There could be a reason that the legendary centers of the markets (Wall St) and marketing (Madison Ave) are, amid this entire planet, located only a few miles apart. And they may be even closer, emotionally.
What I’ve noticed recently is that the various economists, financial writers, and stock analysts I read are all starting to have a similar view of what the next few years are going to be. And it doesn’t look pretty from here to about 2015.
Jim Jubak, of MSN Money, calls it the Great Recession.
Economic conditions, of course, have a profound effect on consumer spending power, the products they purchase, and the reasons they buy them. And what do the experts think consumers will be wanting during this period of economic doldrums?
In Jubak’s latest artile, Five Rules for Post-Recovery Investing, he lays it out with his 5 new rules.
- It’s not “business as usual.” Shy away from companies where the business plan going forward is simply a hope that things will go back to “normal” once the economy recovers. At a minimum, the company should recognize the world has changed. It’s a good sign that , the classic pre-crisis consumer business, is groping for a new formula.
- The new value definition will be easier for some. Recognize that some companies have less distance to travel in meeting a new value proposition. needs to tweak its menus; Starbucks may need a top-to-bottom reinvention. needs to balance its full-price and outlet sales; needs to experiment to find its niche in the new economy.
- Value doesn’t simply equal low price. I don’t know yet — and neither does the company — whether a new emphasis on organic and healthful food at reasonable prices will succeed in revitalizing sales at , but the position makes sense in a post-recovery economy.
- Cost-cutting will be essential. A company such as that has built its long-term strategy on constantly cutting costs by constantly improving production technology is well-positioned for the new world. Low-cost producers like also have an edge in this environment — if they can combine low cost with perceived consumer value.
- Look for clear, flexible business strategies. The best bets are companies that have clearly articulated, flexible strategies for coping with this value shift. , for example, has directed its advertising in developed economies to trying to convince consumers that its brands deliver more value — they work better, contain less water, etc. — even at higher prices. In developing economies, the company is cutting prices to win market share and to create brand recognition.
To me that all boils down to three words: adaptability, efficiency, and value. Not the most glittering adjectives to find on a creative brief. But then, marketing’s biggest challenge has always been to find the desire among the mundane and indistinguishable. And as attitudes shift, what was once bland or working class can make an about-face. Think Gap T-shirts and Doc Martens in the 80s post-disco era. In these times, value is no longer boring, but rather a search for substance and meaning. Efficiency begins to feel intelligent or cognizant.
Consumer attitudes are even more important as the lines between marketing and product development continue to blur. Because what was once simply a one-way communication message is now a more personal connection, and even a considerable investment of time.
And that places a lot more emphasis on getting the underlying strategy right.