Getting out the crystal ball – what does 2012 hold in store?

With the outlook for 2012 not exactly optimistic, I’ve dusted off my crystal ball to try and see what the next year hold for brands, marketers and consumers.

The continued economic trouble will see will see consumers continuing to become more careful - which for people with little will mean an everyday focus on best value and for the better off will be more thrift and localism. Everyone will be looking for comfort or escape as well as some sense of hope. I think people will become quite cynical and will wish for a greater sense of community and support but will look after number one - this will translate into even further decreasing brand loyalty and continued "forced experimentation" to get the most from your cash.

Supermarkets will maintain their push to appear on the side of the consumer, with the public either sticking with supermarket closest to them because they will be less able to afford to drive to a cheaper one or favouring the more budget supermarkets if they are within close proximity. We anticipate a return to make it yourself food and there may be a push to support local shops in the light of the recent Portas Report, provided the price differential isn’t too great.

As times get tougher mental health may become more significant for the mainstream and brands might reflect this - expect wellbeing to emerge with a harder more urgent edge - functional foods for the mind (fighting depression and dementia as much as cholesterol and cancer).

We also see brands that continue to innovate and add interest in small areas (new flavours. new tastes, new ways of cooking) appealing to consumers as a way of spicing up their everyday lives in small (cheap) ways and as alternatives to more costly eating out. Brands in some categories may have to rethink how and why consumers buy their products and adjust to ensure they ride the tough times.

Culturally we will continue to be increasingly mobile, less patient and more stressed. The mobility will increase. The fact that I can put money on my pay as you go mobile phone and pay for shopping with it also means brands should be able track exactly what consumers are doing and therefore more accurately market their products.

Brands will need to stay close to their consumers and to see where consumers are lapsing in their purchasing. It may be a time for brands to revisit fundamental questions about their relationship with their consumers in an effort to consolidate existing customers but more importantly build a new base as well. Research into why buyers buy, why people stay loyal or move away from certain brands during periods of austerity and why some people have never bought particular brand will provide a level consumer understanding that could inform post-recession planning now.

In the marketing and research sectors we anticipate pressure to drive more value from every project; engaging consumers to get better data and therefore understanding, which ultimately enables us to inspire marketing teams with our 'voice of the consumer' to make better, more successful products. In a recession price becomes a dominating factor, leading to further heavy promotions. Brands, though, can be better served understanding the more subtle drivers of purchase to be more profitable, as well as the obvious BOGGINGOFF that we know and love. We are likely to see brands going into more in depth in their understanding of consumer drivers of purchase.

Apparently there’s also going to be a big sporting event in 2012. We will see lots of Britishness coinciding with the Olympics and I think brands will interpret this in lots of different ways from the reactionary (Rule Britannia nostalgic values) through the inclusive (modern multi-cultural Britain) to the purely aesthetic (Union Jack everywhere) also linked with our floating off into the Atlantic away from the EU. But the Brit's love affair with exotic products, tastes and new brand experiences will continue so innovation will remain key - it is a constant in the nation's ever evolving DNA. The biggest game, though, may be to spot the brand with no link to the Olympic Games and to see whether anyone really suffers because of non-association.

BRITONS FOCUSING ON HOPE AND TRADITIONAL VALUES AS WE PREPARE FOR AN AUSTERITY CHRISTMAS.

A new qualitative research study that we will publish this week shows how Britons plan to reject traditional consumption and spend Christmas reconnecting with the things and people that matter most and are closest to them.

The study paints an emotional picture of a traditional Christmas as respondents talk about sending cards to and buying gifts for a closer set of people than normal; people they care about rather than gifts as random tokens and looking forward to “just spending time” with those close to them.

We found that consumers are viewing this Christmas as a buffer against a painful present, a time to recharge batteries, and to reconnect with matters they view as genuinely important. Consumers seem less concerned with magic and spontaneity, more with practicality and planning. There is more emphasis this year on planning and buying early as a way of budgeting at a time when thrift has become more than merely a lifestyle choice.

Linked to this is feedback that being savvy is not only a necessity but also something that can be genuinely rewarding. Greater effort is being invested in finding a bargain or in doubling up vouchers, finding a discount code, collecting and using points across all purchases, really checking deals in order to make hard earned money work harder and go further.

Christmas is obviously about enjoyment and escape, and a certain degree of excess is traditional but, in keeping with the subdued times, our respondents have said that a sense of modesty and restraint is the order of the season.

This Christmas will be about reconnecting, being playful rather than
over-indulging, and a more careful and thoughtful, rather than excessive, consumption of products, food and drink. This will be the Christmas of only moderate excess.

