The Value of Value
- 1. discovering the VALUE of VALUE Seven StrategieS to win with value meSSaging in the poSt-receSSion economy.
- 2. THE GREAT FEELING GUILTY? RECESSION HAS consumers are almost five times TRIGGEREd more likely to feel negative emotions when spending. A NEW In times like this you should think before doing almost everything, because even when you are doing fine today, you NEVER know how it’ll be tomorrow. FRUGALITY. after two consecutive years of — Carmen, IconoCommunities participant, 4/2009 declining per-capita consumption, increased unemployment and faltering consumer confidence, consumers have begun to permanently reshape their consumption patterns. experts 9 in 10 believe that even as the economy recovers from the greatest conSumerS Say recession that our country has THEY ARE mORE RESOURCEFUL NOW. seen in the past half century, rampant consumerism and over- spending will be gone for good. Source: mintel oxygen, “Budget Shoppers report,” october 2010 rockefeller Foundation & yale university, “Standing on Shaky ground” 3 iconoculture, Surviving the recession 2 information resources, inc. 2008 PrIvIleged & ConfIdentIal PrIvIleged & ConfIdentIal
- 3. VALUE IS mORE through an analysis of value-centric brands in young & rubicam’s Brandassettm valuator, a proprietary research THAN JUST price. and insights tool and the world’s largest study of brands, we found that too much of a low-cost or cost-only value proposition can end up degrading brand equity. while communicating affordability is essential for brands in When consumers define value, tough times, it need not be at the expense of a brand’s price isn’t even in the top three hard-earned equity. Bav® helped us examine the many different faces of value and how consumers perceive factors they consider. value messaging. we uncovered seven distinct paths to % % % % % % building value perceptions in a brand. 94 91 87 81 81 67 Product Quality Durability USability Price Multiple SatiSfaction uses 4 PrIvIleged & ConfIdentIal
- 4. CONFIdENT 7 dISTINCT CHOICES CHEAP CHIC PATHS TO VALUE each of these paths varies in its influence on brand everyday budget buys equity and perception, and each appeals to a different type of consumer mind-set. Some paths to value can help a brand differentiate, while others impact how well the brand is regarded in the marketplace. Which one might be right for your brand? let’s take a look… value with values DriverS oF DiFFerentiation CHEAP CHIC VALUE WITH VALUES RESOURCEFUL SOLUTIONS FUN FOR A STEAL THE REAL dEAL the CONFIdENT real deal CHOICE EVERYdAY BUdGET BUYS DriverS oF eSteem RESOURCEFUL SOLUTIONS fun for a steal
- 5. EVERYdAY % oF conSumerS budget 59 ALWAYS LOOK FOR special offers BUYS the most basic form of value and the type that most people associate with cheap or bargain brands. low price is the main lure for consumers when purchasing there’s a mood: it doesn’t feel right to these brands. this path to building value can help drive show things that are overly opulent or short-term relevance and perhaps trial, but if not balanced steeped in luxury, in light of everything properly, it can also erode a brand’s differentiation and, going on in the world. with that, hurt customer loyalty. — Hope greenberg, lucky magazine THINK GOOd THE CONSUmER: While a good buy can resonate with any consumer, VALUE the target who will most likely identify with this value KEEP IT proposition are those facing economic challenges: they BE dOWN SImPLE have cut back their spending in the past few years and are pessimistic about their own financial futures. TO EARTH 22% ARE FAR-BELOW-AVERAGE 74% USE COUPONS money managers 8 Source: experian Simmons 3 9 PrIvIleged & ConfIdentIal PrIvIleged & ConfIdentIal
- 6. % oF conSumerS 72 SAY IT’S ImPORTANT FOR A COmPANY TO ACT SOCIALLY act ethically RESPONSIBLE BE HELPFUL BE KINd nobody wants to buy something SHOW YOU VALUE that was made by exploiting CARE somebody else. — Jerry greenfield, Ben & Jerry’s THE CONSUmER: WITH values those who are likely to connect with this value messaging are more confident consumers who might be cutting back slightly after the recession. they attempt to budget and Brands that stay true to their value Dna while save money, but have a strong loyalty to brands and want maintaining a sense of responsibility for to see them do good. consumer and community well-being. they 1 in 3 65% take pride in their products and hold themselves to higher standards. this value path can help a brand to stand out from the crowd, as well as build the brand’s reputation in market. woulD pay more are either FOR ECO-FRIENdLY AVERAGE OR ABOVE-AVERAGE- PROdUCTS BRANd loyalists BE OBLIGING Source: new york times, “Ben & Jerry’s Builds on its Social-values approach” 10 experian Simmons 3 11 PrIvIleged & ConfIdentIal PrIvIleged & ConfIdentIal
- 7. SHOW YOUR BE INTELLIGENCE dYNAmIC ACT PROGRESSIVE RESOURCEFUL solutions out of this storm come new operating Brands that grow and maintain momentum through models. the ecosystem is going to change. innovative products and offerings that enable their users. they’re a smart choice for informed consumers — Brian dunn, Best Buy President who are looking for a reasonably priced alternative that on the need to innovate retail during the recession, 12/2008 works. this value proposition can help a brand to stand out in a respected and meaningful way. BE A BE dARING THE CONSUmER: as consumers look for more resourceful and smarter ways to VISIONARY manage their spending, it makes sense that they will in turn seek out brands that are more resourceful and innovative as well. Brands that are able to provide consumers with new solutions for interaction and purchase, while lowering cost, will quickly earn consumer trust and loyalty across segments. 12 13 PrIvIleged & ConfIdentIal PrIvIleged & ConfIdentIal
