Yesterday when I posted Craig’s questions about the important of a Brand Name during an Economic Downturn on the Branding & Marketing blog, I also posted it on Facebook, LinkedIn and Twitter. You can read responses to the question in the comment section of the last post, but here are answers I received via social media. The question evoked response from many knowledgable professionals from the self proclaimed branding “novices” … to the person who did her dissertation on this very topic. Almost everyone agrees a strong brand helps in a downturn:
Anita Mobley wrote: It depends on the quality of the product, and you have to supplemnet where there is equal quality from other brand names.
Renato Geribello wrote: Christine,
Cost benefits relationship, customer service and most of all understanding that mass marketing is dying and being replaced by individual marketing.
If a brand, no matter how big or important they are, understands these basic concepts they will make themselves vital on an economic downturn. On a economic environment such as today’s, it is vital for a brand, to be seen as indispensable by the customer.
I am not saying that a brand name is important, but even them must start dealing with the fact that individual needs will eventually dictate who will be a brand name in the future.
Best regards, Renato Geribello
Eugeny Brychkov wrote:
What the brand name is for? It is a word, set of words and/or a picture which are associated with all good and bad could be in our minds about the firm, its products/services and employees. Brand allows firm to differentiate itself from the competition.
Brand is a visibility. If you are highly visible, you have chances to prosper or decay.
Brands are important. And it is even more important HOW they are used, leveraged and increased in value. Brand value is not easily identifiable, and it has a kind of “inertia”: famous firms can be successfully selling poor products for some time leveraging their brands, but at the same time they will have great difficulties restoring their image and brand value afterwards (and rebranding may be a cheaper way to restart operations).
Ivana Taylor wrote:
Hi Christ - funny you should bring this up. I’m currently writing an article for the AMEX Open Forum blog that’s referencing this topic. Here’s a link to a study that I ran across that says that consumers are still spending just as much on “green” eco-brands as they were before — except remember everyone is buying “less”. If that’s the case - consumers have actually reduced their level of purchasing on those brands that do not have an eco-friendly message. WOW
Brands are important all the time - regardless of economic climate. If a brand falls in importance - perhaps it’s because it’s promise or message hasn’t adjusted to the conversations that its customers are having.
Links: http://www.reuters.com/article/pressRelease/idUS207957+09-Feb-2009+PRN20090209.
Appended- Ivana Taylor added the following clarification: OMG (pun intended) I just noticed that I misspelled your name - at least it was in a “god” way…
Bob Budiansky wrote: Great Questions!
I think that having a good brand name and brand image is extremely important, however when the customer gets ready to make the purchase they must also believe that there is quality, value, and great customer service behind the product. In these economic times, you really start to find out if you have a great product or service especially if you are on the higher end of the price scale. If the customer will spend the extra to buy your product, then I would say it’s a good indicator that your customers perceive you well. If you see market share slipping, then it’s time to work on the things under the brand image as well as drop the price!
As times get even tighter and depending on the product being purchased (or how often it is replaced), the customer may have no choice but to make a price buy. Although, this is the time the generic brand can really shine if they truly have a great product and service and can show it; then it begins to level the playing field.
Strictly a novice point of view!
It depends on how stressed the consumer is by the economic downturn. I believe someone with less money to spend might put aside brand loyalty and choose a cheaper alternative to save a few bucks. Anecdotally, I’ve heard some upscale Manhattan restaurants that attract a lunchtime business crowd are suffering in this climate, but McDonald’s is doing well. I don’t think the McDonald’s brand is the decision-making factor here as much as the price. So I’d say brands are less valuable in these times, at least for some people.
Andy Lakatos wrote:
No expert here, but I’d think branded is better during slow times. When times are good, more demand equals more possibilities, for the small guys or non brands ya? So I would reason that solid brands would have the ability to weather downturns better than others.
Rachel Daniel wrote:
Chris! Hello there… I hope this finds you well. I will try to be as parsimonious as possible for you.
This is my dissertation question - I am interested at looking at the impact of economic strain (recession) on brand trust and brand affinity. Empirically, we don’t know the answer to this; however, I can take a stab at what I know and what literature would support.