And in response to the prevailing sense of economic gloom, consumers appear to be responding best to brands which are using their advertising and marketing activity to capture the traditional spirit of Christmas.

Consumers seem also to be tapping into the power and comfort of ritual. In these times of uncertainty the comfort of rituals is very appealing. Most respondents saidthey were looking forward to “the day” and “the people” rather than “the things” and are being attracted by brands which convey that.”

In terms of brand advertising, the John Lewis advertisement, which revolves around a playful inversion of the classic ritual of waiting for Christmas day, has tapped most particularly into our desire for a return to a traditional sense of giving. But the advertisement that was cited most often was Coca-Cola’s “Holidays are Coming” spot with the illuminated Coca-Cola truck and convoy snaking through the wintery hills to a “universal” town. This advertisement was spontaneously discussed as a signifier of Christmas, and welcomed as enthusiastically as the families in the advertisement welcome the Coca Cola truck.

In the face of what feels like unrelenting economic gloom, unrest and
uncertainty affecting many levels of society, respondents have been switched on
by advertising that has captured their mood, hopes and fears.

There is a real hunger for hope. As well as being a lovely seasonal story, the John Lewis advertisement particularly resonates with people’s need for stories of hope; hope that values of giving are alive and well in a world which has been so much about receiving or taking; Even the more ambiguously received M&S advert captures a hope of a future where “dreams come true.

Five themes emerge from the study, which have significance
beyond Christmas, long after the decorations have been put away. These are (1) a profound need for hope; (2) a sense of post materialism; (3) a focus on people and things closest to us; (4) the comfort of ritual and (5) the idea of the rewards of practicality, planning and hard work. So what should brands take away from this seasonal analysis?

The messages from our respondents are quite clear.

Articulate hope and a positive long term vision as consumers are looking for inspirational light at the end of the tunnel; reflect the way that consumers have, in some ways, temporarily lost faith in materialism and focus on values rather than things; focus on the local, facilitate family, be active in communities and, at very least, continue to overtly support the British economy with products created and built locally. Brands should continue to tap into
rituals which offer familiarity, comfort and trust for consumers and create promotions which reward planning and effort, as well as “hard to ignore” deals.

Don’t diss the innovators in our society

“Britain rock bottom of world innovation league” was the leap-out headline from the business pages of The Independent this week. The story behind the headline was the news that the Thomson Reuters Top 100 Global Innovators survey was about to place the UK bottom of the innovation table ranked alongside Lichtenstein.

At a time when the economy is creaking and we’re all doing our level best to keep creating wealth and jobs, to say the headline and the story is unhelpful is something of an understatement. Is it, I wondered, another example of Britain’s ability to talk itself down and into the dreaded double dip recession?

On closer reading, though, I am happy to take issue with the findings. The survey has been put together based on patents: volume, global reach, how frequently a company has a patent granted and the so called influence of those patents.

But are patents really a useful (or indeed reliable or only) barometer of innovation in our society? I don’t think so. Using patents as the benchmark misses the fact that innovation is endemic in many UK companies, from the smallest to the largest, day in, day out. Simply registering hundreds of patents does not make a company successful; they have to be insightful and relevant patents, a few good ones will always be more innovative than a truck load of bad ones.

Few would argue that Google is one of the world’s great innovative companies; perhaps even a model for a 21st century brand. But Google is the perfect example of how innovative thinking isn’t always a success. Just think Google Buzz, Google Page Creator, Google Audio Ads and Google Wave to name but a few. The jury’s still out on Google Plus.

This brings forward the question: what is innovation?

One could argue that newer or smaller brands are innovating more because they have to make a footprint in the market and to simply replicate what is already there is unlikely to lead to success. There are plenty of SMEs innovating within their own sectors in order to compete but at a time when multi-nationals dominate western economies and are making in-roads into developing markets too, it can be difficult for smaller brands to bring their innovations to market. Some older, bigger brands meanwhile are ‘renovating’ to keep alive what they already have; this may mean replicating the innovations of smaller companies using their greater reach and bigger budgets. True innovation is always going to be more ground breaking and ‘new’ than renovation but it doesn’t actually mean that it will be more successful. The relationship between innovation and success is not necessarily a given.

One of the report’s authors, Bob Stembridge, comments in the article that the lack of UK patents (and therefore purported absence of innovation) is down to the economy. This is unlikely to be true as most Western countries are gripped by the same global downturn. One can argue that it’s a pretty level playing field in that respect.

