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The Influencers

Building Better Brands: A Case for Selling Products and Developing Brands During Periods of Recession

Innocean Worldwide Canada's SVP, client business, Robyn Gorman, unpacks three strategies for building brands through recessionary periods

Building Better Brands:  A Case for Selling Products and Developing Brands During Periods of Recession

How can we adjust our marketing strategy to exit Covid-19 strong and stay afloat during the recession? That is the question every business is asking themselves right now.

While there is no cut-and-dry solution, there are a few things we can do to help keep our brands relevant and in demand.

Take, for example, Kia Canada, a client of ours at Innocean Worldwide Canada since 2009. In JuneKia reached its best-ever market share of 5.2%, following a 7% increase YOY. Quebec, meanwhile, saw a 54% YOY jump in market share. This was followed by two more record-breaking months of sales in July and August.

Celebrating such a milestone in the middle of a recession wasn’t a fluke. It happened because of Kia’s long commitment to building the brand, its understanding of what consumers needed to hear during the pandemic and its being quick to market with timely messages that helped spark consumer behaviour. Taking this a step further, we can begin to build a strategy for success based around three main principles.

Brands that continue to advertise through recessisions fare better post-recession

Advertising during a recession results in higher sales and increased market share.

According to Kantar Millward Brown, advertisers who reduce their share of voice during an economic downturn suffer greater consequences; they experience lower profits and are forced to regain share later at a higher price in a more competitive marketplace. Research based on a number of scenarios showed that advertisers that decreased investment saw their share-of-market (SOM) decline by 0.2 points. Those that maintained or increased spend saw their SOM increase by 0.5 points. Going against the standard approach of budget cutting placed them in a stronger position when the markets recovered.

When Covid-19 hit many Canadian marketers, including Kia’s main competitors, chose to pause or cut their marketing budget to adjust to the new economic reality. In contrast, Kia continued to spend on advertising throughout the pandemic while maintaining the marketing budget already in place for 2020. Instead, we repurposed those advertising dollars to produce new spots that were more appropriate at the time.

Recessionary periods provide a guide on how to always communicate a brand

Recessions often give us the opportunity to reset our approach and look at the market, the consumer and the brand through a different lens. Consumers are typically more particular with their spending during these times, which means it’s important brands be attuned to their consumers’ needs in order to stay relevant and competitive.

Throughout the pandemic, based on our understanding of consumers’ mindsets, we made the strategic decision to stagger our messaging accordingly.

Early on, we greatly softened Kia’s retail messaging, focusing instead on a non-chest-pounding spot letting Canadians know we are all on this road together. Later, as consumer fears and anxiety began to lessen, we started ramping our retail messaging in phases, starting with new promotions which spoke to Canadians’ financial needs.

As the summer progressed, we continued to pivot, consciously considering what messages were appropriate at each stage. Similarly, in other industries like QSR, pizza chains like Pizza Hut, Domino’s and Papa Johns were quick to shift their messaging to focus on family meals and bundles which appealed to what they knew consumers wanted at the time. 

Speed to market beats out the competition almost every time

At Innocean, we apply what we call a 'quick service retail' mentality. This means delivering increased speed-to-market with relevant retail messaging ahead of the competition.

What gave Kia a leg up coming out of lockdown was that we delivered retail messages that consumers wanted and needed to hear fast. You can have a great offer, but if someone goes to market before you, then your offer may no longer be as appealing to consumers.

Again here, there are lessons to be pulled from the quick-service retail mentality of QSRs, where speed has proven to have a direct correlation with overall retail sales. QSRs have learned how to quickly adapt to changing consumers needs. Take health concerns as an example, as people become more conscious about what they eat, brands like McDonald’s, A&W have been quick to stay on top of these concerns with relevant messaging about new, healthier changes to their menus.

It’s by applying the above principles that we were able to help Kia achieve its greatest sales month ever in the middle of the pandemic. Think of them as a starting point which you can build on and modify to suit your brand and the needs of your consumers.

Remember that building brands takes time and patience. If you think your way through the recession, and apply the above principles, there will be a real opportunity to gain market share and make a difference for your brand in the long term.

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