentonville, Ark.-based chain is likely to post, for the first time in its history, four straight quarters of same-store sales drops. Coincidentally, the S&P 500 Index is up in each of those quarters. It's an odd relationship America has had recently with the low-price titan.
Until the late 1980s, you could clearly see the difference between the business and public sectors. Business was fast-moving, productive, and focused exclusively on profits. The public sector (government, nonprofits, foundations) was slow and unresponsive but full of people who cared about the world and its people. With the emergence of the citizen sector, all that has changed.
In today's world of endless choice and prolific product options, brands are confronted with the challenge of gaining mindshare and market penetration. Combined with a stalling economy, many brands have addressed this challenge by rethinking the way they have always done business, altering their core product or trying to attract customers through promotions, giveaways and campaigns. Yet one of the best strategies, if thoughtfully prepared and executed, remains one of the most visible and well-known in the food industry: co-branding.
Amway, the privately owned global direct sales company, known for its network of salespeople who sell vitamins, beauty products and other household staples door-to-door, is launching an estimated $25 million ad campaign that pitches its "positivity." Two 30-second TV commercials, created by Omnicom Group unit Element 79, portray Amway as a benevolent company that creates jobs for those in need, makes eco-friendly and good-for-you products and improves communities. "We help people build better lives, build their own businesses, and together, build better communities," a voiceover says in one spot that breaks Monday.
Walmart topped the list of the most valuable retail brands in the U.S., followed by Target and Best Buy, per a new report issued by Interbrand today (Thursday). The report, compiled by Interbrand Design Forum—a division of the global brand consultancy, ranks retailers based on the value of their brands. The ranking is based on a number of factors: financial forecasting, the percentage of sales and profit that can directly be attributed to branding, and brand strength. These form a net present value, or the economic value of a brand.
Increasingly turbulent labor negotiations are threatening to knock U.S. airlines off their recovery course just as the battered industry starts to emerge from a deep recession. Airlines slashed pay and benefits over the past decade, often during stays in bankruptcy court. Now, their restive workers are pressing for wage increases, in some cases by double-digit percentages.
The recession is forcing cash-poor consumers to stick to the basics when they shop, according to a list of the most valuable U.S. retail brands as ranked by Interbrand. In its 2010 list no-frills retailers, including Dollar General, Family Dollar, AutoZone and other retailers that sell necessities, rose in this annual ranking of 50 brands. Many top retail brands that sell niceties consumers can do without in hard times, including Avon and Polo Ralph Lauren, fell on the Interbrand list.
Despite improvements in the global economy, chemicals, retail banking, consumer packaged goods, engineered products and services, oil and gas, and technology still need to transform.
Over the last few months, I've discussed in depth the tectonic shifts rocking the macro and micro economy. Let's put it all together. Here's what the 21st century demands from firms of all stripes: a paradigm shift in the nature of advantage. The past of advantage was extractive and protective. The future of advantage, on the other hand, is allocative and creative.
The budding, 3D light-emitting diode (LED) TV category is about to get a blast of advertising from Samsung. The leading TV maker this week unveiled its largest marketing campaign for the launch of new 3D LED television sets. (Rival Panasonic rolls out a similar product this week.) Samsung's ads, by CHI & Partners, London, will run globally. They show a street team installing TVs in unexpected public places, and consumers, as a result, cherishing the depictions of real life as they're captured on the screens. The U.S. version of the campaign, via Leo Burnett, kicked off with a spot called “Wonder,” during Sunday’s Academy Awards. It shows a family bringing home the “wonder” of 3D entertainment. Brandweek chatted with Samsung CMO Sue Shim, who explained why a downturn is actually a good time to launch pricey, but innovative products. (Samsung's 3D LED TVs start at $1,700.) Excerpts from that conversation are below.
Most wealthy Internet users in the US are optimistic about the economy going forward, according to Ipsos Mendelsohn, and their online spending has historically been higher than average. That should make them attractive to retailers, which are increasingly turning to social networks to attract customers. But will affluents be as receptive to social marketing as other Web users?
Consumers appear to be slowly returning to big-name brands after fleeing to lower-cost, private labels in the past year. Store brands rose 3.2% at retailers for the four-week period ended Feb. 20, according to a Thursday report released by Credit Suisse analyst Robert Moskow. Such brands account for about 20% of unit sales of food. Figures exclude sales at Wal-Mart Stores Inc. But the increase is down from a 4% gain in January and an about 6% gain, excluding dairy, last July. At the same time, branded-food unit sales rose 2.4% for the February period compared to a 0.2% decline for the four weeks ended Jan. 23. Mr. Moskow said the gains in part could be due to shoppers stocking up on items before and during the recent winter storms.
U.S. consumers haven't stopped pinching pennies, but two months of sales gains show that they are in better shape than feared and have begun the year with a return to more normal buying habits. After spending much of 2009 in a defensive crouch, shoppers braved bad weather and took to the malls in February, snapping up spring merchandise at close to full price. Hard-hit teen retailers, including American Eagle Outfitters Inc. and higher-priced department store chain Nordstrom Inc., both of which reported big sales drops a year earlier, reported sharp improvements from a year ago. The results, on the heels of similar gains in recent months, signal consumers, even if they aren't returning to free-spending ways, are giving up the ultra-frugal habits of last year.
Corporate America is emerging from the worst downturn since the Great Depression smaller and thriftier. To survive, companies have laid off millions of workers, closed hundreds of factories and vacated acres of office space. Like those who grew up in the Depression and still reuse sheets of aluminum foil, the experience has left them financially conservative and wary of risk. The road to recovery will likely be marked by slow and steady acceleration, rather than speed. Some companies will see opportunities to amass undervalued assets or steal customers. But it is unclear if their efforts will create enough new jobs to spark broader economic growth
Women are starting to buy clothes for themselves again, an encouraging sign for retailers as spring approaches. A new report suggests that women, middle-income ones in particular, finally are feeling good enough about the economy that they will splurge on a piece of clothing. The women's apparel market slowed its decline to 3 percent in the fourth quarter from a year ago, better than the 5.1 percent drop in total U.S. apparel sales, according to NPD Group.
As we make our way through the challenges of the global economic crisis, high-impact performers are in demand. I'm speaking here of the indispensible workers who are willing to do what it takes to help the company succeed even in the most difficult of times. Those who pick up the slack when the organization is forced to cut back; those whose ideas save time, money, and effort; those with a positive outlook who help keep the organization moving forward.
Financial crises stink. In their wake, public debt explodes. Nations default. Economic growth falters. Taxes rise. Unemployment lingers. The current financial crisis is no different. The U.S. will have to produce 10 million new jobs just to get back to the unemployment levels of 2007. There’s no sign that that is going to happen soon, so we’re looking at an extended period of above 8 percent unemployment. The biggest impact is on men.
Imagine a young Karl Marx alive today: a radical-minded, straggle-bearded intellectual who wanted to make the world a better, more just place. He blogs, presumably. He's among the millions fed up with the party knockabout. What might Karl seize on as the great issue in economics and politics? I'm beginning to think it might be advertising.
