Top Brands Staying Strong in Downturn

According to Millward Brown’s Top 100 Most Valuable Global Brands of 2009 Report, the top 100 global brands have increased in value by 2% to $2 Trillion over the past year. Despite the global financial downturn, the top brands seem to be immune to the economic turmoil, if you trust Millward Brown’s analysis. Some top brands seem to be excelling in the downturn like Apple and Amazon, while others have tumbled like Disney and Starbucks.

One of the biggest surprises is Apple’s success despite the economic environment. Despite smaller wallets, consumers are still managing to pay for relatively expensive iPods and iPhones which sometimes require expensive AT&T data plans. This supports Millward Brown’s analysis that the top brands are striving. This may be because consumers are looking for the most value for their money. They may sacrifice going to Starbucks for a month and make their coffee at home so that they can afford a new iPhone.

According to the report:

“Customers are not holding their breath during this economic volatility. They are adjusting their coping strategies, while remaining determined to purchase brands that contribute to the pleasure, quality, purpose, and security of their lives.”

One of the biggest questions companies want to know, is whether the recession will cause a lasting change in the way consumers buy. One noticable change is the avoidance of conspicuous consumption as people try not to appear insensitive or greedy. Luxury brands still grew 10% in value, although this can be largely accounted for by growth in demand in China.

“Consumers are not in the mood for greed. And greed is not required for success. Once we are on the other side of the economic slowdown, consumer spending will pick up. But perhaps slowly, as people internalize the lessons of our recent boom and bust history. They will want quality, intelligently created, well-designed products. But they may not want one in every color.”

The study suggests that even when money is tight, consumers will still spend on the strongest brands. Consumers know what they can expect from strong brands and are still willing to pay premiums for this assurance. The exception are brands that are perceived as unnecessary luxuries like a trip to Disneyland or a 4 dollar coffee.

More Magic, Fewer Tricks

by Gaston Legorburu

In doing a search on CMO, looking for some information about chief marketing officers, up popped a story about Disney’s nationwide contest for its first ever Disney Parks CMO – a chief magic official.

The CMO job responsibilities: traveling to Disneyland and Walt Disney resorts to help create magical experiences for guests, participate in events and be a behind-the-scenes wizard with the Walt Disney Imagineers.

More than 1,300 people entered the contest. Peter Yu, one of the finalists, got high marks for his infomercial promoting a fictional CMO College called the Magical Institute & Center for Knowledge, Education & literacY (MICKEY, sort of.) Classes included “How to Whistle While You Work,” and “How to Fastpass Your Way to the Top.” Not bad ideas for we marketers. But it was high school teacher Justin Muchoney who won based on his ideas on how to connect people with the Disney Magic.

His wining idea came down to five concepts that he believes can be shared with people in many ways, big and small:

1. Exuberance.
2. Optimism.
3. Vision.
4. Passion.
5. Innovative Magic.

Explaining why he’s the man for the job, Justin wrote, “It is my supreme goal in life to create unforgettable experiences that draw people closer together. I aspire to build deep and meaningful relationships and to help people experience the awesome wonders life has to offer. I constantly dream up new events experiences or even moments when the people I encounter can join together and share in a memorable adventure.”

Justin may be more experienced in leading the high school marching band, but his concepts are as relevant for today’s chief marketing officer as Disney’s chief magic official. Create experiences for people that are memorable. That they rave about with other people. That they keep coming back to in order to buy more of.

Justin also may be onto something about the potential value of the five concepts to how we think of ourselves as marketing leaders, in shaping marketing strategy, and in creating focus for your people and agencies.

• Be passionate and exuberant about the value your brand is providing to your customers. (If you can’t be – is it you or do you need to improve the brand?)

• Be innovative and visionary about constantly improving the current offering and customer experience. (Blockbuster brought a more innovative approach to traditional video rental stores, but then go eclipsed by Netflix.)

• Above all, be optimistic in believing what’s possible. People follow optimists, get energy from them, want to buy from them and work with and for them.

Many today say that technology has transformed marketing. Personalization. Search. Behavioral analytics. Social media co-innovation. Rebates. Cookies. Mobile marketing. Profiling. It’s amazing what’s possible with technology – and more so every day. So much so that too many of us have gotten caught up in the technology tricks and forgotten about the magic.

Magic is what sets two relatively similar companies apart, and there is always an angle to do this. Marketing magic doesn’t just happen. As Justin knows, someone has to create the magic. I’ve seen the same offers and the same ads and the same placements for two retailers and they performed completely different. One had the magic, the other had none. If you are the brand with magic your cost per customer acquisition cost will be lower than your competition. If you are the brand with magic, people will find you – vs. you having to spend so much to find them.

We can do a lot of tricks with technology today. But technology without the magic – creating the “that was great” customer experience – is just another trick in the big marketing bag of tricks that often weighs us down.

Magic comes before the technology; technology helps deliver the magic.

This article was originally posted at CMO Rants and is licensed under the Creative Commons 3.0 license.

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