The Value of Value

Seven StrategieS to win with value meSSaging in the poSt-receSSion economy.

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discovering the

THE GREAT RECESSION HAS TRIGGEREd A NEW FRUGALITY.

9 10conSumerS Say THEY ARE mORE RESOURCEFUL NOW.

Source: mintel oxygen, “Budget Shoppers report,” october 2010rockefeller Foundation & yale university, “Standing on Shaky ground”iconoculture, Surviving the recessioninformation resources, inc. 2008

FEELING GUILTY?consumers are almost five times more likely to feel negative emotions when spending.

In times like this you should think before doing almost everything, because even when you are doing fine today, you NEVER know how it’ll be tomorrow.

— Carmen, IconoCommunities participant, 4/2009

after two consecutive years of declining per-capita consumption, increased unemployment and faltering consumer confidence, consumers have begun to permanently reshape their consumption patterns. experts believe that even as the economy recovers from the greatest recession that our country has seen in the past half century, rampant consumerism and over-spending will be gone for good.

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through an analysis of value-centric brands in young & rubicam’s Brandassettm valuator, a proprietary research and insights tool and the world’s largest study of brands, we found that too much of a low-cost or cost-only value proposition can end up degrading brand equity. while communicating affordability is essential for brands in tough times, it need not be at the expense of a brand’s hard-earned equity. Bav® helped us examine the many different faces of value and how consumers perceive value messaging. we uncovered seven distinct paths to building value perceptions in a brand.

When consumers define value, price isn’t even in the top three factors they consider.

VALUE IS mORE THAN JUST price.

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CHEAP CHIC

FUN FOR A STEAL

7 dISTINCT PATHS TO VALUEeach of these paths varies in its influence on brand equity and perception, and each appeals to a different type of consumer mind-set. Some paths to value can help a brand differentiate, while others impact how well the brand is regarded in the marketplace. Which one might be right for your brand? let’s take a look…

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CHEAP CHIC

CONFIdENT CHOICES

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BE dOWN TO EARTH

KEEP IT SImPLE

22%ARE FAR-BELOW-AVERAGE money managers

THE CONSUmER: While a good buy can resonate with any consumer, the target who will most likely identify with this value proposition are those facing economic challenges: they have cut back their spending in the past few years and are pessimistic about their own financial futures.

Source: experian Simmons 3

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the most basic form of value and the type that most people associate with cheap or bargain brands. low price is the main lure for consumers when purchasing these brands. this path to building value can help drive short-term relevance and perhaps trial, but if not balanced properly, it can also erode a brand’s differentiation and, with that, hurt customer loyalty.

%59oF conSumerSALWAYS LOOK FOR special offersbudget

BUYS

THINK GOOdVALUE

there’s a mood: it doesn’t feel right to show things that are overly opulent or steeped in luxury, in light of everything going on in the world.

— Hope greenberg, lucky magazine



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BE KINd

SHOW YOU CARE

Source: new york times, “Ben & Jerry’s Builds on its Social-values approach” experian Simmons 3

THE CONSUmER: those who are likely to connect with this value messaging are more confident consumers who might be cutting back slightly after the recession. they attempt to budget and save money, but have a strong loyalty to brands and want to see them do good.

woulD pay moreFOR ECO-FRIENdLY PROdUCTS

are eitherAVERAGE OR ABOVE-AVERAGE- BRANd loyalists

%72oF conSumerSSAY IT’S ImPORTANTFOR A COmPANY TO

act ethically

VALUE WITH valuesBrands that stay true to their value Dna while maintaining a sense of responsibility for consumer and community well-being. they take pride in their products and hold themselves to higher standards. this value path can help a brand to stand out from the crowd, as well as build the brand’s reputation in market.

nobody wants to buy something that was made by exploiting somebody else.

— Jerry greenfield, Ben & Jerry’s

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BE HELPFUL

BE OBLIGING

ACT SOCIALLYRESPONSIBLE



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BEdYNAmIC

Brands that grow and maintain momentum through innovative products and offerings that enable their users. they’re a smart choice for informed consumers who are looking for a reasonably priced alternative that works. this value proposition can help a brand to stand out in a respected and meaningful way.

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THE CONSUmER: as consumers look for more resourceful and smarter ways to manage their spending, it makes sense that they will in turn seek out brands that are more resourceful and innovative as well. Brands that are able to provide consumers with new solutions for interaction and purchase, while lowering cost, will quickly earn consumer trust and loyalty across segments.

out of this storm come new operating models. the ecosystem is going to change.