After throwing a Hail Mary in the Super Bowl, Audi is going for the two points, with a pair of spots to air during the Winter Olympics' Friday evening opening ceremonies. The new ads, via AOR Venables Bell & Partners, are directly competitive with Lexus, BMW and Mercedes-Benz vehicles.
Hypercompetition — and hypercollaboration — is accelerating. The people formerly known as consumers are now your peers. Regulators have a keener eye and a longer arm. Stakeholders went from being hippie pacifists to shark-toothed activists. In this world, mere innovation and "strategy" are commodities. Globally, naked consumption must transition into durable investment. Meaning is the new cornerstone of advantage: Does what you produce actually make anyone meaningfully better off?
U.S. consumers didn't let snow or frigid temperatures stop them from shopping in January. And if they couldn't get to the malls, there was always the Internet. Retail sales increased a larger-than-expected 0.5% last month, more than recovering a 0.1% loss of December. Sales might have increased even more if not for the lack of inventory. The latest retail data suggest real gross domestic product is on a solid track, even though February's storms cut into business activity. The January shopping gain was broad-based, with sellers of sporting goods, books and music, general merchandise stores and Internet retailers posting increases in excess of 1%. Internet sales have soared 12.4% over the past year.
In Davos, signs of recovery for the economy — but it's not the same old world.
Not so long ago, financiers ruled the roost at the glitzy annual gathering of the global economic elite here in the Swiss Alps. At this year's gathering of the World Economic Forum, the unofficial theme seems to be, "First, kill all the bankers." The ire directed at bankers from all sides is palpable, acknowledged Donald Moore, chairman of Morgan Stanley in Europe, as he stood alone reading some charts amidst the hubbub at the forum's Global Village cafe. Asked which other groups of people have been similarly unpopular in Davos in the past, he said: "terrorists."
Modern capitalism can be broken down into two major eras. The first, managerial capitalism, began in 1932 and was defined by the then radical notion that firms ought to have professional management. The second, shareholder value capitalism, began in 1976. Its governing premise is that the purpose of every corporation should be to maximize shareholders’ wealth. If firms pursue this goal, the thinking goes, both shareholders and society will benefit. This is a tragically flawed premise, and it is time we abandoned it and made the shift to a third era: customer-driven capitalism.
Apparently, half-naked models aren’t enough to entice customers anymore -- at least in the case of upscale retailer, Abercrombie & Fitch. Their once-enticing skimpy image is now resulting in nothing more than skimpy sales. The trendy teen chain has again reported a troubling decline in sales -- 21 straight months of declines, actually, in stores that have been open for over a year. Reports showed a 19 percent drop in December, a month that most retailers depend on to bolster their year-end profits.
Two of America’s best-known companies posted better-than-expected results on Friday, painting a more optimistic picture of the global appetite for everything from hamburgers to healthcare products and services.
You seem different. More anxious. Pensive, perhaps. What's on your mind? A lot of people desperately want to know. Market researchers always want to get inside the heads of consumers, and they've never been more curious than they are now. In the aftermath of a wrenching recession, Americans are saving more, spending less, and rethinking many of the tenets that have governed middle-class living for the past 40 years. Vast amounts of money are at stake, as consumer-product firms try to guess how Americans will spend their scarce dollars in the future.
Whether in the pages of industry publications or at prominent events, there's no question buzz has spiked in recent months about the butting of heads between agencies and procurement. While I understand where the generally negative sentiment stems from, as a procurement professional with extensive marketing experience, I'd like to offer an alternate view: The two functions don't need to -- and shouldn't -- be at odds.
On the desk of Jim O’Neill, chief economist for Goldman Sachs, stand four flimsy flags. They look out of place among the expensive computer terminals of the investment bank’s plush London office, like leftovers of a child’s geography homework or cheap mementos from backpacking trips to exotic parts of the world. But these flags hint at a more interesting story – of the latest way in which money and ideas are reshaping the world. The small scraps of fabric are pennants for big countries: Brazil, Russia, India and China. And almost a decade ago, O’Neill decided to start thinking of them as a group – which he gave the acronym Bric.
Those entering the workforce now will likely make less and save more—not just in the short term but for the rest of their lives.
Farewell and good riddance to the Decade of the Zeroes, when many people felt reduced to nothingness after two big economic bubbles burst. Welcome to the 2010s, a chance for a fresh start — sort of. The year opens with four trends that gained momentum in the past decade.
A number of retailers raised earnings forecasts Thursday after reporting healthy December sales gains, the fourth month in a row of year-over-year sales increases. Sales for the five weeks ended in early January rose 2.9% compared with the prior year, the best monthly showing since April 2008, according to a Thomson Reuters index of 30 retailers. Total holiday-season sales grew 1.8%, overcoming a tepid start in November with a late surge before Christmas, according to a similar index of 33 retailers by the International Council of Shopping Centers.
A nasty snow storm has immobilized much of the country. Mass transportation is hardly functioning, and retail trade groups are predicting that the cost of a few inches of the white stuff will run into billions in lost business as thousands take a "snow day."
While most CMOs have laid forth their plans for 2010, many are still seeking a way to innovate in a time of uncertainty. Where are the opportunities? With the recent dramatic drops in marketing spending, there has been one category that continues to grow. Throughout 2009 we saw the launch of many national cause-marketing programs (see sidebar: Dawn, H&R Block, Pepsi, Sonic Drive-In) at a time when marketers were watching budgets more closely than ever. With this rise in popularity comes the question: Where is cause marketing headed in 2010? While the rules of a successful cause campaign remain solidified, the category is set to change dramatically in 2010.
General Motors Co. will make money in 2010, its chairman said Wednesday, a bold and surprising forecast for a business that exited bankruptcy proceedings just last summer and hasn't turned an annual profit since 2004. "My prediction is we will be" profitable in 2010, Edward E. Whitacre Jr. told reporters at GM's Detroit headquarters, a sign of rising confidence that also sets a tough benchmark for the still-struggling car maker's employees. "Do we have obstacles in the way? Yes. But we have a good management team and a good plan in place."
'Owners' tempts the young and inexperienced to 'get your share,' and implies that investing can be an expression of one's cultural politics. A tough, tasty steak of a book, Justin Fox's "The Myth of the Rational Market" arrived last fall just in time to explain how and why the smartest economists and best-managed institutions on Wall Street nearly detonated a bomb in the world's underpants.
The first ten years of the new century may go down as the decade to forget. Terrorists attacks, devastating natural disasters, scary increases in CO2emissions, Wall Street scandals and two market crashes. The stock market is down 26% since 2000, median household income is also down, and unemployment is up. The price of oil has more than tripled, health care costs have spiraled out of control and there appears to be no end in sight to corporate bankruptcies and the mass exodus of loyal employees.
