Branding in times of Recession

After years of incredible growth and consumer spending we now find ourselves deep in the midst of a global recession. 2009 looks to be a very difficult year for many consumers, businesses and brands – so what do brands do in these tough times? The initial reaction so far appears to be – cut prices or do nothing! Companies aren’t spending, consumers aren’t buying, no one has credit and fear is ruling the market. In fact the only brands that are even doing remotely well are price players like Walmart, Target and McDonald’s or household essentials produced by P&G and Johnson & Johnson. Value is the word of the moment – or is it?

Value brands do not just compete on price. Although price is important, value brands also deliver a strong brand experience through customer service, quality products, and brand consistency. Businesses today must adapt their operations, marketing and advertising strategies to remain competitive and relevant, but staying true to the brand is fundamental. This is easily said for necessity-based brands that can better weather a recession, and will inevitably use this opportunity for growth at the expense of competitors. But for lifestyle, luxury or experience brands, the most dangerous pitfall will be the temptation to digress from what defines them in favor of value-based messages. Especially for these image brands, upholding what they stand for is what will keep consumers identifying with them – and that means staying on brand. Consumers need to see that brands are both recognizing and adapting to market pressures. But brands are built upon an enduring belief and if customers stop believing, they will stop caring – a fate far worse than any short-term recession.

2008 has already seen the demise of some well-established brands like Lehman Brothers, Mervyn’s, ATA and Aloha Airlines, but also the emergence of new ones like Better Place and Twitter. To ensure their brands survive long enough to succeed in these challenging times, businesses must avoid losing sight of who they are and why their brands matter. In the recent words of Harley Davidson, “If 105 years have proved one thing, it’s that fear sucks and it doesn’t last long. So screw it, let’s ride.”