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Sunday, October 28, 2007

Branding and the coming recession

As the housing market goes, so goes the economy...and things aren't looking good. As BloggingStocks.com notes,
A whopping 65% of Americans now believe that a recession is coming in the next year and 51% believe the economy is doing poorly, according to a Bloomberg/Los Angeles Times survey. Wall Street executives predicted a 37% chance of a recession, according to a Financial Services Forum survey released last week by the Financial Services Forum.
Which kinds of brands will survive the down economy? Not clear, but The Charlotte Observer has some advice about building any brand to survive in a downturn--essentially "going beyond the basics" to "delight your customers," not "just meet their expectations." Even when people don't have money to spend, they have money to spend, and they will spend on brands that offer superior service and a delightful experience.

For brand managers, the question arises, Do you stop spending on the brand in a recession or go full steam ahead? Brandchannel.com, in a 2001 article that still resonates asks this question and has the following response:
Branding is not just a patina to be applied during times of growth. It's a constant maintenance job. Nurture it and you'll always be safe; dismiss it and you'll start to see the immediate effects of decay and neglect.
The article goes on to say that most brand consultants recommend that money be spent more wisely, not necessarily more freely. I agree but caution brands to look carefully at the industry and sector they live in; if people don't want to spend more for brands in that particular area, they should either create intelligent generics or fold up their tents and find a more brand-friendly business.