We've become a nation of early adopters -- now can the consumer electronics industry lead the U.S. recovery? That's what CE manufacturers (who happen to include a few of the world's biggest consumer marketers) hope for as they gather in Las Vegas this week for the annual Consumer Electronics Show.
Last year, most Americans felt as if they had been hit in the head by a 4-iron. Wall Street nearly collapsed. The economy plunged into its deepest recession in decades. As housing prices sank, many homeowners realized that they owed more on their mortgages than their homes were worth. Millions lost their jobs, and even those who didn’t hunkered down, burying their wallets in the backyard. This year — with more than a few bumps along the way — the situation brightened. With that, here’s a look back at five of the biggest business stories of this year — and what to look for in the next 12 months.
In the 19th and 20th centuries we made stuff: corn and steel and trucks. Now, we make protocols: sets of instructions. A software program is a protocol for organizing information. A new drug is a protocol for organizing chemicals. Wal-Mart produces protocols for moving and marketing consumer goods. Even when you are buying a car, you are mostly paying for the knowledge embedded in its design, not the metal and glass.
Building a brand and building a profitable brand are two different things. Take Sony, for example. If you did a survey, you would probably find that Sony is the world’s most admired electronics brand. Way ahead of whoever might be in second place. Terrific for owners of Sony products. But how about the owners of Sony stock? Does the company make any money? The sad fact is no. Net profits after taxes of Sony Corporation are small. Very small.
As we begin a one-year celebration of the ANA's 100th anniversary, we have created the Marketers' Constitution, which contains 10 essentials of marketing for the next 100 years. Its purpose is to ensure that our industry continues to thrive and contribute to the growth of the U.S. economy and to the well-being of our society.
The global downturn put some U.S. theme parks into bankruptcy and upended grand plans for new ones in the Middle East. But in Asia, a development boomlet is under way, as operators race to roll out parks and add attractions to draw in the region’s growing middle class. A Universal Studios is set to open early next year in Singapore at Resorts World at Sentosa, a sprawling development that includes a casino. Over the border in Malaysia, ground has just been broken on the first Legoland in Asia, due to open in 2012. In Hong Kong, the $750 million redevelopment of Ocean Park is to be completed in 2013, while Hong Kong Disneyland Resort recently began a $465 million expansion project that is to add three areas by 2014. And last month, Disney finally won approval from the Chinese government to build a theme park in Shanghai; it is expected to open in five to six years.
The economy appears to have begun recovering after the worst recession in half a century. But businesses ranging from shoemakers to financial services to luxury hotels don't expect American consumers to return to their spendthrift ways anytime soon. They see consumers emerging from the punishing downturn with a new mind-set: careful, practical, more socially conscious and embarrassed by flashy shows of wealth. Much as the 1930s shaped the spending habits of an entire generation, many companies now anticipate a shift in consumer behavior that persists even after jobs and growth get back closer to normal.
The economy seems to be stabilizing, and this has prompted a shift in the public mood. Raw fear has given way to anxiety that the recovery will be feeble and drab. Companies are hoarding cash. Banks aren’t lending to small businesses. Private research spending is drifting downward. People are asking anxious questions about America’s future. Will it take years before the animal spirits revive? Can the economy rebalance so that it relies less on consumption and debt and more on innovation and export? Have we entered a period of relative decline?
The "new normal" — the idea that when income, credit and confidence return, Americans will not return to our free-spending ways — is an idea on the march, recruiting everyone from PIMCO CEO Mohamed El-Erian to Wal-Mart CEO Mike Duke. It's spreading so fast it threatens to become the new orthodoxy. I believe the argument is flawed.
Major retailers including Target Corp., J.C. Penney Co. and Best Buy Co. are cranking up promotions to avoid a slump after Black Friday and keep customers shopping through what promises to be a difficult season. The weak economy and growing clout of online sellers is upending carefully calculated promotions and positioning retailers' Web sites as the frontline in this year's competition.
They have the books. Now they need the customers. With Christmas less than five weeks away, the two largest booksellers in the U.S. are concerned that the weak economy will keep shoppers from walking in, snapping up best sellers from Dan Brown, Stephen King and Sarah Palin and buying more.
Mirror, mirror, on the wall — who's the fairest of them all? That's the question most economists are asking. Many answer China, a few holdouts contend: America. I'd like to tell you a very different story, that clashes with both orthodoxies. Economic might isn't shifting. It's evaporating. Welcome to the Age of Decline. A new decade's breaking, and in it, people, companies, and countries will have to strategize differently. The story the macroeconomic tea leaves foretell isn't one of power shifting from America to China or anywhere else. It is a story of global economic might everywhere wavering and falling, unable to meet the new challenges of the 21st Century, The Age of Decline isn't just American: it's global, a descent into a new kind of economic dark age - unless different choices are made.
The wretched economy has forced many consumers to, well, consume less, or at least less avidly than they did before the bubble — or bubbles, if you count Wall Street and real estate — burst. What, then, has that meant for the cause marketers, which depend on the kindness of shoppers to raise funds for nonprofit organizations, associations and assorted other doers of good deeds?
General business strategy dictates that there are two ways a business responds to a dramatic downturn in consumer spending. They cut costs and/or discount heavily to drive traffic and lure beaten consumers out of their malaise. Both approaches are easy levers to pull because they have a salient short-term impact. The rub lies in not knowing what the long-term impact of these short-term decisions will be. While the long-term implications of cost-cutting is an article in itself, today many retailers find that their most immediate issue is working their way back out of discount-driven brand-price erosion.
Successful organizations spend a lot of time saying, "that's not what we do." It's a requirement, because if you do everything, in every way, you're sunk. You got to where you are by standing for something, by approaching markets and situations in a certain way. Sure, Nike could make money in the short run by licensing their name to a line of wines and spirits, but that's not what they do.
SALES of vitamins and minerals are projected to grow more than 6 percent this year — to $11.2 billion, from $10.6 billion in 2008 — according to Mintel, a market research firm, and that bump may come not in spite of the economic downturn, but because of it. “Economy-conscious consumers concerned with avoiding illness, and thus avoiding sick days, turn to supplements to maintain good health,” Mintel wrote in a recent report. “People tend to take better care of themselves when there are tough economic conditions,” said Joe Fortunato, chief executive of GNC, the vitamin and supplement retailer. A healthy diet, exercise and supplements “are a way to reduce health care costs down the road,” Mr. Fortunato said.
On Monday, Burberry introduced a social networking site, artofthetrench.com, to encourage people to share their own trench coat stories. It is the latest step by Ms. Ahrendts and her creative director, Christopher Bailey, to build on the brand’s British heritage and trademark plaid with a more modern twist. “It’s our differentiator,” Ms. Ahrendts said. “It’s not so different from what competitors do. Maybe one was born from shoes and another from luggage; we come from a coat. It’s our job to keep that category hot and cool and relevant for all ages.” The step reflects a broader move by luxury goods companies, which have generally failed to figure out how to sell their wares online. Indeed, many have shunned the Web, seeing it as mostly a place for bargain hunters to search for knock-offs or counterfeits.
