Premium FMCG brands can beat recession

17 September 2009

MONTREUX: New premium FMCG brands can find success in the downturn, but need to justify their positioning and price, and offer consumers a discernable advantage, in order to do so, a study by Nielsen, reported at the ESOMAR Congress 2009, has revealed.

In a joint presentation at the event – covered in more detail by WARC here – Nielsen's Mark Gillespie and Marcin Penconek discussed the results of research undertaken by the company into the introduction of 33 high-end products in the consumer goods sector.

Overall, they found that 23 brands had achieved their initial volume targets, while the ten which failed to do so had suffered either from "low value perceptions" or a "low perceived product advantage" in the eyes of consumers.

"If marketers want to charge a premium, they need to build the brand's position based on a differentiating consumer benefit. This is even truer during a recession," argued Gillespie and Penconek.

At the same conference, Peter Cooper, from CRAM International, the research consultancy, identified four groups of consumers that have emerged in the current adverse climate.

Members of the "direct" category have suffered unemployment and a loss of income, while the "partial" segment have seen some of their friends or family lose their jobs, and now fear the same will happen to them.

By contrast, those in the "atmospheric" subdivision have not been directly affected, but are taking steps to protect themselves in light of the media coverage and economic policies resulting from the crisis, while the "unaffected" have been totally unscathed so far.

Cram predicted the post-recession consumer would exhibit a range of new values, focusing particularly on creativity, community, the environment, responsibility and ethics.

According to Gunilla Broadbent, the president of ESOMAR, there is also an increasing demand for innovation and change from clients in the market research industry, and particularly for the adoption of a holistic mix of old and new tools.

However, this pressure has been combined with that to deliver results both faster and cheaper than ever before, raising concerns about issues linked to the quality and reliability of the data that is ultimately produced.

To read WARC's full coverage of the ESOMAR Congress in Montreux, including more on each of these presentations, click here.

Data sourced from WARC