"The old rules no longer apply. But in times like this, brands should show what they're made of. Some will fall by the wayside, some will survive and others will thrive.
"To make sure a brand is one of the winners, marketers first need to know what people are doing, feeling and buying. That's why Synovate asked more than 11,500 people across 18 markets of the world," he said.
Hope or nope?
Sherman added: "Much of what happens in the economy is based on how people feel. If they are buoyant, they spend. If they feel there's no hope, they sit on their cash or find a low-risk way to put it to use."
Synovate found out which markets are most optimistic and which are feeling bleak.
Leading the pessimism pack is the United Kingdom (three quarters of all respondents agreed that the economy is going downhill and is going to get worse before it gets better), followed by the United States (69%). Looking across the whole survey, the most pessimistic markets were, again, the UK and the US.
The more positive markets were Denmark (20% agree that the economy is strong) and Brazil (14%). Out of all markets surveyed, only 4% of respondents globally said 'the economy is strong'.
Keeping us up at night
So what are people most frightened of? What's driving insomnia across the world? Fully a third of all respondents chose "Losing my job / household income earner losing job" as the top choice. "Losing my job" was the top fear among Americans at 24%, followed closely by "Not being able to pay the mortgage or rent" (23%).
Money habits you can bank on
The survey asked people if they had to make cuts in the past six months and whether their saving, spending and investing habits had changed.
An overall 59% of respondents across all markets surveyed have made cuts in their spending in the past six months. The top two markets were Turkey (80% or four in every five people have made cuts) and the US (78%).
Americans have cut back on luxury spending the most, with 82% spending less. Americans are also coming to grips with living on a tighter budget by changing their impulse buying habits the most (76% now do this less).
The markets with the fewest changes in spending habits are Denmark and Hong Kong.
Categorically speaking (or, which categories are feeling the pinch?)
The survey also asked people whether they have been spending more, less or the same across 12 categories including dairy, alcohol, canned goods, cosmetics and others.
Overall, 27% of people say they have spent less on cosmetics, more than any other category, but it must be noted that the survey covered both genders.
Following cosmetics was soft drinks (29% say they have spent less) and alcoholic beverages (25%).
Mike Sherman made the point that compromises may be made in quantity, quality or both.
"Take alcohol as an example: The people who have compromised their spending the most are the French (48%) and the Brits (46%). These are both countries where drinking is part of the culture, albeit in differing ways. I suspect the story behind these numbers is that people are choosing to drink cheaper, rather than drink less.
"Marketers really need to understand the motivations of the people they are trying to sell to, to get inside their heads. This is always the case, but never more so than when times are tough.
"The mistake would be to assume that everyone will respond in the same way," he said.
Brands: Make mine a no-name
Mike Sherman noted that this is equally a time of danger and of opportunity for brands, as many consumers are open to change in times of crisis.
"There are more changes in brand leadership in a downturn than in good times. Clearly there are good opportunities for generic or cheaper brands; and for the more expensive brands it is a time to build on loyalty and protect, maintain and build on position.
"Either way, the brands that market themselves the most appropriately during this time will do the best. It's all about building a recession-proof brand. Fast."
The survey also asked people whether they had already switched to a cheaper brand, were planning to switch to a cheaper brand or planning to use the same brand across the same 12 categories.
In general, more people have already switched to cheaper brands than are still planning on doing so. Those who have already switched are in France (44%) and the US (36%). However, there are still significant numbers of people planning to switch and room to maneuver for marketers.
Take canned goods as an example. An overall 10% say they are still planning to switch to a cheaper brand, 18% already have and 58% will stay with the same brand(s). In the US, 13% say they still intend to switch.
Bob Michaels, US-based Senior Vice President of Synovate's Consumer Insights group, pointed out that in virtually all categories, the US is among the highest in terms of proportion of consumers who say they have already switched to cheaper brands.
"The challenges for marketers are multiple: Ensuring coverage of multiple price points to retain customers who are seeking cheaper brands, effectively targeting shoppers who are price sensitive versus those who are less so and doing so differentially by product category, capturing consumers who are now open to new brands and building loyalty -- and then retaining that loyalty through the inevitable economic recovery."
Recession? What recession?
The survey also explored some attitudes to the economy via a series of statements. Some people will always feel immune to the news and 28% of all respondents agree that 'I find the economy boring and don't pay much attention'. This was most prevalent in Turkey (42%). However, the flipside is that seven in ten people (69%) obviously think the economy is worth paying attention to. Eighty-nine percent disagreed with the statement in the US.
Peace of mind comes with full pantries for 17% of all respondents. These people agreed with the statement 'I have started storing food in case prices go even higher'. The top two markets agreeing were Mexico (37%) and the US (33%).
Bob Michaels said: "Warehouse clubs and bargain aisles in supermarkets are increasingly prevalent in the US. Not surprisingly, with the recent history of commodity price increases, a sizable minority - one third - of Americans say they are stocking up on food items."
Economic instability and the uncertainty that accompanies it are changing lives too. More than a third of all respondents agreed that they have changed a major life decision due to the current economic situation.
About the Synovate global economy and prices survey
This Synovate In:fact survey on the economy and prices was conducted in November 2008 across 18 markets and with over 11,500 respondents. Synovate asked respondents about their views on the economy in their country, their changing spending habits and attitudes to the current state of financial affairs.
The markets covered by the survey are Belgium, Brazil, Bulgaria, Canada, Denmark, France, Greece, Hong Kong, Malaysia, Mexico, the Netherlands, Romania, Russia, Serbia, Taiwan, Turkey, the United Kingdom (UK) and the United States of America (US).