The recession may be over but companies that cater to consumers believe people are digging in for a long, frugal winter. That's why Clorox Co. is keeping the price steady on a new improved trash bag that grips the top of the garbage can. Clorox says it wants to highlight the bags' "greater value." Similarly, Campbell Soup Co. recently reduced the promoted price of its V8 beverages in some markets to 2 for $5 from 2 for $6. Burger King Holdings Inc. is selling double cheeseburgers for just a dollar. Glimmers of recovery in housing starts, manufacturing and auto sales have yet to reassure many consumers who are spooked by 10.2% unemployment, determined to save more and skeptical of sunny forecasts. The Conference Board recently said its consumer confidence index fell almost six points in October from September.
A group of 1,200 marketing and advertising executives at the 99th annual conference of the Association of National Advertisers in Phoenix are anxious about the economy--but many see opportunity as they look toward 2010. Executives from Walmart ( WMT - news - people ), McDonald's ( MCD - news - people ) and MillerCoors on Friday spoke about how their companies, which sell "value" products, have profited from the recession and changes in their businesses. The takeaway message from these executives: Don't be too distracted by fads and trends--stay focused on customers and the brand basics.
There's constant pressure in business to make things as efficient as possible. In every project, the fat is trimmed, the edges are sanded, and the processes are streamlined. It’s how you bring scale to ideas. It’s how you improve margins over time. But far too often, the uniqueness of an idea gets lost in all the efficiency. I was reminded of this recently when evaluating a couple different bottle designs. One was incredibly unique and differentiated, but inefficient all the way through the supply chain to the retail shelf. Another was über-efficient, but, not surprisingly, too close to the rest of the category.
A broken brand is a business that has no idea where it’s going; has no way of communicating its purpose (since none exists); and therefore cannot align its activities nor inspire its people. It’s in disorder. And this disorder leads to people walking around concluding that no one cares and that no one is in charge. Employees may see problems or opportunities, but they stop complaining and suggesting ideas, since they’re convinced management can’t do anything, or won’t. I’ve read the results of recent surveys, which showed that fewer than 10 percent of employees believe their daily activities are actually related to corporate goals. That’s pitiful.
A year ago, 1,200 executives in marketing, advertising and the media attended an annual conference that by coincidence took place a month after the financial crisis began. Together, they stared into the abyss, wondering what conditions would be when — or if — they met again. The sky has not fallen, at least so far, and most of those executives are now gathering for the 2009 conference. Many of them are saying, “What a difference a year makes.” Others, however, are wondering, “What difference does a year make?”
Leading retailers say October turned out to be unexpectedly solid, with consumers spending more freely than expected. The International Council of Shopping Centers, which tracks leading chains around the U.S., says its index gained 2.1% for the month, the strongest gain in 15 months. And Retail Forward, a consulting company that tracks a slightly different group of stores, says its index saw a pop of 2.3% compared with a 0.9% gain last month and the 3.8% decline in October of 2008.
The important question during a downturn is not whether or not the economy will recover -- it will; it always does. What's important to ask is whether your company will be in position to surge as the economy begins to grow. To a large degree, the level of your success will depend on your marketing efforts and capabilities -- what you have done during the downturn and what you put in place now to win business during the recovery. You will need to make strategic decisions about choosing new media, entering new markets, and positioning products.
The recession has battered some of the nation's biggest companies. Even so, top marketing executives believe social media and behavioral targeting technologies will help them boost business as the economy stabilizes and consumer sentiment improves. A cautiously optimistic group of marketing executives from big companies, including Bank of America, Dell, Hewlett-Packard, IBM, Mercedes-Benz USA and Xerox, gathered in Palm Beach, Fla., at the Fifth annual Forbes CMO Summit late last week. There they discussed ways they can rebuild trust and boost sales at their companies as the economy stabilizes.
Diageo Plc Chief Executive Officer Paul Walsh said the world’s largest liquor maker will see a “long and slow” recovery from recession in its biggest markets, and plans to compensate by expanding in emerging economies. The U.S. and Europe will take more time than Asia to rebound, Walsh, 54, said in an interview at Diageo’s London offices. Countries such as Mexico and Brazil have been “almost business as usual” through the slowdown, the CEO said, adding that China has seen a “sharp, V-shaped recovery” as a result of the country’s $586 billion stimulus package.
By overlooking cuts in research and development, product design, and worker training, GDP is greatly overstating the economy's strength.
A recession seems like a funny time to move your product mix upscale, but Kimberly-Clark Corp. has been doing just that of late, focusing more on premium and super-premium offerings and brands such as Cottonelle, Viva and Huggies Pure and Natural, while watching distribution of its Scott value brand shrink. It's a bold strategy to zag upscale as most of the market, including archrival Procter & Gamble Co., have been zigging more toward value products and private-label sales have been rising.
We will at some point see some sort of significant and sustained uptick in consumer spending and confidence. But everyone in media needs to be aware that what's shaking out right now is not just cyclical economics but a systemic change in the way marketers do business driven by technology. Today brands are creating their own media and engaging in their own dialogues with their consumers and potential customers. That hasn't rendered media companies obsolete. In fact, the largest media companies are still chalking up double-digit operating margins (the top 22 have average margins of 12.8% in the past 12 months, according to the Ad Age Datacenter), TV sellers are doing a very brisk trade, and marketers still look to media-based advertising to bring scale to their efforts, even if those efforts increasingly revolve around direct-to-consumer platforms.
FedEx has begun a global ad campaign touting its reliability and expertise in helping consumers navigate a fast-changing economic landscape, a move that comes as the package shipping industry faces weaker sales brought on by the recession. FedEx and its competitor -- UPS, the world's largest package shipper -- have battled recent earnings slumps as tight-fisted consumers and businesses cut back on spending. The former reported an earnings drop of 53 percent for its most recent quarter, while UPS saw a 43 percent quarterly decrease.
Signs of an improving economy might be in your kitchen or bathroom cupboards. Consumers are showing a willingness to pay a little more to get Colgate toothpaste, Kellogg's Frosted Flakes and Gillette Fusion shavers. That's good news for the economy and the multibillion-dollar companies that make those products and have been battling to keep shoppers from trading down to store brands to save money. Procter & Gamble Co., Colgate-Palmolive Co. and Kellogg Co. all gave upbeat earnings reports and even stronger outlooks for next year on Thursday, a day that also saw the announcement that U.S. gross domestic product rose for the first time in a year.
For some time, the advertising industry seemed ready to write off the fourth quarter, convinced that marketers could not wait to close the books on an annus horribilis. Now, there appears to be hope that things have stopped getting worse — but are they starting to get better? “Client sentiment has stabilized, but remains cautious,” Michael I. Roth, chairman and chief executive at the Interpublic Group of Companies, the giant agency holding company, said on Wednesday. Among the signs of improvement, or at least a bottoming out, are reports in trade publications like Advertising Age that demand for commercial time on television networks is increasing, even if slightly.
