What is the role of your brand when times get tough?

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The smart money is on a period of increased economic uncertainty in the next little while. There are many reasons:

  • Prospects of increased ‘protection’ in the USA leading to “tit for tat” trade restrictions, which will slow economic activity generally.
  • Tension between America and Russia (and others) affecting markets, and specifically disruption to some sectors of the economy in the Middle East.
  • Continuing confusion over the “Brexit” process and the fact that the EU banking zone may not be out of the woods yet.
  • Little real action to reduce the ever-growing hunger of the American market and government at all levels for debt.

There is some good economic news around too, of course, including faster growth in the USA, steady growth in China and elsewhere in Asia, and relatively stable commodity prices. The stock market looks set to continue to perform well, although there will be more notable ups and downs in the next 12 months which will create nervousness. And in Australia specifically the likelihood of some slowdown or correction in the housing market and the inevitable confusion caused by an upcoming tight Federal election won’t help consumer confidence.

So in times like these, why should you be investing more in your brand?

The answers are clear.

  1. Strong brands traditionally out-compete weaker brands on the stock market. In any “flight to quality”, investing in your brand usually shows up in a more sustained stock price. That’ll keep the Chairman and investors happy.
  2. Consumers, too, tend to trust stronger brands even more than usual when times get iffy. Given a choice among equals, they will plump for the better known brand with positive brand attributes. That should keep sales trucking along nicely.
  3. Your staff are also affected by your brand strength. All the usuals of pay and conditions continue to play their role, but they become less important in testing times. People prefer to stay working for a brand they perceive as stable and strong and staff turnover reducesĀ  (and so the costs involved go down too).

There’s another reason. Weak business managers reduce their investment in branding whenever a few economic clouds appear. But smart ones double down on their brand investment, knowing that studies show that in contracting markets aggressive advertisers increase their market share at a faster rate than those who pull back.

Never is the truism “a strong brand is a strong company” more true than when the sound of gunfire drifts over the economic horizon.

MOPTo review your brand strategy and expenditure levels in a totally confidential “brand health check” just call MOP on +613 9426 5400 or email contact@mo.partners.

We will help you pick through your options, backed by independent insights into your marketplace and we always look to generate actionable plans to maximise your chance of success – which may or may not include advertising and marketing.

You don’t have to switch your ad agency to use our brains. We work comfortably in situations where there is an “agency of record” but you want some additional input to help you make good decisions, too.

In volatile times, it makes sense to access a variety of views from around the market.

As a first step, let’s talk?

 

Author: Stephen Yolland

Director of Creative Strategy and Partner @ Magnum Opus Partners.

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