— Brian dunn, Best Buy President on the need to innovate retail during the recession, 12/2008

SHOW YOUR INTELLIGENCE

ACT PROGRESSIVE

BE dARING

BE A VISIONARY



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Source: npr, Shopping in a recession, talk of the nation

especially in economically trying times, consumers want to feel like they can escape (even if they can’t afford to). they are drawn to brands that successfully combine fun, friendly unique experiences with value. these are consumers who are good at managing their own money and are looking for more than just a bargain: they want a good deal that offers something extra in the user experience.

THE CONSUmER:

FUN FOR a stealthese brands bring fun, experiential energy to consumers at a reasonable price. Brands that go down this path can often carve out a more differentiated place in the hearts and minds of consumers. consumers are buying the spirit of the brand and what it stands for as much as they are buying the price.

We still consume. We still want to take vacations. We still want to give the people that we love the icons of how we feel about them. We just have to do it better.”

— Paco Underhill, author of Why We Buy: the Science of Shopping” nPr, March 2009

BEFUN

ACT SOCIAL

FEELFRIENdLY

SHOW YOUR ENERGY



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the idea of a confident choice brand resonates most strongly with confident consumers: out of the entire population, they were the least affected by the recession, and while they are cautious and careful spenders, they see the value of quality brands that have a heritage for durability and reliability.

dEmONSTRATEPERFORmANCE

BE TRUSTWORTHY

have purchaSeDA CAR IN THE LAST YEAR

leSS likelyTO BE CLASSIFIEdAS “true savers”


confidentCHOICESeveryday brands that are known for their high performance and durability at a reasonable price. Quality, durability and safety are central to these brands’ value propositions. Brands that occupy this space are held in higher esteem than other brands in their respective categories, and this esteem ultimately translates into greater brand loyalty.

THE CONSUmER:

%60Say it’S worth PAYING mORE FOR quality.

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WORTH

BE RELIABLE

dEmONSTRATE qUALITY



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conSumerS SayTHEY LIKE TO KEEP UP WITH THE LATEST FASHIONS,even in the recession.

BE STYLISH


While Cheap Chic can appeal to a wide range of consumers, the group most responsive to this value proposition cares about price, but won’t give up their good fashion sense just for a discount. these slightly younger skewing consumers still want to save a buck, but won’t do it if they also have to sacrifice their style.

cheap chic brands deliver stylish fashion without breaking the bank. these brands are clued-in to the latest trends, and present a face to the world that shows it. while they “make the fashionable approachable” to a mass audience, these brands can also serve as a badge of honor, celebrating their customers as both stylish anD smart.

CHEAP chicTHE CONSUmER:

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Solvent is sexy. now when my friends get together, we talk about money, some sweet deal that we’ve found or what we’re investing in. It’s like we used to talk about boys. everybody’s eyes light up.”

— Sandra Hanna, los angeles times, 12/2009

ACT GLAmOROUS

BE CHARmING

FEEL SENSUOUS

BE TRENdY


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this value proposition will likely not resonate with people facing extreme financial challenges: some consumers are turning away from brand names and trying private label or store brand items. But there is a set of consumers who have an extreme loyalty to brands that are tried and true and have stayed the course. While time and longevity are drivers, even newer brands can adopt this position by “keeping it real” and fulfilling consumers’ growing desire for authenticity.

ACT LIKE A LEAdER


CONSUmERS LOOK FOR

lots of store brands seem fine— but store brand band-aids never seem to have the same adhesive qualities as the “real” ones. I happily pay more for my Band-aids!

— gracie, new York times Commenter 2/2010

brand names while Shopping.THE real dEALBrands that have established credibility and captured the trust of consumers, often for generations. consumers purchase these brands because they know exactly what they are getting for the price. these brands stand out by being authentic and true to a core set of beliefs, and consumers show their appreciation for this consistency through their loyalty.

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THE CONSUmER:

EmBRACE TRAdITION

BE ORIGINAL

BE AUTHENTIC



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consumers say their spending and saving patterns will continue, even after the recession ends. with reconditioned mentalities to shop within their financial limits, value will be an increasingly important component of brand choice. Determining the right strategy for your brand will depend on your brand’s current equity, the dynamics of the category in which you compete, and the value mind-set of the target you are trying to influence. Because value is more than just low price. having the right value strategy can, in fact, be a path to building a great brand.

WHICH ONE IS RIGHT FOR YOU?

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valuesCHEAP CHIC

CONFIdENT CHOICES

fun for a stealRESOURCEFUL

SOLUTIONS

everydaybudget

buys

the realdeal22

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Business

The Value of Value