Now's the Time to Reset Marketing for Post-Recession

Walmart, Allstate, Hyundai, Others Adjust Messaging, Media in Advance of Upturn

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NEW YORK ( -- You can learn a lot from a clown.

Walmart is running a brutally slapstick and outrageously funny spot showing a dad dressed as a clown at his kid's birthday party. The dad accidentally skewers his foot on a sharp-edged unicorn toy, screaming at the top of his lungs and sending panicked children running for cover.

ALLSTATE: The insurer's CMO Mark LaNeve says people 'are ready to stop being miserable.'
ALLSTATE: The insurer's CMO Mark LaNeve says people 'are ready to stop being miserable.'
The commercial dovetails nicely with the messaging that enabled it to navigate the downturn so skillfully -- the purchase of the costume was made possible by the savings generated by shopping at the everyday-low-price retailer. But at the same time, it's not aimed solely at the low-income consumers that once comprised much of its consumer base. The spot is also gaining viral traction from the higher-income consumer that "discovered" Walmart during the downturn.

In short, it's a guidepost for how to market your way into the recovery. Though there's still widespread disagreement of just when the industry will put the recession firmly behind it, one thing's clear: Whenever it happens, marketers had better be ready. Forward thinkers such as Allstate, Walmart, New Balance, Macy's, Procter & Gamble, McDonald's and Bank of America are already paving the way to recovery by spending on marketing and product innovation, cementing relationships with new consumers and rewarding loyalists who stuck by their brands during the bad times. They are also creating products and messaging that bridge from recession to recovery.

Hyundai, for example, is trying to strike a populist tone as the economy pulls out of recession. Its latest ads promoting its Assurance program, where a car buyer can return the car if they get laid off, all but reference the dichotomy between Wall Street's banking bonuses and the real situation: an image of tall, corporate-looking skyscrapers is accompanied by a voice-over that suggests the economy doesn't turn around until it turns around for all.

"We're saying, 'Things are better, but not great -- so we're going to hold onto this [Assurance program] until it's over,'" said Joel Ewanick, VP-marketing at Hyundai. He added that marketing around the recession has been "incredibly effective for us. [Instead of] ignoring the big elephant in the room -- there are people still out of work, 10% of Americans are still out of work -- we're going to acknowledge it."

So, too, has Allstate, which is on the air with a spot, "The Great Recovery," which refers to the recession in past tense by asking viewers how they'll look back on it. "People are ready to stop being miserable," said CMO Mark LaNeve. He said the company is anticipating that consumers will be re-evaluating their finances and that Allstate is ramping up marketing activity behind discounts for multi-line purchases in order to take advantage of that. After trimming its ad budget last year, the company is plotting an "aggressive" increase for 2010.

Redefining value
A big part of the coming-out-of-recession strategy lies in keeping the value messaging that worked so well in the downturn, but now redefining the meaning of value.

"The economic environment has helped us frame the new direction," said Kim Sharan, Ameriprise CMO and president of Financial Planning, Retirement and Wealth Strategies. "As we're coming out of the recession, people are going back to community, really staying close to their homes and developing deeper relationships. ... It's more about emotional connections and asking 'Does it make you happy?'" Ameriprise is running a $30 million campaign launched last week that centers on its 10,000 local advisors -- and uses some of them in the ads talking about helping people reach their goals -- with the tagline "More Within Reach."

"We are working to more clearly define Macy's value to our customers in a way that isn't focused only on price," said Martine Reardon, exec VP-marketing at Macy's. In order to make sure it's ready to capitalize on any shifts in buying habits, Ms. Reardon said that Macy's is investing in its long-term strategy, which includes the My Macy's localization program.

During the recession, New Balance chose to play up its patriotic heritage, with a "Made in the USA"-themed campaign. But Norma Delaney, senior manager-global advertising and brand strategy, said that the brand will begin to back off of that message as the economic climate changes. "There was a heightened awareness and sensitivity (around 'Made in the USA') because of the economy," she said. "We see it continuing. It's a core tenet of the brand. But it may be more limited to POS or online or it could be an internal facing effort in 2010."

Last year the brand was also very "tactical and transactional" in its messaging, Ms. Delaney said. This year, New Balance will be focused on touting new product innovations and "getting back into the branding space."

