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Wednesday, September 22, 2021

FMCG marketing restrictions: getting the balance right

David Ogilvy famously reminded the world that “The customer is not a moron. She’s your wife”.  That remark neatly encapsulates global attitudes to brands and marketing, highlighted in the Brand Finance Marketing Restrictions 2021 report.

Consumers around the world display a mature and balanced outlook towards brands. They value brands, appreciate the positive impact of brands globally, both on their everyday lives, as well as on wider societies and economies. But they are rarely ‘in love’ with brands, and if brand marketing is restricted in some way, many people might accept such constraints, albeit reluctantly.

On the positive side, in our 12-country survey of consumers, virtually all agreed that brands encourage product quality and improve choice, and nearly as many acknowledged the role of brands in limiting illicit trade. Large majorities of respondents also recognise the positive impact of brands on the economy, job market, media, environment, and supply chains. For sure, some consumers view brands as cynical manipulators, caring more about profits than customers – but this is very much a minority view, in all countries we surveyed.

Similarly, the public expects brands to be a positive force in society. While the need for ‘brand purpose’ can be exaggerated, consumers do not want brands to be silent on the causes that matter to them and there is a general expectation that brands should be doing their part to support society. For example, around three-quarters of respondents expect brands to provide superior product safety and production standards, to undertake ethical sourcing and supply chains, and to have better employment practices than smaller businesses.

In our view, brands can only be expected to deliver these benefits if they have the ability to communicate to the public about their qualities, products and actions, and have the commercial incentive to innovate, challenge incumbents and deliver consumers the choice and quality they expect – in other words, to market themselves. This is a view that the public generally accepts, even if they do find some brand marketing irritating or intrusive at times.

There is little appetite among the general public for sweeping marketing restrictions – fewer than 10 percent of consumers felt there should be a ban on TV advertising, billboards, in-store demonstrations, or distinctive packaging. But consumers and CMOs alike accept that some regulation of brand and marketing activity is both desirable and necessary – a marketing free-for-all is in nobody’s interest. Brand-owners must therefore avoid complacency on this issue and continue to make the case for branded businesses, but also be ready to condemn irresponsible or unsustainable marketing when it does pop up.

CMOs understand the risks of over-regulation all too well. Brand Finance has estimated that a global imposition of marketing restrictions across the alcohol, confectionary, savoury snacks, and sugary drinks industries could result in a whopping US$521 billion loss to businesses. That scenario might seem far-fetched, but any regulation with teeth will still have a significant economic impact. Hence the pleas from marketers that any regulation is proportionate, affecting behaviour in the ways intended and not severely limiting the considerable positive benefits that brands bring.  The general public would appear to be receptive to such arguments – does the marketing community do enough to communicate them?

Brands are integral to how the world operates. Well-managed, innovative, and reputable brands deliver many benefits to society, not just to brand-owners. They are what the global economy turns to in the hour of need. Severe marketing restrictions are catastrophic, not only for brands, but for all stakeholders, from consumers and society to investors and governments.

Steve Thomson, Insight Director, Brand Finance

 Steve has a wealth of experience gained across a 30+ year career focussing on understanding consumer values, attitudes and behaviour around the world.

He’s a renowned expert on the impact of social forces (online social media and offline word-of-mouth) on brand choices, and how these drive commercial outcomes for brand owners.

 

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