Marketing In 2009 Canada

Nobody’s UnpredictableJune 2009

What is happening in Canada

The Economy and Some Key Trends

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Ipsos Trend Observer 2009

Trend Observer a global study that uncovers today’s trends and predicts their evolution into the future.

• What motivates consumers today?

• What consumer trends should we prepare for in a post-crisis world?

• What motivates consumers today?

• What consumer trends should we prepare for in a post-crisis world?

Interviews with young

“trailblazers”Interviews with

cutting edge experts

Trend Analysis

Trend Analysis

Traces the development of trends from before the current

recession, revealing their development and

evolution into the current recessionary period and beyond.

Toward a Re-invented World:

Toward a Re-invented World:

Reveals how trends, coupled with the latest

technologies, are changing the way

consumers view several of the pillars of our

society, including the economy, community, self-image, and space.

Implications for our

brands

Implications for our

brands

A study in 3 PartsAdvertising

3

Agenda

Economy

How are Marketers responding?

How are Consumers responding?

Questions / Discussion / Your Experiences/ Anecdotes

Questions / Discussion / Your Experiences/ Anecdotes

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Living in Turbulent Times - Its All About Arrows

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And About … Images

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And, … Headlines

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Influencers

Employees

Competitors

PartnersPress/Analysts

Prospects

Customers

Investors Family

Communication - The Old World

MESSAGES

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Influencers

Employees

Competitors

PartnersPress/Analysts

Prospects

Customers

Investors Family

Communication - The New World

MESSAGES

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The Canadian Economy is in Recession

The Canadian economy has fallen victim to the global recession. The recession is expected to run its course in 2009 and the economy will rebound into positive territory in 2010.

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-3

-2

-1

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3

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Q1'07 Q2'07 Q3'07 Q4'07 Q1'08 Q2'08 Q3'08 Q4'08 2009* 2010* 2011*An

nu

al %

Ch

an

ge

Source: Statistics Canada (Q1’07 to Q4’08) and *Bank of Canada (2009 to 2011 forecasts)

Real GDP

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Unemployment Rate in April 2009

Unemployment is Rising Across Canada

Canada

8.0%

Source: Statistics Canada

BC

7.4%Alb

6.0%Sask

5.0%

Man

4.6% Ont

8.7%

Que

8.4%NB

8.9%

PEI

12.4%NS

9.2%

Nfld

14.7%

11

9.7

5.74.8

4

1.60.1

-2.6-4.5

-5.3

-9.9 -9.8-11 -11.2

-8.9-7.7

-3.2

Jan-08

Feb-08

Mar-08

Apr-08

May-08

Jun-08

Jul-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09

Apr-09

Residential Average Price Year-on-Year Percentage Change

Canadian Financial Monitor

Canadian real estate market hit its lowest level in a decade in January 2009… looks like it is now rebounding

Source: Canadian Real Estate Association (CREA)

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20,46622,412 22,776

24,95627,542

3% 7% 17% 27% 35%

Q1'08 Q2'08 Q3'08 Q4'08 Q1'09

Personal Bankruptcies Year-on-Year % Change

Canadian Financial Monitor

Source: Office of the Superintendent of Bankruptcy Canada

Personal bankruptcies have accelerated since the financial meltdown in October 2008

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4000

6000

8000

10000

12000

14000

16000

Jan

-08

Fe

b-0

8

Ma

r-0

8

Ap

r-0

8

Ma

y-0

8

Jun

-08

Jul-

08

Au

g-0

8

Se

p-0

8

Oct

-08

No

v-0

8

De

c-0

8

Jan

-09

Fe

b-0

9

Ma

r-0

9

Ap

r-0

9

Ma

y-0

9

S&P/TSX

TSX all time closing high of 15,073.13 on

June 18, 2008

TSX fell 1738.19 points or 16% in its

worst week in 68 years

TSX hit a 5-year low of 7566.94 on

Mar. 9, 2009

Nonetheless, whether these are “green shoots” or just “weeds” remains an open question.

The stock market has rallied about 35% from its March low amid speculation of “green shoots” of economic recovery.

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How Long Will We Be In This Recession?

Since 1870, there have been 255 examples of recession:

• 168 lasted for less than one year

• 61 lasted 1 - 2 years

• 26 lasted for more than 2 years

Source: Trajectory

Duration of Recessions

15

51

6

7

5

3

1

2

2

1

1

63

18

16

14

11

8

6

5

4

4

4

Economy

Healthcare/Medicare

Jobs/Unemployment

Environment

Armed forces/Military/Defence

Education/Schools/Universities

International war/Conflict

Crime/Justice

Government/politics

Deficit/debt/spending

First mention

Total mentions

(Percentage of respondents)

Canada’s Top Concerns (March 2009)

Thinking about the issues presently facing Canada, which one do you feel should receive the greatest attention from Canada’s leaders?

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Figures represent “Total Mentions”. Up to two issues were accepted from each respondent, thus percentages will exceed 100.

