Ксения Михайленко. OMD. Affordable Happiness, or FMCG in crisis. Рецепт от...

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I N S I G H T S • I D E A S • R E S U LT S

Affordable happiness or FMCG in crisis

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It’s true that Ukrainian consumer is

unconfident now

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Confidence index 56 (-7P vs. 1Q’13)

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Unconfidence has financial & emotional background

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Stress Financial limitations

Activates “Safety mode” in consumers minds

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Emotional-Financial=purchase intention

Brian Knutson, Professor of Stanford University made an experiment, which measured neural activity of consumers minds. This research discovered that when consumers look on price of the product, they activate the area of brain that responsible for pain.

Pain Reward

Source: Phil Barden Decoded he Science Behind Why We Buy

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pain reward

Purchase takes place when reward is

higher than pain

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Decrease Pain (Price) or Increase Reward (Brand/product proposition).

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Consumers fill pain, especially today…

Consumer Confidence Index (CCI) Index of the Current Situation (ICS) Index of Economic Expectations (IEE)

Source: GfK Ukraine

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Producers are looking for pain-relive drug

1+1=3

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Who will win in the price rush?

Price

Rew

ard

Private Labels

A brands

B

B

B

B

B

B

A

A

Private Labels as the price-based proposition has ability to provide the lowest prices to consumers

“Make your brand strong, or get organized to be the one that sells at the lowest prices!”

A

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Are you ready to provide the lowest price?

All the year round?

Challenge #1:

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The field of battle

Role of product’s characteristics & marketing In the category

# o

f big

bra

nds

In

the c

ate

gory

Price driven: higher share of private labels

High differentiation, Limited # of Big brands

High differentiation, Big # of Big brands

Low differentiation, Big # of Big brands

Low differentiation, No/ limited # of brands

Double efforts for the impulse

categories

Pure Price battle

Needed category argumentation &

category TOM support

Brand image support is highly

important

Convince in your added value or sale

by the lowest price

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Can you sell your brand or your category only through the best price proposition?

Challenge #2:

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Bring Value or get organized to be the one that

sells at the lowest prices!

advertize or lowest price

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Let’s look on the problem from other side!

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Crisis is the time of opportunities

Usually the ability of brand to win SOM is limited as the big part of customers are buying on “autopilot”. Now customers are reconsidering almost every choice and can open a new brands for themselves.

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Increase reward opposite to pain

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Brand is the frame which

changes perception of the base product

The similar products can have different perceived values for consumers depending on the brand which is behind that products.

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Perceived value of the brand can

justify it’s price

Brands which will convince consumers that they can satisfy specific consumption goals (relevant in crisis) better than other can justify their prices.

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VALUE for money,

has broader meaning than value for money brands

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How become considered and create

rewarding value for consumer?

There is no “magic pill” for any brand. Each category and brand are unique one. But there are several directional options which can be considered for different categories as a base for further thoughts .

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First of all Don’t act like “nothing happened”

Avoid the 'business as usual' approach in your advertising that can result in ads out of touch with people's concerns during a recession and, eventually, translate into a waste of money

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Consumers are changing

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Shock, fear, depression

Intend to consume smarter

Need of confidence in their choice

Escapism demonstrates

the growing trend in society

Waiting for empathy from

surrounding world

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What do they need from brands

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Proof of correct choice

Feeling that the choice is smart

Understanding of their current

situation from the brand

Self-

Indulgent,

possibility to

run from reality

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Values relevant in crisis:

More for the same money

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Like professional, but more affordable

Performs like more expensive

Smart choice

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Values relevant in crisis:

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Confidence

Less amount, but proven quality

Needs that you can afford

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Values relevant in crisis:

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Understanding

Brand as ally (союзник)

Empathy Brand (сочувствующий)

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Values relevant in crisis:

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Indulgence

Enjoyment/Reward

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Values relevant in crisis:

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Escapism

Feel like in another place

Territory of positive emotions

Territory of positive emotions

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Affordable happiness in crisis

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11,5грн

11,5грн

8,5грн

4,5грн 1,3грн 2грн

Big pleasures are on “pause” mode now. But there are a lot of things that consumers can afford to indulge themselves and feel happiness in black & white period.

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Ролик

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?????????????????

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Are there any break –through media recommendations in crisis times?

Any media thoughts???

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Only 2:

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•Focus big

• Media rules are the same

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Focus big

Xno

Focus on mass-coverage media with proved effectiveness (TV)

Vyes

Focus on key brands, to invest in enough volume for each

Choose the strongest brands which has potential to survive

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Media rules are the same

Media:

is Mathematics is not a poetry

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Media rules are the same

Media has it’s oven rules which works in all the times: • Broad coverage = Big consumer base = Big Share of Market • Consistency of communication = People forget = Out of air-Out of mind • Competitive SOV = Visibility =Competitive SOM • etc. …

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Crisis doesn’t changes media approaches

it changes communications

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I N S I G H T S • I D E A S • R E S U LT S

Make your consumers happier!