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McDonald’s and Virgin have taken advantage of the financial crisis
At the end of last year, Patrick Smith faced a big challenge: becoming the President and CEO of FutureBrand Worldwide, one of the world’s leading branding and design consultancies, in the middle of the global economic crisis. The company has 25 subsidiaries around the world—including the one in Argentina—and clients such as Coca-Cola, Unilever, Nestlé, Microsoft and Exxon. During his latest visit to Buenos Aires, the Englishman sat down with El Cronista.
What is the most important change that the crisis has provoked between consumers and brands?
The relationship is more intense. In times of insecurity, consumers seek brands in which they can trust. In the case of financial services, for example, they are talking less about innovation and more about simplicity, transparency and security.
Are there brands that took advantage of the crisis?
Yes, when you find yourself in a financial crisis you have two alternatives. You can freak out or you can search for opportunities ahead. I think that McDonald’s was highly creative. They have always been a company of value for money and they open small cafes with a more premium concept. They were smart because they have started moving into Starbucks’ market. In the United Kingdom, Virgin Telecom, which didn’t have a retail concept, bought at least 60 new stores when the price of commercial properties started to fall. They were fast to enter into a new market. What is wonderful about Virgin is that they see an opportunity and they grab it.
What are you seeing are the main demands from FutureBrand’s customers today?
Added value and innovation. How they can do things in a different and more creative way, but with a lower budget.
Will the end of the crisis be a good time to re-launch brands?
I don’t think that brands can wait until then. They have to evolve continuously, improve their messages and market understanding. The challenge is to emerge stronger from this crisis or depression and take out market participation from their competitors during this period, to emerge as a powerful brand and not to wait for the market to change.
What do you see as the main challenge for brands moving forward?
Focus on their strengths and use a convincing message. When companies are under pressure, they are tempted to do the thing that may not be appropriate for their brands in a long term.
Does the same apply for local brands?
There is certain anxiety around the world. Fear of everything—pandemics, terrorism, environmental issues. This makes people become more conservative and seek for security. Local and regional brands, which are part of the local patrimony and local structure, are able to offer a lot of security. Many people want to know the origin of the products, in any sector, such as food or finance. They want to know how things were made. Local and regional brands can reinforce that.
There is a lot of emphasis in Europe about food industry production. Everybody wants the best. In the middle of this complicated and technological world, where we are bombed with information, simplicity is also appreciated. In the United Kingdom, there are more and more people who have market-gardens of their own in reduced spaces to consume what they cultivate.