A more pertinent question, perhaps, is whether we as a society really value innovation and recognise it well enough. In the current “heads down, just get through it” economy, few people lift their eyes above their computer monitors to see the real intelligent business thinking going on around them – whether that’s in product design or development or even, for example, in the way one can apply new thinking to something as apparently mundane as market research, yet we are.

Innovation isn’t necessarily about making things – innovation is a state of mind, a culture. In this sense, I think many of our businesses are ahead of our cultural curve.

When it comes to research, the devil is in the detail…

I read some interesting, if slightly perplexing research today, which headlined with the fact that around 80% of brands are not regarded as beneficial to factors like health, happiness, financial security and environmental protection.

The research was conducted among 50,000 people in 14 countries, including Brazil, China, France, Germany, India, Japan, the UK and US.

Some of the findings may have been superficially interesting but, when given thought, actually posed more questions than answers.

For example, the research was reported as saying that:

• Most consumers "would not care" if 70% of brands were to "disappear", while only 20% of brands were seen as having a positive impact on shoppers' sense of wellbeing.

• 30% of respondents in Latin America felt brands exerted a favourable role in their lives, totals falling to 8% in Europe and 5% in the US.

• 65% of people had a "very strong attachment" to Coca-Cola, but only 35% thought it improved their quality of life.

But what does any of this actually mean?

Generally 20% of brands make up roughly 80% of any market, because not only do they meet consumer needs concerning benefits but also because they can out-market the competition – the other 80% of brands make up niches within the market and are driven by other smaller needs and benefits but still needs and benefits nonetheless

With regard to those consumers who "would not care" if 70% of brands were to "disappear", this should come as no surprise either. Most consumers only buy about 20% of brands in a category regularly, so why should most consumers care if smaller brands that they don’t buy disappear?
We have a mantra that just because we can ask something, doesn’t mean that we necessarily should. When you are designing a piece of research, it is esssential to keep it focused on actual business needs in order to deliver relevant customer insights that genuinely serve the company’s commercial objectives. Anything less and the relevance and value of the research have to be called into question.
Whilst a sound fundamental understanding of consumer behaviour and market dynamics is what underpins most successful marketing strategies, for such research to have any true value, it must deliver practical, tangible insights that can inform either new product development or marketing planning. This means that research always needs to go deeper than the headline-grabbing numbers.

Baby 7 Billion and her message to brands

So the world has its seven billionth occupant, designated by the United Nations to have been a baby girl born earlier this week in the Phillippines; seven billion people, predicted to become eight billion by 2025.

On the surface this indicates a growing potential global market for multinational or aspiring multinational brands to target. After all, as The Guardian reported, with more than 1.1 billion people living without clean drinking water, opportunities certainly exist for companies equipped to transport and distribute water, and upgrade or build infrastructure. And that’s before anyone has even considered consumer goods. But the details behind the headline figure – India to become the world’s most populous company, Zambia’s population to double whilst others decline -are just as important in revealing how brands may try to tap into changing demographic trends.

Although the BRIC countries have been on most multinationals’ radars for some time, the news of population growth may lead to a new raft of 'initiatives'. But population growth alone may not be a good enough reason to 'chase a country'. Having worked on various washing powder launches in India in the past, one of my colleagues at Engage came up against the issue of home washing where wooden debris from the cooking stove was used as an abrasive to clean clothes instead of a detergent. Some 25% of Indians were still doing this and, as it is effectively free, they were understandably reluctant to spend money on something branded that does the same thing.

There are other lessons to be learnt here. Take Nokia, as an example, which has been spectacularly pushed to the sidelines of the mobile market as western consumers look to smartphones by Apple, Blackberry and HTC, whose stock market value recently surpassed Nokia’s. However, the threat to the brand is double-edged because in emerging markets like India, where Nokia is still the most trusted mobile phone brand, low-end local handset makers are beginning to attract an increasing number of customers.

It is important to get beneath the cultural, emotional and functional reasons for brand purchase decisions. Cultural and economic issues can impact on how brands develop differently in different territories. In some markets 'western' brands are too expensive and cheaper local alternatives that do a good enough job are preferred instead; in others brands can be a status symbol, creating different sorts of opportunity for different sorts of brand.

In Japan, for example, it has always been very cool for younger people to wear western brands. Over the last twenty years or more, younger Japanese have tried to differentiate themselves from traditional Japan and become more outward looking. Branding has been a big part of it and it is a process that may well be replicated in China in the coming years.

