Before I share with you a story from the New York Times, here's my own two cents. Consumers are not just looking for "bargains", they are looking for "value". And when the economy recovers, people will still be looking for "value". As you apply the information you are about to read to your business, remember that you are building for the long term, not just a short term economic down turn.
An Old Buzzword Is Back: Bargains
AS the year began, consumers started to see a trickle of advertisements that played up brand value rather than attributes like status or prestige. As the economy worsened in the spring and summer, the trickle became a torrent.
Now, as the crisis in finance continues, a veritable tidal wave of ads devoted to saving money is washing over the country.
The list of marketers seeking to draw the attention of budget-conscious shoppers reads like a Who’s Who of Madison Avenue. Among them are Bayer, ConAgra, Home Depot, Kraft Foods, McDonald’s, Nestlé, Procter & Gamble, Toyota Motor, Wal-Mart and Yum Brands.
“Given the economic climate, we’re working on the best way to appeal to consumers,” said Jay Kolpon, vice president for marketing at the Bayer HealthCare division of Bayer in Morristown, N.J.
Recently, Bayer HealthCare began running a commercial by BBDO Worldwide in New York, part of the Omnicom Group, that presents its Aleve line of analgesics as an economical way to get relief from arthritis pain. The theme of the spot: “That’s value. That’s Aleve.”
The commercial is “something that we added to the mix,” Mr. Kolpon said, once it became clear that “tough times” had arrived.
The value spot is running along with a campaign called “Buy one, give one,” which encourages customers to give a package of Aleve to a family member or friend with each package they purchase.
The decision to concentrate on frugality echoes the shifts in the tone and emphasis of ads during recessions in 1973-74 and 1990-1, after the stock market crash in 1987, and after the dot-com bubble burst in 2000-1.
Marketing textbooks suggest, however, that a focus in the short term on pinching pennies could in the long run have a deleterious effect on the images of brands or products by cheapening them.
“You can’t blame people for being edgy,” said James R. Gregory, chief executive at CoreBrand, a consulting company in New York, because “good brands, good companies, like Bear Stearns and Lehman Brothers, are gone overnight, and that’s unprecedented.”
At the same time, marketers must “make sure they’re not destroying brand equity, not destroying everything that made their brands great,” Mr. Gregory said, by “overly discounting, giving everything away.”
“You can communicate your concerns” about the economy, he added, “but let people know what your long-term value proposition is by reinforcing brand equity: ‘We’ve always given great value.’ ”
The KFC restaurant chain, owned by Yum Brands, is taking that tack, according to Peter Foulds, KFC’s vice president for advertising, in Louisville, Ky. A campaign by Draft FCB in Chicago, part of the Interpublic Group of Companies, urges fast-food fans to take “the KFC $10 Challenge”: try to cook at home the equivalent of a KFC Family Value Meal, which costs $9.99, for less than $10.
Research conducted by KFC since the campaign began shows the promotion had resounded well with consumers, Mr. Foulds said, “and put a positive spin on our brand attributes.”
“Nine ninety-nine for that meal is an extremely good value,” Mr. Foulds said of the promotion, which lasts for another week.
Plans for the campaign started this summer, Mr. Foulds said, when KFC began seeing signs that “the economy was tough.” The chain is considering repeating the promotion, he added.
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Mr. Kolpon said the Aleve value campaign was also intended to amplify the usual appeals the brand makes rather than undercut them.
“We’re talking to consumers in today’s environment about great value in the context of our strategic message,” Mr. Kolpon said, which is “excellent efficacy” — that is, Aleve is a better buy because “it’s so strong you use only two pills in 12 hours,” he added, compared with brands like Advil and Tylenol, which call for dosages of two tablets every four to six hours.
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Another value campaign that started recently is for the Bounty brand of paper towels, sold by Procter & Gamble. A commercial by Publicis USA in New York, part of the Publicis Worldwide division of the Publicis Groupe, shows a man talking into the cardboard tube from a roll of towels.
“Attention, shoppers,” the man says. “If you want value in paper towels, I’ve got news. Bounty absorbs twice as much as this bargain brand.”
What follows is a demonstration in which Bounty outperforms a sheet of an unnamed cheaper towel. “So if you’re buying a bargain brand,” the man declares, “you might run out sooner than you bargained for.”
A spokesman for Procter in Cincinnati, Dewayne Guy, said the commercial was in addition to the regular advertising for Bounty and was scheduled to appear through the end of the year.
The idea is to convey that “a superior product and superior performance is a better value to consumers,” Mr. Guy said, “because you can do more with less.”
That theme is echoed in another new value campaign from Procter, for Duracell batteries. Print ads by an agency in Norwalk, Conn., Acme Idea Company, compare Duracell alkaline batteries with the Energizer lithium batteries sold by the Energizer Battery Company.
The ads, which are appearing in magazines like People and Real Simple, carry the headline “These are hardly the times to pay for more power than you need” and conclude with this advice: “Don’t waste power. Don’t waste money.”
A spokesman for Duracell in Bethel, Conn., Kurt Iverson, said he was unsure how long the campaign, which began in the last month, would continue, but said, “I think you will see it go on for a while.”
Well, perhaps until the Dow Jones industrial average stops gyrating 500 or so points a day.
This article has been revised to reflect the following correction:
Correction: October 25, 2008The Advertising column on Friday, about brands that are stressing value and savings in their marketing, misidentified, at one point, an analgesic brand that is promoting a “Buy one, give one” offer. It is
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