Cluttered markets call for clear difference in design

By SIMON HENDERY marketing writer

The message from Dow Design is a bit grim, but at least it comes attractively packaged.

Marketers, Dow tells us, are increasingly under pressure to produce short-term results on tightening budgets.

This is one of the key findings of a client and industry survey carried out by the Auckland-based graphic design consultancy.

Dow's report, The Seven Big Themes of Marketing in Australasia, is presented in a 12-page booklet.

It is - as you would expect from a design company - crisp, colourful, readable, and available on request.

The report summarises the thoughts of about 40 senior marketing managers and industry executives spoken to last year as part of what Dow co-founder Annie Dow calls a "fitness test" of the business.

It is the second time the 11-year old firm has given itself a physical - a process Dow says is about testing that the firm's brand is fitting in the marketplace and that it understands its clients and their industries.

Dow established Dow Design with husband Greg in 1993. The earlier corporate fitness test led to the couple's decision to open Dow's second office, in Melbourne, in 2001.

Packaging up the findings of the latest market analysis in booklet form provided a useful resource to present to clients and prospective clients, Dow says.

The report contains some sobering observations on how the marketing landscape is changing.

"Accountants have taken over the boardrooms and are much more demanding on the bottom line," says Dow. "Marketers are less confident today and you get the feeling the planning horizon has shortened."

The report says many market categories are cluttered and saturated, with no room for growth, apart from through higher efficiencies, aggressive attacks on competitors, or through attrition and acquisitions.

It predicts a "weeding out" of weaker brands as the failure rate of products increases.

Pressure is mounting from retailers who are becoming increasingly powerful through corporate consolidations, which have been prominent on both sides of the Tasman.

An example is the supermarket wars in New Zealand, which have intensified since Foodland Associated acquired the Woolworths NZ group in 2002, giving it the market share muscle to tackle previously dominant Foodstuffs head-on.

The Dow report says there is a sense that marketers are no longer in control of their brands.

As one respondent put it: "It has now got to the point where we are supplied by Woolworths with a list of products that they would like us to make for them. They are basically running new product development for us!"

Pressure to cut costs and increase profits has left the marketing industry with a sense it has "lost some of its standing and credibility", the report says.

Marketers have an increasing need to justify themselves and are having to be more accountable to the business for their activities than ever before. "Measuring effectiveness of marketing programmes is becoming a priority - but difficult to do when budgets are already tight."

That focus on immediate shareholder returns is turning long-term brand planning and strategy into a luxury. "There just seems to be a huge sense of impatience in companies these days," as one marketer put it. "Pressure on profit, pressure on sales, pressure from the shareholders to deliver right now. How do you build longer term brand equity for your brands in that environment?"

One area where cost-cutting is being felt is a shift away from the use of local creative and strategic initiatives to the cheaper option of implementing global campaigns, leading to a drain of skilled staff.

At the same time consumers are becoming more fickle and cynical about slick marketing, and more price-sensitive.

The report concludes - on an optimistic note for a design company - that breaking through the cluttered market requires a clear point of difference and consistent delivery.

What's eating marketers:

* Saturated, cluttered markets make growth difficult.

* Retailers' power is increasing.

* Profit pressures mean increased accountability.

* "Instant gratification marketing" leads to more short-term focus.

* Globalisation means less local creativity.

* Customers are more sophisticated and less loyal.

* Distinct brands can break through the clutter.

* The Seven Big Themes of Marketing in Australasia is available through the website Dow design.