I think that the “brand” is more important during an economic downturn. Here’s why: brand affinity, loyalty, and trust are built on more than the “name” of the company, rather they are built on the connection that company makes based on its ability to deliver on its brand promise. My hypothesis is that if a brand evokes quality and excellence, goodwill, ethical standards, creates value for the customer, and shows that the company listens and acts when customers speak that the brand will provide consistency, constancy and comfort in a time of economic strife.
We are in a recession. Stakeholders are more sensitive, therefore more likely to judge your brand based on the aforementioned attributes. I’ll point you to an article I wrote on the topic, if you’re interested.
I haven’t seen the deep datasets on the topic, but I can promise to send you literature that’s relevant, as I begin the literature review for the quant portion of my dissertation.
Hope that helps!
Rachel
Links: http://ezinearticles.com/?How-to-Build-a-Strong-Brand-in-a-Weak-Economy&id=2004563
A friend who wants to remain anonymous wrote:
Great Questions!
I think that having a good brand name and brand image is extremely important, however when the customer gets ready to make the purchase they must also believe that there is quality, value, and great customer service behind the product. In these economic times, you really start to find out if you have a great product or service especially if you are on the higher end of the price scale. If the customer will spend the extra to buy your product, then I would say it’s a good indicator that your customers perceive you well. If you see market share slipping, then it’s time to work on the things under the brand image as well as drop the price!
As times get even tighter and depending on the product being purchased (or how often it is replaced), the customer may have no choice but to make a price buy. Although, this is the time the generic brand can really shine if they truly have a great product and service and can show it; then it begins to level the playing field.
Strictly a novice point of view!
Marvin Sable wrote:
Much depends on the nature of the Brand in question. Those who seek and can afford quality will opt for established and proven brands in good and bad times alike. (emphasis on established and proven)
Particularly in hard times logic calls for getting the best value for ones dollars. Therefore one would gravitate toward a brand that delivered both quality and value. (A pure luxury brand might well have a tougher time.)
Brad Hain wrote:
I think strong brands have greater pull in times like these. People tend to go back to tried-and true. I read where church attendance is up, skirt lines are getting lower, and even Playboy is showing more mature woman…hmm, looks like safe and familiar is the trend right now. This plays into the hands of strong brands. Those who continue to hold to their core message will have a better chance to come out of this OK.
Francoise Luca wrote:
Consumers vote for brands with their dollars. In a tight economy they can’t afford to waste their votes or dollars.
The best brands (consumer defined value) will win.
Chad Cook wrote:
Do you think that brands are more important or less important during down economic climates? More - Prestige brands could tend to turn away customers based on a perception of being higher priced. Whereas, more generic or common brands are more likely to attract cost conscious buyers.
Do you think brands are more valuable or less valuable during down economic climates? More valuable compared to generic brands, since a brand implies some standard of quality is met and maintained in order to maintain its name. Generic products are perceived as the leftovers from production of brand items and not maintaining the same quality standards. Of course, this perception is changing as consumer education is improving.
Is there anything about this climate in particular that effects those answers in general? Less discretionary monies tends to reduce pretige buying because the perceived margin matters more. Decisions weighing quality, longevity, etc. come into greater play as discretionay monies decrease and people become more frugal.
Have you ever seen any deep datasets about customer behavior in relation to brands for changes in economic climates in terms of behavioral analytics? Nothing deep, but I did see an article during the last week or so about brand management during tough economic times that had some statistics in it. Can’t recall where I read it though(??)
Wim Ponnet wrote:
Hello Christine, in my opinion in a B2B environment, brands that have proven their value or their market position are less prone to suffer from the current crisis then their competitors who are relatively new to a certain market. To me the opportunity for established brands is there, this being said, cutting down on brand support or investment would be a capital mistake. “Better the devil you know” is the way I would describe the reaction I seem to be getting from the markets at the moment.
Ruth Dean:
I believe that a company’s brand is always vital. In an economic downturn, businesses may be reluctant to pay for the outward symbols of their brands, like logos, brochures and well-designed websites. Yet their brand, which represents their promise to their customers, is really the basis of everything a business does. The brand, of course, is the core of the business, the value it provides, the difference it makes in the life of its customers, and - in the end - the reason why any business has paying customers..
What could be more important than that message, especially in a downturn?
Most of the research I’ve seen on brands doesn’t appear to be of much use.
good,I love this post.