Global consumer confidence is rebounding, and in the United States has risen for the first time since 2007, amid signs the world economy is picking up although spending is still restrained, a survey showed on Wednesday. Confidence was highest in India, followed by Indonesia and Norway, and was weakest in Japan, Latvia, Portugal and South Korea, although in Korea it had improved markedly, according to a quarterly survey by The Nielsen Company, conducted between September 28 and October 16.
These days, lots of people ask me: "Phew! So, the crisis is over, right?" Wrong. The real crisis is in the DNA of the industrial economy — and it's just as lethal as ever. Most businesses are socially useless. They're about as useful to society (to paraphrase Gloria Steinem) as bicycles are to fish. Sound controversial? If it does, it only underscores just how out totally of touch with real value we've gotten. (Here, for example, are Paul Krugman, Simon Johnson, and Lord Turner all discussing social uselessness.) What has socially useless business cost just over the last five years? $12 trillion at a minimum. Those are the costs of the various bailout packages for socially useless banks.
7-Eleven is diving further into the private label sector. The convenience chain this week announced the expansion of its 7-Select private label line to include 15 bakery-type snack products. The new products include mini-donuts: Powdered sugar (six-pack and 10-ounce bag), chocolate frosted (six-pack and 10-ounce bag), and crunch (six-pack). The other additions are chocolate cupcakes, gold creme cakes, apple snack pies, cherry snack pies, iced honey buns and glazed honey buns. Several kinds of danishes round off the lineup, including iced cheese, iced cherry cheese, iced apple, and bear claw varieties.
Iceland edged further towards the margins of the global economy yesterday when McDonald's announced the closure of its three restaurants in the crisis-hit country and said that it had no plans to return. The move will see Iceland, one of the world's wealthiest nations per capita until the collapse of its banking sector last year, join Albania, Armenia and Bosnia and Herzegovina in a small band of European countries without a McDonald's. The loss of the golden arches highlights the extent of Iceland's economic demise since the pre-crisis boom years when its "Viking raider" entrepreneurs turned Reykjavik into an international finance centre and launched a buying spree of high-profile European assets.
Noreena Hertz had to seduce Bono. The Cambridge University economist was writing a book on the developing world, and Bono's personal saga of getting the U.S. government to cancel more than $400 million of debt was just the pop-culture bridge she needed to move her ideas beyond the wonkish corridors of academia. After all, Hertz's motive for The Debt Threat -- a deep dive into the debt trap that, she argued, would have global consequences for all -- was to juice the campaign that had been building slowly in activist ranks. The book itself would be a battle cry (a postcard inside made it easy for U.K. readers to urge the prime minister to cancel billions owed by the world's poorest countries), and its release was pegged to hit before the 2005 G8 meeting. Hertz sent Bono an email, unsure if it would find him. To her astonishment, it did: "I'm so glad you got in touch," read the rock star's reply. "I'm a real fan of your work. Bono."
Big companies that sell to corporate customers are growing more bullish about their prospects for 2010, a sign that a revival of business investment could buoy the sluggish U.S. economy in coming quarters. Reporting on results for the latest quarter, bulldozer maker Caterpillar Inc. and hydraulic-parts maker Parker Hannifin Corp. on Tuesday joined a chorus of companies that are saying the worst of the recession is past and customers are buying anew rather than simply drawing down inventories.
We believe marketing communications are already being forced to become increasingly agile, particularly for more youth-oriented brands. In such a fast-paced and dynamic media environment, relevance is increasingly determined in the moment. Recency matters. Audience and attention are fleeting. Fame spikes -- even for the famous. For brands to achieve and maintain fame in this context, communications for certain types of them must make a dramatic shift from highly polished epic launches to a continuous and diverse stream of messaging and content designed to ride hyper-current cultural trends, consumer attitudes and competitive maneuvering. The performance of this diverse activity is continuously monitored and optimized like a portfolio of stocks -- kill the under-performers and reinvest in the ones showing returns. However, this "continuous beta" mentality is a big leap from 18-month planning cycles and dogmatic, rigid testing protocols, despite its more real-time and real-world feedback.
I'm on record as saying that Second Life was not worthy of the hype. I did my due diligence. I wandered the pricey real estate, and came to the conclusion that Second Life was "vapor ville." MIT colleagues like Beth Coleman and Ilya Vedrashko begged to differ. They could see something here that would endure. Well, we have data in hand. They were right and I was wrong.
The world’s largest media markets will return to growth in 2011, according to the latest advertising spending forecast, but with only a “meagre” recovery as emerging markets take a greater share of global ad budgets.
The company last month launched a new advertising campaign to announce that Wachovia Securities had become Wells Fargo Advisors, one of the more recent steps by the fourth-largest U.S. bank to fold Wachovia into its brand since acquiring it last year. Invoking "150 years of financial strength," the campaign sought to reassure Americans that Wells Fargo was on solid footing despite the multitudes of bank closings around the country.
In the 11 years since the dot-com darling went public, the e-commerce world grew up -- but eBay looked stuck in its 1.0 past. Unlike Zappos, which built a name using customer service as marketing, and Amazon, where shoppers can log on and find virtually anything at a clear, set price, eBay didn't control the fulfillment chain. That often leaves its customer service, a component key to branding, at the mercy of its sellers. Moreover, it was riddled with auctions, a type of transaction that has garnered less and less interest from the mainstream consumers who account for much of the $130 billion in annual online-shopping sales.
The quantity of paper consumed by catalogs is daunting. In the U.S., catalogs account for 3% of the roughly 80 million tons of paper products used annually, according to RISI Inc., a forest-products consultant based in Bedford, Mass. That is more than either magazines or books. While a 3% share of the paper market might not sound like a lot, much of that paper traffic is unsolicited, and little of it -- less than 2% by one estimate -- prompts a sale. But catalogs pay. Like so many environmental initiatives, from solar energy to hybrid cars, reducing the impact of catalogs runs into economic realities that favor the old way of doing things.
Google reported a 27% increase in profit in the third quarter, signaling the beginning of a recovery in the search-advertising market. And CEO Eric Schmidt sounded almost emphatic about the worst of the economic downturn being over. Because it is bought in near real-time, search advertising is considered a good real-time proxy for marketer sentiment. The impact of search spending is also extremely measurable; cautious marketers that believe the market hit bottom earlier this year are slowly increasing their search spending as they return to the market.
A four-door Porsche? Really? A sports car with room for four? Really? A luxury car with a name that sounds like a mash-up of Pan American, Panera and “Panamania,” a song once sung by Dorothy Lamour? Really? Porsche Cars North America and its agency, Cramer-Krasselt in Chicago, acknowledge the daunting challenges they confront. To be sure, the recession has decimated demand for cars, particularly higher-price models, and shoppers are loath to spend for anything other than groceries and gasoline.
