Winning Share In A Recession By De Positinoning The Competition 5 7 09

Win Share In A Recession:De-position the competitionWin Share In A Recession:De-position the competition

May, 2009May, 2009

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© 2009 EMM Group

The recession puts many companies in a share fightThe recession puts many companies in a share fightThe recession puts many companies in a share fightThe recession puts many companies in a share fight

The current environment presents many challenges:

Demand contraction: In many categories the consumers and customers are spending less and postponing purchases of large-ticket items.

Price-based competition: Many companies have competitors who cut prices to maintain volume; private label products gain volume in consumer staples.

Volume mix changing: Many companies are experiencing a shift towards lower-priced products in their portfolio.

Understanding the changes in consumer attitudes and behavior is fundamental to winning share.

However, there are also opportunities:

Consumers attitudes are changing rapidly. For the nimble player this represents an opportunity to gain share from industry leaders.

92% of the US workforce is still employed and spending money to lead their lives.

Share of wallet may actually go up for some categories as consumers skimp on “non-essentials” and spend more time at home.

Our research during boom years showed that Our research during boom years showed that consumers value recognition and achievementconsumers value recognition and achievementOur research during boom years showed that Our research during boom years showed that consumers value recognition and achievementconsumers value recognition and achievement

Want to be recognized as a winner in the culture and economy of growth and

success, with the visible signs to prove it.

High performance, superior design aesthetics

Recognized brand heritage, leading edge, superior

ingredients and components

Wealth, badge value

Feel smart, proud, powerful and successful, trusting in

continued prosperity

Social Recognition + Sense of Achievement

Highest Highest ValuesValues

Features & Features & AttributesAttributes

Functional Functional Benefits Benefits

Emotional Emotional BenefitsBenefits

Values Of The Materialist Consumer*Values Of The Materialist Consumer*Values Of The Materialist Consumer*Values Of The Materialist Consumer*

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© 2009 EMM Group

*Based on EMM Group’s research in Food and Beverages, Retail, Credit Cards, Consumer Borrowing (2005-2008)

Our recent research shows that the recession has Our recent research shows that the recession has brought a shift in consumer valuesbrought a shift in consumer valuesOur recent research shows that the recession has Our recent research shows that the recession has brought a shift in consumer valuesbrought a shift in consumer values

Want to be recognized as a winner in the culture and economy of growth and

success, with the visible signs to prove it.

High performance, superior design aesthetics

Recognized brand heritage, leading edge, superior

ingredients and components

Wealth, badge value

Feel smart, proud, powerful and successful, trusting in

continued prosperity

Social Recognition + Sense of Achievement

Want to re-establish their security and responsibility by re-grounding themselves in a

world characterized by honesty, fairness, reliability and authenticity.

Less wasteful, authentic, fair, honest

High quality: price ratio, fair value, highly functional

Timeless, authentic brand experience

Feel safe, wise, smart and disciplined,

grounded and balanced

Security, Sense of Responsibility

Highest ValuesHighest Values

Features & Features & AttributesAttributes

Functional Functional Benefits Benefits

Emotional Emotional BenefitsBenefits

Highest ValuesHighest Values

Features & Features & AttributesAttributes

Functional Functional Benefits Benefits

Emotional Emotional BenefitsBenefits

Values Of The Post - Materialist Consumer*Values Of The Post - Materialist Consumer*Values Of The Post - Materialist Consumer*Values Of The Post - Materialist Consumer*

Consumers are re-evaluating their choices, providing an opportunity to win share.

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© 2009 EMM Group*Based on EMM Group’s research (2008-09), Yankelovich Monitor, Economist Intelligence Unit.

The values shift brings an opportunity for the nimble The values shift brings an opportunity for the nimble brand to win sharebrand to win shareThe values shift brings an opportunity for the nimble The values shift brings an opportunity for the nimble brand to win sharebrand to win share

Complementary components: (1) position my brand (2) de-position the competition

5© 2009 EMM Group

There are potential opportunities to win share from targeted competitors that are:

Perceived to have values of the pre-recession years (e.g. Starbucks, Nieman Marcus)

Unable to prove their worth to increasingly value-conscious consumers (e.g. Estee Lauder)

Unable to emphasize the new values of safety and trust and guarantees (e.g. exotic and organic beverages and foods, premium bottled water)

Low price but limited to low performance (e.g. private label paper towels)

Unable to invest in engaging consumers with an updated value proposition (e.g. private label)

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© 2009 EMM Group

There are 6 Steps in the process of Winning Share by There are 6 Steps in the process of Winning Share by De-Positioning the CompetitionDe-Positioning the CompetitionThere are 6 Steps in the process of Winning Share by There are 6 Steps in the process of Winning Share by De-Positioning the CompetitionDe-Positioning the Competition

Your attack plan has to be focused and very targeted.

1. What’s the market map?: Start with the consumer and the way in which segmentation and brand perceptions have shifted.

2. What’s the consumer opportunity?: Identify the shifts in consumer attitudes and behavior bought on by the recession.

3. Share from whom?: Identify which competitor(s) you are targeting to take share from – the more focused the better.

4. How can we win the competitive comparison?: Position the brand to benefit from the trend and de-position the competition

5. How to coordinate your attack?: Leverage your portfolio (wherever possible)

6. Strike rapidly: Develop the retail, communication and promotion campaign to strike rapidly, followed by relevant series of innovations.

