The battle to defend brand budgets is always top of the agenda, as CMOs look to make the most of marketing spend amid the current financial downturn.
The drive to maximise impact and effectiveness with minimum spend remains strong – even though the recent IPA Bellwether Report revealed that marketing investment has continued to grow, despite the difficult economic climate.
But once that budget has been secured, how should brands move forward? Consumer behaviour is changing and attitudes are shifting, so it’s vital that companies are able to tap into the current mood as household budgets continue to be squeezed and every purchase becomes more considered.
Sarah Sanderson, managing director TGI at Kantar Media, explains why it’s crucial that brands are “on the money” in a cost of living crisis.
“The current hike in the cost of living is having a bigger impact on people’s attitudes to spending than the financial crisis did in 2008. Our Kantar Target Group Index (TGI) data shows that over half of people agree that the economic outlook is affecting their purchasing behaviour, compared to just 38% who said the same thing 14 years ago.
It’s a stark stat which highlights the risks for any brands trying to draw a straight line from the credit crunch to now understand what the latest turbulence means for them and their customers.
The effects of high inflation appear to be much more widely felt, and brands must understand how this is fuelling behavioural and attitudinal changes among different demographics. Marketing campaigns built on assumptions and generalisations just aren’t going to cut it.
Brands need to be on the money
At Kantar we know that times are tough for many, with nearly a third of people finding it difficult to get by on their current income. Naturally consumers are looking for ways to cut back, with around half saying they’re intending to eat out less in the next few months, while more than four in ten plan to focus on essential spending.
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The consequences of high inflation are far reaching, but at Kantar we found important variations in the data which provides campaign planning and targeting guidance for brands.
Young families especially are feeling the pinch. A staggering 88% of parents with pre-school aged children now cite price as one of the most important factors when buying food, up nearly 10% since last year. It shows that having a clear value proposition is now an even higher priority for any FMCG brand looking to target families.
Of course, there will always be groups who are more insulated from economic upheaval than others. At this end of the spectrum, nearly ten million Britons say the current crisis hasn’t affected their finances at all, and a third of people intend to continue buying their favourite brands no matter what.
As ever the devil is in the detail, and understanding the nuance behind people’s attitudes and spending patterns is a first step to identify strategies for maintaining or winning a larger share of the market.
There will be categories and contexts when brand loyalty will trump price if the proposition is strong enough. Marketers who understand how and when purchase decisions are made by customers will be better placed to keep their brand firmly in the non-negotiable camp.
It pays to do things right
There are some universal trends that cut across demographics and above all, people still overwhelmingly expect businesses to do the right thing.
The Kantar TGI data shows more than 70% of adults believe that during the current financial crisis, brands should be sustainable and socially responsible without charging a premium. Purpose-led marketing clearly arguably has an even greater role to play when budgets are tightening for many.
Brands could be fighting for their share of a smaller pie over the next few months, so their marketing spend needs to help them stand out in a way that will retain their competitive edge.
To achieve this, the starting point has to be to develop a crystal clear understanding of who the target audience is and what matters to them.