1) Inconspicuous Consumption: Consumers respond to the social moment by taking consumption into the closet. As when we talk about going to Fred's (in-store restaurant), not Barney's. Or, ask to have new purchases shipped, rather than be seen carrying a branded shopping bag. Or, decide to have shoes repaired and last year's jacket altered. Spending as a covert activity. No bragging rights.
China's economy has positively purred over the past year compared to the rest of the world, with its gross domestic product growth hovering around 8%. But retail stores, airlines and hotels got an extra bump during the first week of October, when the entire country took an eight-day holiday to celebrate the 60th anniversary of the People's Republic of China.
The life sciences industry [herein includes pharmaceutical, biotechnology, diagnostic and medical device companies] plays a critical role in the U.S. economy. Innovative new medicines developed by life sciences companies provide better patient outcomes, improved quality of care, increased life expectancy, and lead to economic gains. Currently, the strengths [e.g. innovation, quality of care] and weaknesses [e.g. gaps in healthcare coverage, high costs and inefficiencies] of the U.S. healthcare system are the subject of great debate. During this period, it is essential for all parties involved to place the importance of medical and scientific innovation at the forefront of the conversation. New medicines should be viewed as investments in the future, not only in patient health – but also in economic recovery and growth.
The American economy is back — or so some of the country’s biggest advertisers are saying in new campaigns. It may be a sign that the recession is ending, or it may be a sign that consumers are sick of hearing about it. While economists and investors study housing starts and gross domestic product predictions to measure economic vibrancy, General Electric, Bank of America and other companies are using commercials to proclaim that America’s future is bright. And that may be something of a self-fulfilling prophecy.
From Domino’s sandwich launch and in-your-face ad campaign to Quiznos attacking at every price point, Subway has had more than its share of competition this year. However, the chain continues to see gains on top of the double-digit growth it experienced last year. Sales may be coming in $5 as a time, but that’s the way Subway wants it. The $5 footlong has given the chain a weapon to battle the recession—one that competitors continue to search for an answer to combat. CEO of the Subway Franchisee Advertising Fund Trust Jeff Moody sat down with Brandweek to discuss the competition, the economy and the chain’s plans for future growth.
A year after the U.S. economy was brought to its knees by the bursting of the housing bubble, credit for consumers is still being aggressively ratcheted back. Total consumer credit outstanding, which includes everything from credit-card debt to loans for recreational vehicles, fell $12 billion in August, or at a 5.8% seasonally adjusted annual rate, the Federal Reserve reported Wednesday. It was the seventh straight month of declines, the longest stretch since 1991. The drop is a stark demonstration of how banks and other lenders are scaling back, owing to their own exposure to the struggling real-estate market. But it also reflects a reluctance by Americans to hold big loads of debt at a time when the job market remains in bad shape and the value of their homes has fallen.
If you have recently searched for "Kenya safari," "gold jewelery," or "insurance price comparison" lately, you are responsible. Responsible, that is, for an article published last week in the Financial Times that claims how these search terms and others like them "suggest that consumer confidence is perking up." According to the FT, search query patterns suggest that "consumer sentiment in the UK is up 6 per cent since the beginning of the year." These figures are based on data from Google's Barometer, which tracks a basket of 50 positive keywords and 50 negative keywords to gauge the health of the overall economy. Created in response to the recession, this type of trend spotting within Google search data is part of a wider effort at Google to demonstrate how patterns in search queries can not only alert marketers to emerging trends but also accurately model real-world phenomena.
In this new era of frugality, well-to-do shoppers have gone into hiding and stowed away their splashy logos. But they may hold the key to a consumer recovery. Affluent shoppers are the most important segment of consumer spending, which in turn drives the national economy. The top 20 percent of the nation's households -- with income of at least $150,000 -- account for 40 percent of all spending, according to government data. That makes them a crucial spoke to any turnaround.
Kansas City Chiefs fans struggling with ticket payments can finance them on a team-issued credit card. Got a dirty windshield? Buffalo Bills boosters renewing season tickets online enjoy a free car wash. Ford Field, home of the Detroit Lions, claims the NFL’s first all-you-can-eat section. Jacksonville Jaguars supporters choose between a dozen ticket packages. The Oakland Raiders even subsidize the train to the game. NFL teams, confronting the worst economy many have ever faced, unveiled a rush of new ticket sales initiatives this offseason that just 12 months ago would have been unthinkable in the country’s most popular sport.
It’s easy to blame a brand bankruptcy on the economy, but it may be more complicated than that. “The brutality of this economy is not only exposing toxic assets, but poorly differentiated brands,” says John Gerzema, author of the best-selling book The Brand Bubble. “Many had a common inability to build strong brand differentiation and lead the consumer forward. Deficits that became that much more apparent in times like these”. Gerzema’s point is well taken. In his book, Gerzema addresses the changing role of the consumer when it comes to assessing brands. He says consumers “are increasingly acting like investors. They have heightened expectations for brands to continuously surprise, adapt, and evolve.” Brands that go bankrupt, Gerzema says, “aren’t evolving, or aren’t different enough to begin with.”
Over the past month, Procter & Gamble has morphed from a CPG giant to a CPG sports giant behind deals with the NFL and the U.S. Olympic Committee. The USOC alliance, which activates for the 2010 Winter Olympics in Vancouver and currently continues through the 2012 Summer Games in London, comes during a period when such companies as General Motors, Bank of America, The Home Depot and Kellogg have ended their marketing deals with the organization. The NFL deal, valued by analysts at $10-15 million per year, includes 13 brands, some of which will be designated as the "official locker room products" of the league. The Olympic deal, valued by analysts at $15-20 million, includes 17 brands such as Secret, Venus, Pantene, Olay, Cover Girl, Tide, Charmin, Pringles, Febreze, Bounty, Pepto-Bismol and Scope.
For one answer to the nation's most pressing economic question -- when will the recession end? -- just take a peek inside the American man's underwear drawer. There may be some new pairs there, judging by recent reports from retailers and analysts, and that could mean better days ahead for everyone. Here's the theory, briefly: Sales of men's underwear typically are stable because they rank as a necessity. But during times of severe financial strain, men will try to stretch the time between buying new pairs, causing underwear sales to dip.
I've been corresponding with Dave McCaughan of McCann Erickson Japan. We have been talking about the "gift economy." As I understand it, the "gift economy" ideas says that we are moving away from direct exchange to something more circular. Instead of trading "exactly this" for "exactly that," we now release things into the world (blog posts like this one, tweets, music, Youtube videos) with the hope that something will return to us someday in the form of some kind of value (revenue, reputation, social capital, cultural capital.) In other words, we gift the world with our efforts, and we do so without expectation or guarantee of a return. Adam Smith would be horrified. I like this idea and what's more I believe in it. But it's not without its problems.
On Monday, Sept. 15, 2008, Lehman Brothers imploded, the world tilted and all the Fiji Artesian water came tumbling off the table, crashing along with the stock market. Suddenly the conspicuous consumer became the conspicuous coupon clipper. Bad if you own a Hummer dealership. Good if you own a real value proposition.