- 8. FUN FOR a steal SHOW YOUR ENERGY these brands bring fun, experiential energy to consumers at a reasonable price. Brands that go down this path can often carve out a more differentiated place in the hearts and minds of consumers. consumers are buying the spirit of the brand and what it stands for as much as they are buying the price. We still consume. We still want to take vacations. We still want to give the people that we love the icons of how we feel about them. We just have to BE do it better.” FUN — Paco Underhill, author of Why We Buy: the Science of FEEL Shopping” nPr, March 2009 FRIENdLY ACT SOCIAL THE CONSUmER: especially in economically trying times, consumers want to feel like they can escape (even if they can’t afford to). they are drawn to brands that successfully combine fun, friendly unique experiences with value. these are consumers who are good at managing their own money and are looking for more than just a bargain: they want a good deal that offers something extra in the user experience. 14 15 PrIvIleged & ConfIdentIal Source: npr, Shopping in a recession, talk of the nation PrIvIleged & ConfIdentIal
- 9. % dEmONSTRATE BE Say it’S worth PERFORmANCE TRUSTWORTHY 60 PAYING mORE FOR quality. confident CHOICES THE CONSUmER: everyday brands that are known for their the idea of a confident choice brand resonates most high performance and durability at a reasonable strongly with confident consumers: out of the entire price. Quality, durability and safety are central population, they were the least affected by the recession, to these brands’ value propositions. Brands and while they are cautious and careful spenders, they that occupy this space are held in higher BE see the value of quality brands that have a heritage for esteem than other brands in their respective RELIABLE durability and reliability. categories, and this esteem ultimately translates into greater brand loyalty. SHOW 42% leSS likely YOUR TO BE CLASSIFIEd dEmONSTRATE AS “true savers” 1 in 3 WORTH qUALITY have purchaSeD A CAR IN THE LAST YEAR 16 17 PrIvIleged & ConfIdentIal Source: experian Simmons 3 PrIvIleged & ConfIdentIal
- 10. Solvent is sexy. now when my friends get together, we talk about money, some ACT sweet deal that we’ve found or what we’re GLAmOROUS investing in. It’s like we used to talk about boys. everybody’s eyes light up.” BE CHARmING — Sandra Hanna, los angeles times, 12/2009 BE STYLISH FEEL SENSUOUS THE CONSUmER: CHEAP chic While Cheap Chic can appeal to a wide range of consumers, the group most responsive to this value proposition cares about price, but won’t give up their good fashion sense just for a discount. these slightly younger skewing consumers still want to save a buck, but won’t do it if they also have to cheap chic brands deliver stylish fashion without sacrifice their style. breaking the bank. these brands are clued-in to the latest trends, and present a face to the world 1 in 4 that shows it. while they “make the fashionable approachable” to a mass audience, these brands can also serve as a badge of honor, celebrating their customers as both stylish anD smart. conSumerS Say THEY LIKE TO KEEP UP WITH BE THE LATEST FASHIONS, TRENdY even in the recession. 19 Source: experian Simmons 3 PrIvIleged & ConfIdentIal
- 11. 1 in 3 BE AUTHENTIC THE real BE ORIGINAL CONSUmERS LOOK FOR dEAL EmBRACE brand names while Shopping. TRAdITION Brands that have established credibility and captured the trust of consumers, often for generations. consumers purchase these brands lots of store brands seem fine— but store because they know exactly what they are getting brand band-aids never seem to have the for the price. these brands stand out by being same adhesive qualities as the “real” ones. authentic and true to a core set of beliefs, and I happily pay more for my Band-aids! consumers show their appreciation for this consistency through their loyalty. — gracie, new York times Commenter 2/2010 ACT LIKE THE CONSUmER: this value proposition will likely not resonate with people A LEAdER facing extreme financial challenges: some consumers are turning away from brand names and trying private label or store brand items. But there is a set of consumers who have an extreme loyalty to brands that are tried and true and have stayed the course. While time and longevity are drivers, even newer brands can adopt this position by “keeping it real” and fulfilling consumers’ growing desire for authenticity. Source: experian Simmons 3 20 21 PrIvIleged & ConfIdentIal PrIvIleged & ConfIdentIal
- 12. value CHEAP with values CHIC WHICH ONE CONFIdENT IS RIGHT CHOICES FOR YOU? everyday consumers say their spending and saving patterns will continue, even after the recession ends. with budget reconditioned mentalities to shop within their financial buys limits, value will be an increasingly important component of brand choice. Determining the right strategy for your brand will depend on your brand’s current equity, the dynamics of the category in which you compete, and the fun for value mind-set of the target you are trying to influence. Because value is more than just low price. having the RESOURCEFUL SOLUTIONS a steal right value strategy can, in fact, be a path to building a great brand. the real 22 deal 23 PrIvIleged & ConfIdentIal PrIvIleged & ConfIdentIal