Predicting which brands will beat the downturn
A brand research, development, and management consultancy has released predictions about which businesses will wilt or survive in the predicted 2008 recession – and why.
Brandsmiths monitors the impact and influences of economies, trends, business and political developments upon brands, their owners and their markets.
“We have determined that there are seven brand ‘planets’ – some will evolve, some will thrive, some will survive and some will disappear into a black hole if – or when -recession bites,” said Chris Cleaver, Managing Director of Brandsmiths.
“Our brand planets are ‘Modern Classics’, ‘Dominators’, ‘New Heroes’, ‘Wallpaper’, ‘Icons’, ‘Nadir’ and ‘Reinvention’.”
Modern Classics is the home of contemporary cool, where brands succeed by staying true to their roots. Names like Time Out, Levi’s and Penguin Books will survive, but may well become takeover targets.
“There’s a smell of success in the air. Life may seem quiet, calm and serene, but behind the scenes the brand owners and managers are working overtime to stay current. They play on nostalgia, and never forget that emotion is key to keeping customers close. They are the kings of quiet evolution: always fresh, progressive, savvy and smart – they’re in tune
with the masses, and masters of perennial appeal. They’ll survive a downturn, but are undoubted merger or acquisition targets.”
Dominators Dominators populate a cold, ruthless environment, fast-paced and not for the faint hearted – and its inhabitants will muscle their way through recession.
“Here we’ll find the likes of IKEA, Starbucks and Tesco. Smart, sharp, quick on their feet, prepared to stand their corner,” says Chris.
“It’s a place for the big boys, those that dominate through presence, price and a unique point of difference. They smile at the cameras, but they’re smiling assassins of anybody that gets in their way. They get what they want and are never shy of showing their strength and power. Sheer muscle will help them batter their way through any sort of recession.”
New Heroes live on the next brand planet says Chris: “Wannabe brands wannabe here. The truth is a lot of them struggle to find a foothold.
The ones that are thriving are the likes of Innocent Drinks and Green & Black chocolate – but also the Co-Op.
“These are true people’s champions, pioneering new territory and cutting through the clutter of an overload of choice. They’re getting back to basics, listening to what consumers really want and taking some risks to create a whole new alternative.
“They have to stick to their principles, though. They’ll make it through a recession, but they’ll also be seen as acquisition or merger targets by businesses who need a little edge to get them through difficult times.”
Meanwhile, Planet Wallpaper’s population can consider themselves a much more certain target for acquisition: “These are brands that have dozed off for a moment and woken to find themselves adrift in the brand equivalent of one of those shopping malls that you walk past thinking ‘that doesn’t look very interesting down there’.
“They were once beacons, but now they’re trapped, living off the glory days of old. Plant Wallpaper is a tired old place. At best everyone needs at least a paint job, at worst a complete makeover. Sorry to say it, but they include names like Haagen Daas, KFC and Woolworths.
“There is, however, one brand planet where true legends live, worshipped by followers, and who revel in the adoration. They are Icons. Fame is the game; they have unshakeable confidence in their right to be there, they believe they are the best, and every move is to sustain position, strengthen following and stay in front.
“Stella Artois and Walkers Crisps are two of the inhabitants – but they are massively aware that one wrong move can prove to be very costly. But these guys are powerful enough to survive anything. Recession will appear to simply pass them by.”
The next planet, says Chris, is Nadir. There is no way back for its inhabitants. They’re too big to buy, too big to collapse, so they’ll drift through a recession, and perhaps even simply disappear.
“These brands have simply failed to listen to the warning signals and are now on the fast track to a potentially messy end. These are brands that have made the grave mistake of becoming over-reliant upon one aspect of their mix, whether price, communication or heritage.
“Once there, it’s hard to leave. It will take enormous strength to escape the gravitational pull, and only a sea change and sheer strength of will to do things differently, plus a clear vision and mapping will get them where they need to be. Providing, of course, they can convince people they can and will do it.
“I wince when I say that brand names such as Disney, Dixons and FCUK live here. What they need is a spell on the plant known as Reinvention, brimming with hope, regeneration and ambition.
“These guys – the likes of Puma, Nestle and McDonalds – are the envy of many. They make reinvention seem effortless, self-aware enough to recognise a tired formula, they shed ghosts and find new pastures easily.
“They’re not necessarily futuristic or avant-garde, but they do have the confidence to change. They are a wave of brands who set out to forge a fresh future for themselves, armed with a progressive attitude, a clear idea and a ceaseless determination to turn the tide. Their ability and agility will drive them through a recession, probably without them noticing one ever passed by,” said Chris Cleaver.
Brandsmiths is a London-based team of research and strategy specialists focussing on the positive impact to be created by a strong brand presence. It is part of All About Brands plc (AAB plc), the marketing services group chaired by Allan Biggar, former Global CEO of Burson-Marsteller Corporate and Financial