Brands have to button down the 'insight' for a product in emerging markets just as they you would in any other country. This is equally applicable to brand marketing strategy. How can you leverage social media in a highly populous country with limited Internet accessibility? How can you tap into cultural norms to make your brand’s arrival seem evolutionary rather than revolutionary. It’s not only about the potential size of the market, it is about the potential for brand acceptance in those markets and the two are not necessarily in tune with each other. Research is key to this and being sure you can develop a sound and growing consumer base as a platform for longer term brand success.

Design and customer insight are not mutually incompatible

British industrial designer Sir James Dyson, inventor of the dual cyclone bagless vacuum cleaner, was recently quoted as saying: “Steve Jobs has shown you ignore good design at your peril and that breakthrough products come from taking intuitive risks, not from listening to focus groups.”

On first glance this may sound like an obvious statement, that good design emerges from the maverick, creative mind and that research in the market place serves only to stifle that creativity and genius. However, on second reading, it also looks not only a little elitist, but also that the designer or the brand (and in Dyson’s case the two are, of course, inextricably linked) either doesn’t trust or isn’t interested in the judgment of its potential customers.

It will come as no surprise that I don’t agree with this approach. Ultimately research tells you what you set it up to do. You have to ask a question and create sound and effective research to deliver the answer . Framing research properly is key to getting the right result.

But, of course, focus groups are not the only available research tool. An experienced researcher, like my colleagues at Engage Research, will be able to point clients in the right direction. Effective research can either improve or kill off an idea, perhaps saving the brand thousands in development costs. Research will highlight broader market issues maybe can or can’t be addressed but which, either way, would be crucial to success in market. We have all tested a few brilliant products that people really liked, but that quantitative research has showed could not succeed in market and saved their manufacturers a fortune by not launching it as planned.

My colleague saw this in evidence most recently when working on a particular product, where a sample of 800 respondents liked the idea but just wouldn’t buy it due to perceived credibility and price issues. The research was showing that it was a high risk, niche product launch at this time, whilst the manufacturers were arguing it should be launched because one guy in one focus group said he would buy the product.

As well as classic research tools that “test” ideas, we also use techniques and approaches which engage with consumers in the nurturing, development and co-creation of ideas. Consumers, treated with respect and given the appropriate tools, can be just as intuitive as contemporary boffins like James Dyson.

So the message is the focus groups are certainly not the panacea for all evils. However, to go to the opposite extreme and ditch the many sophisticated and subtle customer insight tools now available to brands, is to wander into a market place blind. And who has the available cash to do that in the current economic climate?

Brands & The Cult of Personality – What to learn from Steve Jobs

I started writing this blog before the sad news of Steve Jobs’s death had been announced, though this news, if anything, brings the subject into even sharper focus. I began writing on the back of the perceived lacklustre launch of the iPhone 4s this week and the suggestion that, whilst the media felt new Apple CEO Tim Cook presented well, the whole event lacked the presence and the force of Steve Jobs’s personality.

In truth the disappointment surrounding the iPhone 4s launch had less to do with Steve Jobs and more to do with expectations being raised too high for the product to live up to.

Apple will continue to flourish without Steve Jobs because it has the necessary culture in place to enable it to do so. Big personalities should be able to render themselves redundant once successful.

So how great an asset can the force of one personality be to the prospects for brand success?

In a sense, Apple is something of an anomaly. It used to be all about the tribe, the cult of the creative collective, but latterly has been heavily associated with its cult leader, Steve Jobs.

Other brands, however, are personifications of their owners. A lot of have been grown by the person at the helm and the personalities of the two are intrinsically linked. Although he no longer owns every business, imagine Virgin without Branson, Ryanair without O’Leary, Dyson without Dyson and even Easyjet without Stelios (even though they are in dispute). These personalities have values which people associate with the brand, such that the brand personality becomes an extension of their own over time.

Brands that consumers can clearly associate with something or someone tend to do better in market than woollier ones. Indeed some of the more emotional attributes are the hardest to cement with consumers - which is where a personality can be helpful.

This is not true for all brands, of course. Some brands, like John Lewis, for example, thrive despite the "positive absence of personality". John Lewis benefits from being democratic, there for you, whatever you want us to be sort of feel, rather than a "this is me, take it or leave it" notion of a personality-led brand.

Of course the values of the 'leader' are also often reflected in the employees of the business as well. If you get it right, having a strong character or leader with clear values and a vision can drive a brand faster and stronger than others and carry consumers with it. Brands represent who people are. Buying Apple products has made people feel cool, it has made them feel different and they have bought in to the chilled, relaxed feel that Steve Jobs embodied so well. Maybe Apple will find it tougher than we think without him. Only time will tell.