After nearly 20 years with California Pizza Kitchen, CMO Sarah Grover knows exactly what the company's co-CEOs are looking for. Lawyers Rick Rosenfield and Larry Flax established California Pizza Kitchen in Beverly Hills in 1985, eyeing celebrity chef Wolfgang Puck's phenomenal success as he codified California cuisine. The pair developed a casual-dining version of Spago, creating gourmet pizzas with then-surprising toppings such as barbecue chicken. CPK has built a cult following through the years with powerful word-of-mouth marketing.
In 1971, the oft-quoted political scientist Herbert Simon predicted that in an information age, cultural producers (that's designers, but also filmmakers, theater types, musicians, artists) would quickly face a shortage of attention. "What information consumes is rather obvious: it consumes the attention of its recipients," he wrote. The more information, the less attention, and "the need to allocate that attention efficiently among the overabundance of information sources that might consume it." Now we have a wide-ranging discussion about what is and what can't be free (Malcolm Gladwell on Chris Anderson, Virginia Postrel on Chris Anderson), which is basically about the future of profit. Maybe we should be considering a dilemma of a human nature: the future of attention.
There was an attention drought for the longest time. Marketers paid a fortune for TV ads (and in fact, network ads sold out months in advance) because it was so difficult to find enough attention. Ads worked, so the more ads you bought, the more money you made, thus marketers took all they could get. This attention shortage drove our economy. The internet has done something wacky to this situation.
Most companies have turned from feeling paralyzed by the economic shocks of 2008 to plotting response strategies appropriate for today's tough markets. One thing companies need to carefully consider is how to confront the new reality of increasingly value-conscious customers.
With market uncertainty, rampant budget cutting and corporate retrenching, it's safe to say most businesses are content to lay low, stick with the status quo, and go with what they know works. Bold initiatives? Let's save 'em for when the going's really good. Once things turn around, we'll turn our brains back on. Till then, automatic pilot is just fine, thank you very much. Once our balance sheets return to black, that's when we'll once again let our freak flag fly. In other words, most companies are going to be content to focus on tactics aimed at defending market share. Nonsense. Now is the THE perfect time for big ideas.
While other recession-wracked restaurant chains offer meals for as little as $5, Panera Bread Co. has this deal on its menu: a lobster sandwich for $16.99. Panera has been bucking conventional industry wisdom during the downturn by eschewing discounts and instead targeting customers who can still afford to shell out an average of about $8.50 for lunch.
Japan’s trend-chasing office workers and ladies who lunch are giving up Louis Vuitton handbags and Chanel jackets for Zara dresses and Gap jeans, making what was a favourite market for luxury manufacturers into one of their biggest headaches. The downturn is forcing customers in Japan to scale back purchases of luxury goods, accelerating a long-term shift in consumer attitudes, according to a report by McKinsey, the consultants.
Ah, the great comedy teams of history: Laurel and Hardy ... Burns and Allen ... Abbott and Costello ... Manning and Timberlake. Manning and Timberlake? As in the football star Peyton Manning and the singer Justin Timberlake? Yes, according to a humorous campaign for electronics products sold by Sony.
When it comes to this recession, Microsoft CEO Steve Ballmer says it best: "Maybe we should think of today as normal ... as opposed [to] today as the tough times, and yesterday as normal." The pre-2007 economy is gone for years, and some elements might be gone for good. And that means that marketers must adapt to four new, here-to-stay realities.
There are as many opinions about what got us into economic trouble as there are pundits in the world. Most blame the economic debacle on Wall Street, poor regulatory oversight or aggressive no-money-down mortgage lenders. However, what remains overlooked in the financial blame game is not a particular of "who," but "what."
This is going to be a column that focuses on a terrible, tooth-hurting phrase, for which I apologize in advance. But there's no way around it. The phrase is "below the line," as it applies to marketing. It refers, generally, to all forms of marketing that do not involve advertising in specific media. "Below the line" is not Web advertising. It is things such as in-store events, guerrilla stunts that drum up media coverage, and company-built Web sites. A pop-up—a temporary store—showcasing a newish product in a heavily trafficked area? A (very au courant) below-the-line move.
CMOs are feeling better about the economy, but they're not about to spend more on traditional advertising. Such marketers expect an increase in customer activity over the next year, and to shift more dollars toward Internet marketing, per a study released this week by Duke University's Fuqua School of Business in conjunction with the American Marketing Association. Don't expect a surge in offline ad revenue to follow suit—such adverting is expected to fall 8 percent.
Now that the recession is most likely over, it's time to start looking at which companies, institutions, and individuals thrived during this grim period. In the harsh downturn that began in December 2007, success was redefined—flat became the new up, and muddling through became a triumph. In a recession that hit all rungs of the income ladder and ravaged the wealthiest consumer markets—the United States, Europe, Japan—there were very few safe havens. But some countries, such as Peru, managed to grow right through the global recession. And some companies arranged their business so that they resisted the contraction and benefited from trends affecting their industry. Some even managed to make decisions during the trough that brought in more business.
The dollar just isn't what it used to be. But that doesn't mean you can let your competitors and online "entrepreneurs" debase the value of your company's most priceless assets. When the chips are down, brand owners must shore up the foundation of what connects them most with consumers -- the brand -- and not let it crash and crumble in hopes of future -- and costly -- repair.
The downturn is putting a crimp on baby boomers' free-spending ways, and the likes of Mercedes and Starwood Hotels are scrambling to keep up.
How companies are finding creative ways to come up with new products and services faster and more efficiently—with fewer resources.
Crocs were born of the economic boom. The colorful foam clogs appeared in 2002, just as the country was recovering from a recession. Brash and bright, they were a cheap investment (about $30) that felt good and promised to last forever. Then the boom times went bust, and Crocs went to the back of the closet.
The deep discounts that restaurant chains have been offering to lure cash-strapped customers out of their kitchens are coming back to bite them. Restaurant chains ranging from Denny's to Applebee's this year have been giving away food or offering deals to boost traffic slowed by the recession.
While trying to manage the recession, marketers -- particularly those with health and wellness, technology or financial products -- may want to look at targeting male Baby Boomers.
It's almost impossible to escape the constant reminder that we are in a recession. While it's easy to criticize the media for playing up the downturn, marketers in general--and technology marketers specifically--feel obligated to lead with the message, "In these tough economic times..." Enough already!
There is a lot of talk about "green shoots" lately. Is prosperity just around the corner, or is the worst still ahead? For marketers, uncertainty about what's next for the economy poses a conundrum: how to plan for the future when the only thing forecasters can agree on is that the future is murky?
I can remember three major downturns during my career. Each hit most agencies like one of those thunderstorms where everyone makes a mad dash for shelter. Agencies ultimately adapt and develop new business models and positions, but not before embracing more cautious versions of themselves rarely seen in good times. Pretty soon that caution becomes a reality that everybody accepts. What we forget is that there's a flip side to a bad economy. This may be counterintuitive, but just as you must retool your business during a recession, you need to plan for an economic recovery. I think it's time to start planning.
