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  Claire RatushnyKevin Randall Time for a Brand Stimulus Package
by Kevin Randall
March 16, 2009

Follow the 7Ps of Branding

Every day we are bombarded with numbing news about the economy: bank busts, bailouts and buyouts, rising jobless claims, more home foreclosures, declining consumer confidence, the unfolding “stimulus package” and a national budget in crisis.


In the marketing world, we endure a similar drumbeat regarding the fallout: dismal corporate earnings, company layoffs, marketing budget cuts, advertising going dark, clients and agencies and people coming and going, and a brand budget crisis. There is a sense of turbulence, malaise and a lack of confidence.

Our industry is witnessing a diminishing commitment to long-term brand building. The mission of the moment is driven by the CFO, not the CMO, and calls for cost-cutting and short-term revenue-generating activities represent the only immediate focus.

Lead generation is “in.” Demand stimulus and call to action are the rage—perhaps partly because the term stimulus now enjoys so much currency. Brand strategy and market research are “out” of fashion.

Will the decline of brands and branding follow?


A weighty and consistent body of historical data shows that marketers will do harm in the short- and long-run to their businesses and brands by knee-jerk budget slashing and running scared.

Hundreds of studies of marketing over ten recessions in the 20th century have concluded that not only did sales and profits decline for brands that cut brand-oriented advertising during the recession, but also that performance continued to lag upon the recovery (“Why it is important to invest in communications during an economic downturn,”, 2009).

Today’s brand leaders would be wise to consider and follow these 7Ps of Branding as a guide for the recession and beyond:

1. Profit
“We have a philosophy and a strategy. When times are tough, you build share." - AG Lafley, CEO, Procter & Gamble

Marketers now have a golden opportunity to profit and establish real competitive advantage by exploiting the current situation. They can increase brand value and market share now relatively more easily and cheaply than during good times. With competitive noise levels reduced it is easier for a brand to stand out in the marketplace. Media costs are more attractive. Interbrand CEO Jez Frampton argues for “protecting and growing a brand…a company’s most valuable asset—and a far less volatile asset than others during a time of economic uncertainty,” (“Interbrand Announces the 2008 Best Global Brands,”, 2008).

2. Persistence
Corporate brand directors need to stay the course by going against the grain and not following the marketing herd. Even if budgets are trimmed in some areas, there should be a core of strategic and tactical activities that endure (the former initiatives tend to be less budget consuming even in good times). Such brand perseverance will provide reassurance during uncertainty to both the existing customer base, an especially critical target now, and to internal stakeholders. Rosabeth Moss Kanter cites current downturn success stories of IBM and Procter & Gamble as “role models” and examples of “persistence despite obstacles” (“The Value of Role Models in the Downturn,”, 2009).

3. Planning
Despite the strong economic headwinds, brand builders should remain committed to pursuing long-term visions and executing plans while selectively and pragmatically improvising marketing tactics. IBM (the second most valuable brand in the world according to Interbrand/BusinessWeek, and a B2B brand) during the recessionary early 1990s and Southwest Airlines after 9/11 are examples of brands that never wavered from their long-range strategic compasses and profited enormously by doing so. These brands did not and do not meander based on quarterly results. The strongest, top-performing brands are built to weather the various storms that come along.

4. Performance
Brands (and their communications) will be judged and rewarded now by delivering on “value” over merely price. Some marketers have and will cut prices. Brand leaders do need to (re)define the value of their offering while not compromising the quality and experience customers expect or need (despite across-the-board corporate cutbacks). Harvard Business School professor John Quelch also recommends investing in opportunistic, focused market research since there is a real need to define “performance” and “value” and gauge what is relevant to customers in the shifting environment (“Marketing Your Way Through a Recession,”, 2008).

5. Positioning
Brand owners must uphold and defend their core positioning and resist the temptation to sacrifice quality, reduce innovation efforts or cut prices. A study of more than 1,000 companies showed that firms that cut manufacturing and administrative functions in a recession did tend to reap the benefits while those that decreased spending on new product development, quality and marketing suffered (“What strategic investments should you make during a recession to gain competitive advantage in the recovery?,” Strategy & Leadership, Profit Impact of Market Strategy [PIMS], Keith Roberts, 2003). Leading brands will stay there by offering and communicating their enduring relevance and point of difference. Recessions and discounts come and go, but trusted brands and their appeals tend to transcend and outlast these events.

6. People
There needs to be an appreciation of the link between top talent and top-performing brands. Hiring, motivating and keeping the best people (who exemplify the brand) while competitors are pruning overhead is a key source of proprietary advantage. Management guru Jim Collins chronicles the cases of Boeing, Hewlett-Packard and Procter & Gamble, who bucked the trend during tough times by investing in talent (when their rivals were shedding critical human capital) only to thrive and outperform the competition (“Crisis into opportunity,” CNN, Jim Collins, 2009).