Canada’s Top Concerns – Trends (July 1991 - March 2009)

Mar

-09

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Assessment of the National Economy Today: May ’09 = 53%...The Turnaround…

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jul 9

4

May

95

Jul 9

6

May

97

May

98

May

99

Jul 0

0

Jan

01

Oct

01

May

02

Nov

02

Feb

03

Apr 0

3

Aug

03

Nov

03

Feb

04

May

04

Sep

04

Nov

04

Feb

05

May

05

Sep

05

Feb

06

Apr 0

7

Aug

07

Jan

08

Feb

08

Apr 0

8

May

08

June

08

Aug

08

Sept

/Aug

08

Nov

'08

Jan

'09

Mar

'09

May

'09

Good Poor

In terms of the current economic conditions in this country as a whole, how

would you describe the overall state of the Canadian economy right now?

All Canadians

47%

53%

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National Outlook for Economy Over the Next Year

0%

10%

20%

30%

40%

50%

60%

Ma

r '9

1

Ma

r '9

2

Ma

r '9

3

Ma

r '9

5

Ma

r '9

6

Ma

y '9

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Ma

y '9

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Ma

y '9

9

Ju

l '0

0

Ju

l '0

1

Ju

l '0

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Fe

b '0

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Fe

b '0

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Fe

b '0

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Ma

y '0

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Se

p '0

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Fe

b '0

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No

v '0

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Ap

r '0

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Au

g '0

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Au

g '0

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pt/

Oc

t '0

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No

v '0

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Ja

n '0

9

Ma

r '0

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Ma

y '0

9

Improve Get Worse

All Canadians

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Household Spending - % Cutting Back

73%

88%

86%

85%

81%

81%

81%

78%

77%

77%

77%

76%

75%

74%

73%

72%

68%

67%

64%

64%

57%

Total

South Korea

Mexico

Argentina

China

France

Russia

India

Italy

The United States

Brazil

Turkey

Great Britain

Australia

Japan

Spain

Canada

Poland

The Czech Republic

Belgium

Germany

J3. Given the current state of the global economy, have you and your family had to cut back on your household spending recently?

1%1%3%1%1%0%8%2%2%-3%1%-8%-2%-1%0%4%-2%-1%5%-6%-2%

Change from last wave

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Specific Cut BacksAverage of all countries vs. Canada

76%

73%

72%

59%

53%

47%

41%

33%

23%

11%

81%

79%

78%

61%

61%

60%

48%

27%

25%

6%

Entertainment

Vacations

Luxury items

Clothing

Energy consumption

Gasoline/driving

Groceries

Cell Phone

Cable TV

Education

All Countries

Canada

J4. What are the specific things that you and your family are cutting back on these days? Base: respondents who have cut back in J3

21No data for Aug 2008 or Apr 2007

Now, thinking about major purchases such as buying a car or household appliances, or your vacation spending, in the next year, do you expect that you and your family will be spending

Family Spending on Major Purchases in the Next Year – some signs of recovery?

22No data for Aug 08 or Apr 07

And, thinking only about your personal day-to-day spending habits on things such as groceries, clothing or other personal goods and services, in the next year, do you expect that you and your family will be spending

Personal Day-to-Day Spending in the Next Year – some signs of recovery?

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Industry Sectors Have Reacted Differently

+ Sectors YoY Index: Brewers Utilities Food Personal care Tobacco

- Sectors:

Insurance Mortgage Finance Gambling Automotive Consumer electronics

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Marketing in A Recession – Voices from the Past

All launched in a Recession by Marketing clientsWhat connects these products? … a clue

19201920

19821982

19741974

19291929

Launched in:

Creating Creating a new a new

categorycategory

First ever First ever Store Label?Store Label?

Resourceful Resourceful PremiumisationPremiumisation

Industry Joint VentureIndustry Joint Venture

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How Are Marketers Responding to This Recession?

Buy a truck and get a car free

Pay what you can / what you think it is worth

Consuming differently

• Swap/share (zwaggle.com)

• Rental (zipcar.com)

The end of supersize

Little luxuries

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Value Reframing

“Says its hybrid electric water heater ... will save consumers approximately $250 annually.

Says that switching to its latest models of water-conserving shower heads, toilets and faucets saves a family of four between $90 and $200".

The Stimulus package is a Value Reframing - replace your old product with a new product which will save you money!


Bring your travel mug instead of their paper cups and receive 20 cents off.

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only use what you need / what is good for you

Value Sizing

Right size the product to the specific need (e.g. Single use)


Down count, down size; smaller package; Compacted so you use it

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Increasing marketing spending during a recession greatly speeds recovery post-recession.

Source: Roberts, Keith. What Strategic Investments Should You Make During a Recession to Gain Competitive Advantage in the Recovery, Journal of Strategy & Leadership, Vol. 31, Issue 4

10% 9% 8%

0%

5%

10%

15%

20%

Cut Maintain Increase

Marketing Spending

-0.8

0.6

4.3

-3-2-10123456

Cut Maintain Increase

Marketing Spending

ROI During Recession (%) Increase in ROI During Recovery (% pts.)

Marketing Spend does not damage ROI significantly in a recession and helps set the platform for strong recovery


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Delivery - In Store Fundamentals

Fundamentals are critical when a recession exists.