Normally, Charles Schwab would be taking a hiatus from advertising during the summer months, but the current economic climate and a recent uptick in business have prompted a new flight of executions.
Trident is giving recession-addled consumers something new to chew on: “A little piece of happy.” As the economy forces consumers to downshift their materialism a bit, a TV and online push for the brand, launching this month, focuses on small moments of happiness delivered by the brand.
As I’ve mentioned before I like my entrepreneurs risk-taking and a little crazy. Earlier this week on TechTicker, we ran an interview with a guy who fits that bill: Shai Agassi. at the end of the third segment (embedded below), Agassi said something that’s been sticking in my head ever since: America has to start making things or the economy won’t work. He argues you don’t have a country with just a service economy to support it. I’m starting to fear that he’s right, especially spending time last month in China and this week in central Africa, both places where manufacturing and consumer goods industries are being built fresh and in incredibly innovative ways. It’s a bit like what you kept hearing after the dot com bust: When things turn south it’s good to have hard assets to fall back on.
When the economic winds are howling and the weather gets ugly, consumers tighten their grip on brands they are loyal to; they don't run to the label with the lowest price. Brand equity does not lose potency when money is tight. So says Harris Interactive in its latest EquiTrend study.
During the past decade, innovation has stumbled. And that may help explain America's economic woes.
The green movement may be at risk of slowing down, especially within the business community. Many business people hold on to an outdated view of green: the misconception that environmental practices always cost a lot of money. So logically, in this economy they're asking, "Is this really the time for green? Can we really afford it now?"
It was recently suggested by Barack Obama that we should borrow and spend less and save more, not rebuilding the economy on the same sand but instead lay a new foundation for prosperity. It’s not the message consumers, this country, or the rest of the world is used to, particularly in a recession.
As the Internet was taking shape in the late 1980s, an MIT professor named Tom Malone started thinking about how it could change the structure of industries. In a series of papers, he predicted that the big top-down companies of the 20th century would soon "decentralize and externalize" into industry ecosystems.
No doubt about it. The economy is contracting, and it’s a painful process. Businesses, large and small, are going under, impacting jobs and revenues in communities. Brands, even well established ones, are vanishing from the map, leaving us to wonder what’s coming next.
If today's frugality and shrinking markets are the new normal, are marketers ready for it?
Then we will see an economic life closer to our biological environment: smaller companies, richer ecology, no leverage. A world in which entrepreneurs, not bankers, take the risks and companies are born and die every day without making the news. In other words, a place more resistant to black swans.
How Do You Feel About the Economy? is a simple textual interface with the aim to illustrate the current personal mood of New York Times readers in the context of the current state of the economy.
It's no surprise that in this down economy, sales at dollar stores are up. As affluent shoppers "trade down" to buy items priced under a buck, dollar stores are rising to meet demand, stocking fancier goods and even adding food.
When the business pages make no sense, it's time to turn to a philosopher. I recently returned to the HBR articles of Charles Handy, vicar's son-turned-oilman-turned-business-school-professor-turned philosopher, who has raised many questions and made many accurate prognostications about the future of business. Consider what he said, post-Enron, about the erosion of trust.
Is a good education the key to success? There is no doubt that reading, writing and arithmetic are important to get ahead in the world. But what about a college degree? What about a graduate degree? What about an MBA?
The wisdom of the crowds has already been put to work to improve product design, provide personal style advice and resolve marital disputes, so why not use it to tackle the economy, too? In Ireland, a new grassroots initiative is aiming to do just that through a campaign to solicit ideas for economic recovery.
In the pretty Sussex town of Lewes, 10 miles inland from the southern English coast, an interesting experiment is taking place. The hometown of 18th-century reformer Thomas Paine is living up to his tradition of social radicalism by introducing its own currency.
Long after Home Depot has dumpstered its last roll of Tyvek, frayed and unfurling like a forgotten flag; long after Target has baled its remaining Isaac Mizrahi couture collection sweaters for shipment to AAA Closeout Liquidators; long after Walgreens, the Pharmacy America Trusts, has filled its final myeasyconsult.com Vicodin prescription for your neighbor’s 14-year-old son, one business will still be switching on its O-P-E-N sign every day at 9 and off again at 11: Tony’s Pizza.
One way of looking at Mintel's latest data on green shoppers is that hard-core environmentalists are as committed as ever. The Chicago-based market research company says that 36% of consumers surveyed say they almost always or regularly buy green goods. That's unchanged since last year, and considering what's happened to consumer prices as well as incomes in that year, that's pretty impressive. But what is different is that the percentage shows no growth, when in the prior year, it tripled.
You may not know it to look at them, but urban planners are human and have dreams. One dream many share is that Americans will give up their love affair with suburban sprawl and will rediscover denser, more environmentally friendly, less auto-dependent ways of living. Those dreams have been aroused over the past few months. The economic crisis has devastated the fast-growing developments on the far suburban fringe. Americans now taste the bitter fruit of their overconsumption. The time has finally come, some writers are predicting, when Americans will finally repent.
Executives view their economies as bad but, in a change from recent months, do not see them getting much worse. Government actions have helped, many say. Companies are hanging on, and many are taking long-term actions to cope with economic turmoil.
Since the world became aware in the summer of 2007 of an imminent financial crisis, people have asked why so few experts saw it coming. There have been many calls for an early warning system for the world economy – but little has been said about how to build one.
Perhaps you're thinking, "So what if the economy is tanking? At least we've got love!" Alas, the former may be impinging on the latter, if a pre-Valentine's Day Brand Keys survey is any indication.
Thank goodness, now the recession’s here we can forget all that nonsense about corporate social responsibility (CSR) and get back to trying to make some money. Admit it, the thought had occurred to you. There may have been much talk of (newly rediscovered) responsibility in Davos last week. But for most managers the biggest responsibility of all will always be to make a profit and stay in business. The good news is that serious CSR types understand this.
Is “broadband for all” a recipe for recovery, or a boondoggle?
The Snuggie blanket launched nationally on direct-response TV in October, just as the economy was slowing to a crawl, so the timing seemingly couldn't have been worse. However, it turns out the timing couldn't have been better.
As the economy lurches, glossy magazines scramble to downsize a luxury-living message for an anxious readership.
Marketing executives are tired of buzzwords such as Web 2.0, blogs and social networking. They're more concerned about credit availability, housing markets, alternative energy and the trade deficit, according to a new study of top-level marketers.
As with every year, the week between Christmas and New Year's is prime time for weight loss brands. But this year, some are wondering if consumers will put their wallets before their stomachs.
There has been little talk by big media executives of the innovation necessary to create new income to replace the old revenues that will not return in a recovery. A deep, protracted recession is one thing; a permanent digital shift in industry economics is another.
Every year at the Web 2.0 Summit, Morgan Stanley Internet analyst Mary Meeker gives her view of the world, the Web, and the technology industry by quickly going through about 50 slides that illustrate the major trends she is tracking.