Marketers ponder their next moves

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Marketers leading the war against recession are moving carefully in deciding what should be done to grab the attention of consumers stunned in the wake of the terrorist attacks and pending retaliatory strikes.

"Most advertising budgets will be reinstated in one way or another," said Rich Hamilton, CEO of Zenith North America, jointly owned by Publicis Groupe and Cordiant Communications Group. "But we need to do what we do best, which is to help clients to convince consumers to buy batteries, buy Cheerios and buy Verizon wireless services."

Experts are split on exactly how to do that, but several expect discounting and promotional incentives will be key to getting people back in stores, car showrooms and real estate offices. "Heavy promotions and dropping prices-that's the biggest thing [marketers] are going to be able to do," said Howard Davidowitz, chairman, Davidowitz & Associates, a retail consulting firm. Mr. Davidowitz also predicted a shift in ad messages away from branding and into hard-sell ads pushing discounts.

For already-stressed retailers, that won't be easy. "Is it possible to get more promotional than it has been?" asked Tom Holliday, president of the Retail Advertising and Marketing Association, adding retailers who had been trimming their ad budgets before Sept. 11 may once again see advertising as a way to move inventory, especially inexpensive one-to-one efforts such as e-mails.

Pam Church, exec VP-director client services, Publicis' Frankel, Chicago, sees marketers relying on bundling, gifts-with-purchase and other offers, along with regional and locally focused marketing efforts to "talk to consumers where they are" as a means to spark sales.

David Sable, president-CEO of WPP Group's Wunderman, New York, is uncertain about the value of promotion in current circumstances. "You could put [up] all the signs and promotions you want, but I'm not sure that's what is going to motivate people today."

Mr. Davidowitz believes food, drug stores and discounters will do well, while department and specialty stores will not. "Who has to go to a mall and visit Abercrombie & Fitch or the Limited or the Gap?" he said. "Everyone in America and the rest of the world is poorer today than they were before" the attack. "I don't see any glimmer of hope through the holiday."

Others see some positive signs. New focus-group studies found the attacks have "brought the country together and there is openness to sharing ideas and communication," said. Tom Hollerbach, president-CEO of Omnicom Group's BBDO West, San Francisco and Los Angeles. "Come holiday, people will want as much normalcy as possible."

In fact, Jim Frain, marketing chief at fast-growing retailer Chico's ,said that in days following the attack, the company's same-store sales began to rebound, particularly in the New York suburbs. He said that offers some encouragement for the holidays.

Marketers appear eager to get back to business. Following initial cause-related efforts supporting the American Red Cross and other relief funds, some are moving ahead with major pushes in the next few weeks.

Microsoft Corp. plans to go forward with two significant global product launches, the $1 billion WindowsXP operating system launch Oct. 25 and the anticipated $500 million Nov. 15 launch of its Xbox video game console. Rival Nintendo Corp. plans a Nov. 18 multimillion global effort for its GameCube, handled by Bcom3 Group's Leo Burnett USA, Chicago.

"People still need things that can make their lives better," said Michael McLaren, exec VP-client service at Microsoft's agency, Interpublic Group of Cos.' McCann-Erickson Worldwide, San Francisco. "You have to stay focused on what your strategy is," he said.

A number of video-game software manufacturers are toning down or tweaking imagery. Activision postponed the release of Spiderman 2 for the Sony PlayStation because the games depicted skyscrapers resembling the World Trade Center, while Electronic Arts redesigned its new Red Alert game packaging which had a skyline ablaze. Sony Computer Entertainment America also postponed the launch of Syphon Filter 3, a terrorist-themed action game.

That fits with the philosophy of Tom Carroll, president of the Americas for Omnicom Group's TBWA/Chiat/Day, who said that going forward, marketers and agencies need to focus on three things: common sense, good manners and sensitivity.

A brand also has strong value in uncertain times. "A brand is a promise and consumers rely on that assurance," said David Murphy, CEO, WPP Group's Y&R Cos., Irvine, Calif. "We always want to know there are things you can depend on. This one thing in their lives they can depend on."

Contributing: Mercedes M. Cardona, Hillary Chura, Tobi Elkin, Jean Halliday, Kate MacArthur, Lisa Sanders and Rich Thomaselli

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