Mexico: Brands need to go back to basics
Sergio Olavarrieta Marin
Associate, Kantar Consulting Mexico
One look at the 2018 BrandZ Mexico shows us an interesting polarization: powerful brands from previous years have seen their value diminished today (Televisa, Bimbo, Liverpool, Volaris), and brands focused on more basic needs, such as telecommunications and financial services, have grown (Telcel, Telmex, Banorte, Azteca). Why is that?
About the decrease in value
Many companies today focus on creating emotional brands. They invest a great portion of their budget in generating feelings. The desire to touch the heart of audiences is almost a constant in campaign communications.
How is it, then, that a company striving to be emotional loses value? There are two main reasons:
1) Failure to connect feelings and emotions to business basics.
2) Referring to people as consumers or buyers instead of individuals.
About basic needs
Mexicans’ main concerns now are the following (according to Kantar Consulting Global Monitoring):
1. Strong concerns about the financial situation
2. Mistrust in authority
3. Preference for small, local brands
All of those concerns can be explained by what we call the “Healthy Recession” trend. It means individuals are looking for alternative options to the best known names – those that provide them with a memorable experience. There’s a constant search for economic options that explore creativity. People want brands that solve their basic needs first, such as being in touch with others, living a fun life, offering access to opportunities, and that secondly deliver on their promises.
Four ways brands can grow their brand value this year
1) Articulating the influence architecture from a functional standpoint
A brand’s influence capacity has four stages: functional, emotional, life-changing, and influential. Each one builds upon the previous one; that is, there is no emotional proposal without a functional base. The challenge of what is functional, as we see with the BrandZ brands this year, stems from differentiation from a brand’s competitors. The closer a brand is to resolving a basic need, the greater the influence capacity.
We recommend that brands in Mexico focus on the following consumer needs of Mexicans, which Kantar Consulting Global Monitor identifies as the most pressing:
1. Having enough to retire (money, property, peace of mind, etc.)
2. Conquering the fear of lack of security.
3. Creating the feeling of belonging.
4. Supporting the local economy.
5. Buying durable goods.
6. Having enough rest.
7. Getting away from the pressure we put on ourselves.
8. Having time to have fun (cooking, sports, movies).
9. Having a little escape from everyday reality.
2) Focusing on benefits people receive, not brand attributes
What brands offer is not what really matters to people; what matters are the benefits a brand provides. What’s the difference between the two? Let’s give an example:
· Offered attribute: Delivery in less than 24 hours
· Perceived benefit: Avoiding impediments to someone’s daily plans
This seems absurd, but the number of brands that base their communication on their offering’s attributes are in the majority. Let us remember that today people have unprecedented power. This makes it essential that we focus on the impact our brands have on them.
3) Thinking about a healthy recession
Current financial conditions in Mexico are far from desirable, but people haven’t lost their optimism. Today, we speak “low-cost premiumization”, which in addition to being accessible provides hope, inspiration and fun. As one clear example, foreign fast-fashion brands (Zara, H&M, Bershka), offer opportunities to build a modern identity at a more accessible cost relative to high-end couture brands. As one shopper said: “It means bringing fashion into my life".
Let us remember that this is not about reducing options, but rather making something valuable more accessible.
4) Delivering on a promise
The last and most important brand influence challenge is to do what we promised to do. The key, to anyone building brands, is in being measured on what is promised and ensuring that it is done consistently.
We suggest brands going back to basics. It is basic needs that are driving individuals’ behavior today, and at the same time providing opportunities for business development and innovation.