Ms. Delaney said the brand relied heavily on print and digital in 2009. In 2010, the ad budget is bigger, though not as big as it was in 2008, and TV is again on the table. "We peeled back in 2009, but we didn't disappear," she said. "There's a great opportunity in 2010 to go deeper and more frequent with our conversations. I think the consumer will be there waiting for us."

Beyond security
The banking and finance industry was arguably the most damaged by the recession, but even its flurry of initial assurances that they were "safe" and "secure," have been evolving to more product and customer-focused messaging. "At the height of the crisis there was a lot of press and some consumer questions about stability," said Meredith Verdone, Bank of America senior VP-brand, advertising and research. "Now they're less worried about that and wondering more how they can move ahead." To that end, it launched a $20 million campaign last week targeted at wealthy Americans and encouraging them to work with a Merrill Lynch advisor to help focus on what matters most.

"Smart marketers would be thinking holistically from a planning perspective having a strategy that really can play in good times and bad," said Andrew Razeghi, marketing professor at Northwestern University's Kellogg School of Management, adding that companies must avoid a "knee-jerk reaction" to the economy by making big changes to pricing, marketing or products. "The question of where to distribute and how to have it available should be somewhat agnostic to the economy."

He pointed to P&G's historical ability to navigate recessions by making "their products more relevant." And indeed, Chairman-CEO Bob McDonald has described the current product pipeline as possibly the strongest in his three-decade P&G career. "Regardless of the economic conditions, we have always tried to win the value equation with consumers," said a P&G spokeswoman, "and value is not just about price, but also about benefits fueled by innovation."

Sanford C. Bernstein analyst Ali Dibadj said that consumers still seem willing to open their wallets for genuine innovation, be it iPhones or Kindles. But he said package-goods and other players need to prove they have innovation of similar value. It's a phenomenon Kimberly-Clark Corp. Chief Marketing Officer Tony Palmer views as an increasing need for brands to prove themselves not just against others in their categories, but against other categories.

"We feel that consumers are really shifting from looking at the value they get from a category to value across categories, and they'll trade off," he said. "That mindset in part is forcing brands to offer innovation that either is -- or at least seems -- bigger than what they've offered in years past. "A lot of innovation has been pretty mundane and has probably actually destroyed value for the consumer to the extent that it's just added more [stock-keeping units] on the shelf and created confusion," Mr. Palmer said. "A more discerning consumer and [retailers] just puts more pressure on us to have innovation that's truly meaningful."

Perfect time for innovation
It's "the perfect time to fill up the innovation pipeline," said Mr. Razeghi. "Now is really the time to launch a disruptive idea in test." He said P&G launched two of its highest-priced products, Swiffer and White Strips, during recessions.

Reckitt Benckiser is launching the first new form in automatic dishwasher detergent since tablets hit the market last decade: a premium-priced Finish Quantum dispenser that holds 12 loads and releases three ingredients to maximize cleaning, said Rob de Groot, the company's exec-VP-North America, Australia and New Zealand. RB's Lysol is also making its first move into hand soap with a motion-activated touch-free dispenser that's a first for home use.

Mr. Razeghi credited McDonald's with some of the most impressive recession-time marketing. "If you look at how McDonald's has navigated through the recession, they're a value brand, but if you look at what they've done at product level, changing and repositioning products like the value menu, there are some good lessons," he said. Without getting into specifics as to how the chain gauges consumer sentiment, McDonald's executives maintain that the chain can generate more value messages when their patrons are feeling strapped, and push pricier items when they feel like a treat. The chain posted 2.6% same-store sales growth in the U.S. for 2009, when most of the industry was flat or down.

Whether it be through transitional messaging, product mix or innovation, the bottom line of marketing your way out of a recession boils down to honing your relationship with the consumer.

Mike Gatti, exec director at the Retail Advertising and Marketing Association, said retailers that attracted new customers in the downturn will need to focus on the new relationships they built with consumers to avoid losing them to their old shopping habits in the recovery. "It's like dating but on a much bigger scale."

Noted Mr. Razeghi: "Now is an opportunity to understand who really are your core customers."

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Written from bureau reports

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