Pere WEATHERING THE. +: WNTURN: | ECFADC Fil t Tit recent announcement by the National Bureau of Economic Research confirmed what has been a foregone conclusion, The United States is now “officially” ina recession. Amidst daly headlines ‘of bailouts, bankruptcies and job losses, there's no question thatthe downturn is already affecting shoppers’ attitudes and behaviors. Infact, in our stules, weve repeatedly heard that people are “feeling the pinch” and that its affecting their habits, from “trip consolidation” stateges (to save on ‘gsoline) down to individual brand selections in the aisle. ‘Of course, these larger consumer and economic trends impact the packaging of consumer goods. Here, I'l highlight four primary issues to consider in shaping your packaging strategy for success in these difficult economic times. COMPETING AGAINST PRIVATE LABEL seeson is tht shoppers are more wilt onsidr } pay lower-os private label or retail brands For some time nov, ate label hasbeen acepable option within nied of eommodity”cteore (Til uy the sore brand for ugar or pin, ut no for ee or hapa”) WT ' But today, the ange epi expanding de tooth an increased focus on pricing and a dramatic improvement in the packaging and branding of retail brands. aio q 100% JUICE BLEND \win waTURAL FLAVORS support higher price point. Pastesed oii Caf Nae Cr eu eRe ace Cd Pep ne neon ee an ae ee) 26 BRINDa xcs wou brandpackaging com JAx09the appearance ofthe leading national brand Instead, they've moved towards a more sophisticated approach that erophasizes a brand name over generic product escriptors and uses mote refined primary visuals The results that store brands are now well positioned to benefit from the recession, and they ae apy gaining market shore. Walgreen’, for «example, recently announced that its private label sles ad increased 15 percent. For leading national brands the direct implication is that. packaging has to work harder than ever to justify price premiums. While this is easier sad than done, we've seen several strategies that can be effective: Differentiate on a visceral level More than evr, itis critical to have packaging tat simply “looks beter than the competition and, thus, discourages direct prce-based comparisons. Unigue shapes, structures and Aelvery systems ae typically the most efetive strategy in his regard, ait dificult to differentiate when all brands are in the same box or bot. In addition, unigue structures can help shoppers break away fom pre-conesived notions of what product “should” cost For example, Simply Orange was Introduced in a carafe that broke category packaging conventions created differentiation and, ultimately, helped to suppor a higher price point, Unique structures are also easier, to protect legally an, given the greater investment required, les likely tobe copied by store brands Leverage brand personality ‘We've also found that itis very important for national brands to leverage the built-in advantages created through advertising and years of use by connecting with shoppers on an emotional level. Often, this comes by prominently featuring familar character or icon (such as Tony the Tiger), who can link to the underlying goodwill tha shoppers associate with the brand through past experience. Ifnational brands ignore tis emotional component—and end up featuring beautiful Bowls of cereal similar to those on store brand packaging—the notion thatthe produits aren't all that diferent is reinforced. More importanty, this encourages a rational decison that may very well favor the lower-priced store brand Highlight a tangible point-of-difference Inadeltion to connecting emotionally national brands should focus on highlighting tangible product differences relative to. store brands such as unique ingredients or nutrients, Kraft Singles execute ths strategy effectively by usnga brimming ass of milk as its packaging visual, which draws attention toa 28 BRANDxcvcess wwwibrandpackaging com Soe ey ery eo ee eon Pee ey Ce ei) characters like Tony the Tiger, for instance, reinforce underlying Cee primary differentia claim (i.e,"Made with four ‘cups of real milk”). In these difficult times, shoppers need these tangible reassurances to convince them that national brands are “worth the extra money”, In many cases, familiarity alone is no longer enough. And more abstract brand-level claims, such as Budweiser’s recent emphasis ‘on “drinkabilty,”aze typically less compelling, 2 REINFORCING VALUE As households tighten their belts it becomes more important to convey value effectively on packaging, First and foremost, this is a question of message content—and effective strategies typically vary based on the brane'’s positioning, For lower priced brands, direct comparisons (e.g, “40 percent ‘more product than brand A") are particularly effective, since shoppers are more likely to compare options in a recession. ‘But marketers may need to be abit more creative with premium. brands. There are still many ways to “spin” a value message. For example, a brand can be positioned as a less-expensive alternative o a restaurant meal ora trip toa spa, or perhaps as @ “small indulgence” that makes life special. In fact, premium bands typically fare well in economic downturns. For these brands, however it is important to resist the temptation to make price/value the dominant messaging on pack. Highlighting such claims only encourages shoppers to prioritize them in their decision making, And it ultimately leads toa more rational, considered purchase that often benefits the lower-priced brand. Certainly, product quantity (servings per > IANOSateen eee eee eat Cree ets helps fight off the private label threat. pack, price per serving, ee.) can aet as an important value reassurance, but it should not overwhelm the brand positioning. Wsalso important to consider sage placement or positioning, Our research of packaging viewing patterns indicates that packages are not read” in a logical top-to-bottom manner and that “flags” positioned in top left or EXPLORING NEW right corners are typically missed by two-thirds of shoppers, SIZES & PRICE POINTS Recessionary cycles present an important time to consider ‘Thus, the corners ofa package are typically good locations for alternate sizes and price points, Generally speaking, we've seen n quantity, te), but not for primary claims. If that, just as shoppers gravitate towards ends ofthe value the objective isto highlight a price or value claim, the message spectrum (je. budget brands and premium indulgences), they needs to be integrated within the shoppers’primary visual field also move tothe extremes in terms of packaging size. by juxtaposing it near the brand image and/or main visual, Many shoppers look for larger value packs, inorder to geab cost savings (lower price! unit) and to consolidate shopping trips, while others are forced towards smaller sizes to limit absolute spending or, perhaps to prevent waste (unused/spoiled food, et). To capitalize on these trends, marketers should explore new ways of bundling product to offer value, to lock in multiple purchases and to give shoppers reason to feel ‘good about buying their favorite brand. A good example is Frito-Lay’s24-unit “Family Sack. ‘On the other enel of the spectrum, smaller packs targeted to convenience and specific use, such as Kraft salad dressings 102 “on-the-go” packaging, ‘ean be success in ths spending environment despite the higher cost per unit. Ere en eee “Family Sack appeal to consumers Peer eset eee ee eka Pree 30 BRAND» cass ‘wwerbrancpackaging com JAN09