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|MARKETING IN A RECESSION|
Ad Age explores what marketers, media and agencies are doing to survive and even thrive in the downturn.
NEW YORK (AdAge.com) -- So what lessons are out there for marketers in this recession? We looked at 10 brands from a variety of categories -- packaged goods, video gaming, luxury, automotive -- to see who's making it work and who's in need of do-over. What are some basic dos? Offer consumers some assurance (see: Hyundai) in these dark days, make sure those ads are aggressive (offering value? Then say so) and be innovative with your product. What you don't want to do: Be without a unique message and ignore brand-oriented ads (that's you, GM).
GETTING IT RIGHT
It may reside in a commodity category where private label has been making big gains, yet Bounty has been gaining share throughout the downturn. Parent Procter & Gamble reported in January that Bounty's U.S. value share grew 1.5 points to more than 44%. The brand has continued to innovate within its premium product line without ignoring its lower-priced Bounty Basics line. Bounty has also maintained a strong marketing presence and honed its value messaging.
HYUNDAI MOTOR AMERICA
Thanks to its unique Assurance program and aggressive, high-profile ad buys, Hyundai is bucking auto-industry trends. After the automaker came out with a big push behind Hyundai Assurance, sales rose 5% in January and February, as much of the auto industry suffered drastic sales declines. While it's not clear how many people will take advantage of Hyundai's offer to return the vehicle if they lose their job, the offer itself has differentiated the brand from competition. And, more importantly, it's eliminated a major barrier to making a big-ticket purchase: fear.
MILLER HIGH LIFE
Cheep beer is a recession winner, and Miller High Life has capitalized on that. The MillerCoors brand's tone and positioning are perfect for these tight times. And actor Windell Middlebrooks, the lovable beer-truck driver who rails against all things pricey, is a character ready-made for this economy. Most recently, he made an appearance during Miller High Life's one-second Super Bowl ads, which mocked excessive spending, taking a dig at rival and Super Bowl sponsor Anheuser-Busch. Pre-game hype led to a sales increase of nearly 5%, followed by a 9% increase the week after the game.
Though it's endured public-relations mishaps in the past few years, JetBlue seems to have turned a corner in recent months, introducing ads that are the perfect antidote for these dismal times. Its "Happy Jetting" push promotes free unlimited snacks, free DirecTV and other frills as competitors pile on the fees. And it's setting itself apart again with an offer to refund customers who book travel and then lose their jobs. The airline's latest marketing concept, "The CEO's Guide to Jetting," which tweaks corporate titans for excess, is just right for this climate.
With an economic crisis brewing, Xbox announced it would add the ability to watch movies and TV shows through Netflix. Then it dropped the price for its lower-end system to $199. Today, the Xbox website continues to tout value, with messaging such as "Big fun, bigger value" and "Xbox360 gives you more for your entertainment dollar." The strategy has paid off, with the brand heralding 2008 as a "pivotal growth year." So far, 2009 is looking pretty good as well. In February, console sales jumped 53% from a year ago.
GETTING IT WRONG
Last holiday season, De Beers doubled its U.S. marketing budget in the face of gloomy news reports. The diamond purveyor believed -- incorrectly, as it turned out -- that diamond sales would be robust as consumers looked for gifts with enduring value. Worldwide demand for diamonds has softened, however. LVMH, which is in a joint retail venture with De Beers Group, saw profits decline 16% in its watches-and-jewelry division last year. Even more telling, only 1% of 434 retailers surveyed by National Jeweler said De Beers' marketing efforts helped boost sales.
Though the recession should arguably be eBay's time to shine, sales slipped 7% in the fourth quarter. Rival Amazon, meanwhile, has emerged as a recession bright spot. EBay has alienated third-party sellers and been unable to create a unified shopping experience, which has led to an overall decline in visitors. It must be aggressive if it hopes to turn things around. First-quarter expectations are for sales to decline 6% to 18%.
GENERAL MOTORS CORP.
The auto giant all but killed sales of Saturn, Hummer and Saab when it announced the brands were under review in December. Since then, GM has let the news define it. Marketing has been limited to retail-oriented messages intended to drive new-vehicle sales, rather than brand-oriented messages that could change consumers' perceptions of the company. Dealers are clamoring for the latter, given that the former seems to be doing little: Sales across GM's eight brands declined 53% in February from a year ago.
Stein Mart offers department-store merchandise 20% to 60% cheaper, which should be attracting plenty of customers. But in February, same-store sales fell 12%, while rivals TJX Cos. and Ross Stores reported sales were flat to up single digits. Now, Stein Mart has launched a campaign touting "More for less" and "Value is the new fashion chic." The messaging is appropriate, but a dime a dozen in this tough retail environment.
The fast-food category has grown in the past year, but Wendy's has continued to lose share. It has done little to differentiate itself from the competition, which has only become fiercer as the economy has sputtered. Its more-traditional creative, featuring plenty of product shots and an emphasis on women, has failed to boost sales. And though a recent value push -- three sandwiches each for 99 cents -- may be goosing sales, it also does little to set the chain apart from value-minded rivals that already own that space.
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CORRECTION: An earlier version of this story incorrectly identified LVMH as the parent company of De Beers. LVMH is in a joint retail venture with De Beers Group