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© 2009 EMM Group

It all starts with the market mapIt all starts with the market mapIt all starts with the market mapIt all starts with the market map

ExcitementEnjoyment

Progressive

Traditional

“I love to party and try new things. I am game for a cool new beer if it helps me amp up the party.”

“I love to be at a party and a part of the

scene. Drinking beer helps me fit in and

enjoy the moment.”

“I have a beer to relax. It is a great way

to kick back and enjoy myself with

friends and family.”

“I love the taste of a good beer. I seek out

new ways to enjoy my beer.”

Beer Category Example

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© 2009 EMM Group

In the boom years (2004-2008) a perceptive brand builder In the boom years (2004-2008) a perceptive brand builder could find the dominant values trendcould find the dominant values trendIn the boom years (2004-2008) a perceptive brand builder In the boom years (2004-2008) a perceptive brand builder could find the dominant values trendcould find the dominant values trend

ExcitementEnjoyment

Progressive

Traditional

• Seeking unique and fresh experiences • Using badge brands with recognized

heritage• Being on the leading edge • Increasing health consciousness –

strong light beer volume, emergence of ultra-lights

Progressive Excitement

Progressive Enjoyment

Pass OutSleep

Broad Category Values Trend

Beer Category Example

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© 2009 EMM Group

Coors Light achieved 13 straight quarters of Coors Light achieved 13 straight quarters of growth by capitalizing on this trendgrowth by capitalizing on this trendCoors Light achieved 13 straight quarters of Coors Light achieved 13 straight quarters of growth by capitalizing on this trendgrowth by capitalizing on this trend

ExcitementEnjoyment

Progressive

Traditional

Progressive Excitement

Progressive Enjoyment

Pass OutSleep

Miller Lite

Bud Light

3 years ago Current

Coors Light de-positioned larger competitors by being on trend and innovating on its core

benefits of cold and refreshing

Coors Light

Beer Category Example

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© 2009 EMM Group

In the recession years, there's a shift in values In the recession years, there's a shift in values and a new opportunity for an agile brandand a new opportunity for an agile brandIn the recession years, there's a shift in values In the recession years, there's a shift in values and a new opportunity for an agile brandand a new opportunity for an agile brand

ExcitementEnjoyment

Progressive

Traditional

• Being responsible - Creating more meaningful/special experiences at home instead of going out

• Emerging trend of frugal being cool• Focusing on quality (ingredients, authenticity, etc.) –

seeking higher value• Defining own relaxing experiences (e.g. food pairing, beer

with home games)• Stocking multiple beers – my beer, entertaining beer• Digital lives - more influences on our decision making

Progressive Excitement

Progressive Enjoyment

Pass OutSleep

Shift in Category Values Trend

Beer Category Example

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© 2009 EMM Group

MillerCoors has an opportunity to capitalize on MillerCoors has an opportunity to capitalize on the shift to further marginalize Bud Light the shift to further marginalize Bud Light MillerCoors has an opportunity to capitalize on MillerCoors has an opportunity to capitalize on the shift to further marginalize Bud Light the shift to further marginalize Bud Light

ExcitementEnjoyment

Progressive

Traditional

Progressive Excitement

Progressive Enjoyment

Pass OutSleep

Coors Light

Miller Lite

Bud Light

Bud Light

Current Future

..while putting downward pressure on Bud Light to dilute its

amorphous brand positioning

Now Miller Lite can capture the shift from Excitement to

Responsible Enjoyment by owning the benefit of taste in light beer

Beer Category Example

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© 2009 EMM Group

Another example of the pre-and-post crisis shift: Share Another example of the pre-and-post crisis shift: Share Win Strategies between Apple and MicrosoftWin Strategies between Apple and MicrosoftAnother example of the pre-and-post crisis shift: Share Another example of the pre-and-post crisis shift: Share Win Strategies between Apple and MicrosoftWin Strategies between Apple and Microsoft

Example: Apple’s Mac vs. PC

Advertising campaignApple’s De-positioning

Strategy over the last 3 years

• Ubiquitous (90%+ share)

• Mainstream audience

• Bug-ridden Vista launch

• Poor track-record in recent innovations

• Resurgent brand with iPod success

• Capitalize on category trend towards media-centricity and Internet

• Take share by making Apple more aspirational

Responding post-crisis with a “more for less” campaign to de-position Apple, making its users look indulgent and frivolous

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© 2009 EMM Group

A couple of additional examples of leveraging A couple of additional examples of leveraging values shifts to de-position competitionvalues shifts to de-position competitionA couple of additional examples of leveraging A couple of additional examples of leveraging values shifts to de-position competitionvalues shifts to de-position competition

Deposition premium competition as frivolous and excessive in the progressive economy – e.g. McDonald’s strategy to own the breakfast occasion with a value offering and take share from Starbucks.

Capitalize on shifts that strengthen previous de-positioning strategies – e.g. Dove’s strategy to focus on inner beauty and self-esteem to de-position many externalizing and “idealizing” beauty care brands.

De-position private label products as poor value and less aligned with today’s values (e.g. quality family time and being grounded)

ThankThank YouYouThankThank YouYou

If you would like to find out more, please contact:

Satprit DuggalPhone: 408-202-6244E-mail: [email protected]

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© 2008 EMM Group