Ensure your in-store fundamentals are working:

• POS materials

• Category line-up

• Shelf – location

• Return to basics in store!


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Price Optimization

Costs have increased and retailers are demanding more and competing harder. Fully understand price to optimise your profit!

The need to try and ensure your product is priced at the right price point for the consumer context and channel.


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Discounting

Offer Steep Discounts

Post Discounts

What to do?

• Generate ideas for discounting things peripheral to your brand rather than your core competency/brand.

Auto makers – financing rather than the vehicle.

Retailers – rather than the product itself free shipping or discount the warranty.

Carbo beverage – regular price for single, adjacent to deal for 36.

Harvard Business Review Jan 19, 2009

Preserve the value of your brand while delivering the greater value that consumers want during tough times.

Profits Evaporate

Impacts Sales


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SKU & Portfolio Optimization

Range• Do we need all the different skus? Rationalise to

increase efficiency

• Clear the clutter, non-performing sku’s/ brands


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Optimize Packaging

Improving impact and communication on-shelf will pay back FAST


Your products speaks for you at shelf, the consumer connection point.

Get Recognized!

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Sustainability

Product & Refills

Fuel Efficiency (Home, Car, Electronics)

Package - neutral carbon footprint

Monitor & Proclaim your contribution

Consumer & Employee Engagement


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Concentration of Power in Retailing

The business of retailing is continuously reinventing itself

How Are Marketers (Retailers) Responding to This Recession?

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Control Label Brands


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TV Distribution•Over-the-air TV•Analog Cable

Personalization•VCR•Specialty TV•Pay TV

1995 2007TV Distribution•Over-the-air TV•Analog Cable•Digital Cable•DTH Satellite•Wireless Cable (MDS)•IPTV•Internet

Personalization•VCR•Specialty TV•Pay TV•DVD Player•PPV•PVR•VOD•Video downloads•Video streaming

Portable•DVD Player•Digital Video Player•Mobile phone•Laptop computer•Smart phones

2000TV Distribution•Over-the-air TV•Analog Cable•Digital Cable•DTH Satellite

Personalization•VCR•Specialty TV•Pay TV•DVD Player•PPV

Portable•DVD Player

2000

Fragmentation and Higher Cost of Communication

Video Technology Continues to Change and Expand


2010

?“the right time to be touting your

products is when shoppers are ready to buy.”

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Shopping has evolved from the activity of FULFILLING DEMAND to an opportunity for CREATING DEMAND

Why?

The aisle is superior to out of store medium in providing access to the target group of users at a critical time.

How and when will the evolution be complete?

When retail completes its current transformation from distribution channel to a place that stimulates your senses and emotions


The Evolution of Shopping

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CONCIERGE®

CONCIERGE® is an interactive touch-screen computer that transforms a shopping cart into a friendly assistant that guests won’t be able to live without. The moment the cart is put in motion, the LCD screen comes to life offering help, new products, how-to-tips, and recipes.

PartnershipsSpringboard -


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Personal Account Recognition

Product Scanning

Shopping List

Weekly Flyer

Recipes

Product Finder

Targeted Advertising (both location and segment based)

Shopping Cart Tracking

CONCIERGE® …continuedSpringboard -

Partnerships


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Core Benefits

Enrich Customer Relationships

Increase Customer Frequency

Enhance Store Profile

Generate Customer Insight


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How Are Consumers Responding to This Recession?

• Choosing different products

• Growing use of discounters

• Further erosion of Loyalty (both to brands / retail banners)

• Premium and Cheap are Winning

• Switching to Private Label

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MEDIUM TERMMEDIUM TERM


• Taking advantage of deals

• Reusability

• Seek durability

• Less willing to follow the fashion – purchase cycles will get longer

SHORTER TERMSHORTER TERM

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• Apprehension of credit – either reluctance or forced

• Consumers will buy the central product… but they may do without the peripherals warranty

speakersstand

satellite

monster cables

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How Are Consumers Responding to this Recession?

Feb 26, 2009

267,000 references

Today

7,210,000 references

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Ipsos Can Help!

InnoInno EvolutionEvolution

InnoSpeed – Idea/concept generationInnoScan – Idea screeningInnoScreen – Concept screeningInnoTrack –Post-launch tracking

Pack Evolution – Packaging optimization with eye-tracking moduleLine Evolution – Line optimizationPrice Evolution – Price optimization

ForecastingForecasting

Designor – Volume forecasting range of products

BrandBrand

Perceptor Plus – Brand positioning and brand equity Market Landscape – Perceptual map of market to identify white space/optimize positioningBrand Stretch –Assesses brand extension potential Segmentation Toolkit – Best practice segmentation tools ConsumerScape – Needs-based seg tool to understand subconscious motivations

CommunicationsCommunications

Brand*Graph – Brand/Adv Assessment

Next*Idea

Next*TV – Pre-market Idea and Adv Assessment

A Portfolio of Innovation, Brand & Communication Products to Build Your Brand- Today!

Advertising

Nobody’s UnpredictableJune 2009

Thank you for your time.Thank you for your time.

Marketing In 2009 Canada

Business

Transcript of Marketing In 2009 Canada