Magazine article Marketing

Positive Outlook

Magazine article Marketing

Positive Outlook

Article excerpt

Amid mixed messages on the economy, big brands are still splashing out, writes Jennifer Whitehead.

Despite being in the middle of the media 'silly season', there are precious few belly laughs to be found in the realm of financial news Indeed, the headlines have told of falling house prices, commodity shortages and higher-than-expected inflation. To top it off, Bank of England governor Mervyn King is warning that the economic recovery could be 'choppy'.

Consumer confidence is being further hit by reports of price rises for everything from sausage rolls to petrol, and that is before VAT is increased to 20% in January. Moreover, while the latest figures on unemployment show a fall, there are public sector cuts still to come. All of these factors are likely to make consumers think twice before splashing out on that next big-ticket item. No wonder, then, the term 'double-dip recession' is being bandied about so freely.

Financial doubt

PricewaterhouseCoopers says the uneven economic signs will spur consumers to try to spread their spending. As a result, many retailers will launch their Christmas promotions even earlier than usual.

'Consumers are getting a lot of mixed messages about the economy and they are concerned about spending cuts and possible house-price movements,' says Andy Lyon, retail partner at PwC. 'In such conditions, they are unlikely to increase their spending in the run-up to Christmas and retailers will want to plan accordingly.'

Lyon believes, however, that better stock planning by retailers means that there will be less need for the level of discounting that occurred around Christmas in 2008.

Ivan Pollard, partner at planning agency Naked Communications, provides a reassuring voice amid the gloom, warning that the industry must not talk itself into problems that do not exist.With brands including Coca-Cola, Vodafone and Sony in his remit, he says he is yet to see anyone with a case of the jitters.

'The vast majority of brands are still feeling reasonably confident that they can market their way through any downturn,' he adds. 'There's a fine line between optimism and confidence, and at the moment our clients are on the optimistic side - they're not reacting.'

British Gas' recently installed marketing communications director, Will Orr, is equally bullish and reveals that the company has no plans to change its marketing message any time soon. …

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