7. Principles
Brand leaders should work with CEOs to make sure their brands and organizations are integrated and that employees internalize and externalize a set of values that don’t change. Both Quelch and Collins emphasize the importance of adopting core brand principles and personality traits, sticking with them and executing on them in the future. According to Kanter, IBM’s and Procter & Gamble’s strong financial results today are partly owed to their focus on corporate brand values, ethics and social mission. Valued customers and employees will be more loyal if they are reassured on principles—by the brand and by its chief executive and sponsor. This is especially critical in the B2B world, with its large transactions and numbers of stakeholders involved in the customer experience.

Long live strong brands whose adherence to the 7Ps of Branding will ensure the best return on investment!

Brands by the numbers

• Southwest Airlines was the best performing stock from 1972 to 2002. (“Crisis into Opportunity,” CNN, Jim Collins, 2009).

• McGraw-Hill analyzed 600 companies from 1980 to 1985. The results showed that B2B firms that maintained or increased their advertising during the 1981-1982 recession averaged significantly higher sales growth—both during the recession and for three years following—than those that eliminated or decreased advertising. By 1985, sales for companies that were aggressive recession advertisers had risen 256 percent over companies that did not maintain their advertising (“US Recession”, McGraw-Hill, 1988).

• A study of 1,000 firms during recessions between 1982 and 1999 identified key differences regarding the strategies of the best and worst performers, with the measure of performance being changes in the company’s market-to-book ratios. Notably, the best performers had increased their marketing and advertising spending not just relative to their competitors, but also compared to their own spending in better times. (“Learning to love recessions,” Richard F. Dobbs, Tomas Karakolev and Francis Malige, McKinsey & Co., 2002).

• A 2005 survey of 154 senior marketing executives underscored the findings of the McKinsey study (“Turning Adversity into Advantage: Does Proactive Marketing during a Recession Pay off,?” Raji Srinivasan, Gary L. Lilien and Arvind Rangaswamy, International Journal of Research in Marketing [IJRM], 2005).

• IBM reported a 12 percent increase in earnings for 4th quarter 2008 beating analyst expectations (, 2009).

   Kevin Randall is Director of Brand Strategy & Research at Movéo Integrated Branding, a brand consulting and marketing communications firm based in Oakbrook Terrace, IL. Kevin can be reached at and 630.570.4813.

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Time for a Brand Stimulus Package
 That's a brilliant article, Kevin. I've been pounding this drum for years. One thing I've noted in this recession is that entrepreneurial clients seem to be less risk-averse than corporate clients. Of course, their budgets are generally smaller, but smart business owners and innovators often see the opportunities while corporate managers see themselves getting fired for spending money or sticking their necks out. 
Tim Johnson, President, Brandwave - March 16, 2009
 Well expressed. The notion of persistence in a down economy makes sense, particularly when one considers the real opportunity to stand out and build brand when others are standing on the sidelines.

Some obstacles are like impenetrable force fields though... such as those put up by corporate behemoths, who value short-term results and this quarter's numbers over brand building efforts that may not see an immediate return.

We know brand building is a marathon event. But a lot of businesses are in full sprint to make their numbers and salvage quarterly results.

The answer, to me, lies in establishing credibility for a sustained brand building effort in good times and in bad. If we can establish with all those who matter within our organizations that we are constantly managing our brand(s) vs. running our enterprise, then the case for sustained investment across the cycle will be far easier to make. 
David Cameron - March 16, 2009
 Great perspective, thank you. It is rare that people manage to strip the Brand to its core in this way and identify the Brand values and principles and the people behind the Brand as its strength.

The simple truth is, if the Brand truly knows itself, its identity is rock solid. It knows its relevance, its strengths and its value in the marketplace. The Brand is its people, with a clear line of sight to its purpose and the promise it delivers on without fail and with unwavering commitment. Any economic crisis becomes "merely" a change in the environment in which the Brand operates, but the values, the principles and vision and the identity all stay the same. This is the marathon that David refers to. Knee-jerk reactions to quarterly profit margin projections undermine all of this and destablises Brands. Surprisingly, there are Brands out there who are so well defined and have strong identities, that they have thrived beyond their wildest dreams over the last quarter! 
Hayley Allen, Manager, Head Space Brands - March 16, 2009
 Great insights from the early 80s recession. Thanks for digging this up, very useful article. Consistency and the guts to keep going seem to be key ingredients to holding brands up in tougher times. 
Stuart Leo, Director, - March 16, 2009
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