Due to an evolving economic landscape and shifting consumer and family values, communications strategies must be re-examined and tailored by category to meet new consumer needs. Iconic brands have disappeared from the landscape, while others are emerging as new heroes.

1. THE DNA OF BRAND
DISTINCTION 2010
Transition, Transformation and Activism
in the New Consumer Economy
By:
Allyson Hugley
Director of Insight Creation, MS&L

2. THE DNA OF BRAND DISTINCTION 2010:
Transition, Transformation and Activism in the New Consumer Economy
As 2009 draws to a close and marketers prepare for 2010, the unprecedented changes that defined
the past year must be acknowledged, analyzed and understood to survive and thrive in a radically
transformed marketplace. The extraordinary values recalibration that consumers are experiencing as
a result of the near collapse of the global economy is expected to define purchasing priorities for a
generation. The brand landscape has also been transformed. Icons disappeared, stalwarts teetered on
the brink and new heroes emerged. In the brave new marketplace born out of the ‘Great Recession’,
64% of consumers say they will never spend as freely as they did before the recession, and 62% say they
do not miss many of the things they gave up because of the recession.1 Given these market forces and
trends, brands have two choices - distinction or extinction. Only brands that achieve true distinction
and “non-negotiable” status will survive this protracted period of economic challenges. Thus, it is more
important than ever for marketers to fully comprehend and effectively activate around the evolving DNA
of brand distinction.
To capitalize on the shifting
DNA of brand distinction in
2010, marketers must come to
terms with the fundamental
truths of the times. First, 2010
may look the same or worse
than 2009 as U.S. consumers
continue to face rising
unemployment. While many
consumers believe the worst
of the recession in terms of
steep job losses and declining
asset values is over, most do
not see the economy as in
recovery. Forty-five percent
of consumers think it will take
three to five years for the
economic turmoil to be over.2
Second, the DNA of distinction will look very different from what it was just a year or two ago. Not only
have consumers come to expect brands at all price points to deliver durability, safety, and reliability,
but the latest generation of brand differentiators – empathy, environment, CSR – have also devolved
into “table stakes” during this most recent recessionary period. Even style and design no longer qualify
as differentiating traits for brands with 74% of consumers expecting to find products with flair or style
even when they pay a lower price.3 While brands that do not offer core benefits to consumers are fast
tracking toward extinction, brands that only offer core, “table stakes,” benefits are apt to flounder and
die a slow death drowned in a sea of sameness.
Third, consumers need active and ongoing engagement with brands - especially at a time when more
passive engagement methods, such as advertising, are being filtered out. According to GfK Roper
Reports Worldwide, 77 percent of North American consumers say they avoid advertising at least
sometimes. Brands must rally consumers around like-minded core values to create consumer activism
and loyalty. This is why brands that ‘friend’ consumers will be key in 2010, because it goes beyond
engagement or even co-creation to a deeper level of trust, predicated on sustained conversation and
listening and an openness to altering a brand’s DNA based on consumer counsel and advice.
1
“The Yankelovich MONITOR 2009/2010” | 2
“The Yankelovich MONITOR 2009/2010” | 3
“The Yankelovich MONITOR 2009/2010”

3. Distinction Is Possible
Yet, brands that fit consumers’ lifestyles can continue to command a premium place of distinction
even in one of the most challenging economic environments since the Great Depression. MS&L’s 2009
Brand Distinction Survey found 66 percent of consumers agreeing that no matter what happens in the
economy, there will always be brands that they are willing to pay more for. After closely watching the
evolution of the brand landscape and consumer preferences over the past year, we believe at MS&L that
a new paradigm for brand distinction is emerging and that the DNA of distinction in 2010 will have five
defining characteristics:
 Navigation
 Alchemy
 Elasticity
 Portability
 BBF Status
Navigation
After a year of falling economic indicators and rising anxiety, consumers are gravitating to brands
that are able to help them arrive at a better physical or emotional place. Half (52%) of consumers are
feeling more exposed to the possibility of losing everything now compared to a year ago4 and they are
either looking to navigate through or around this lingering period of uncertainty. The brands best able
to help them do this will rise above the fray. Navigating through the current period is about helping
consumers feel less vulnerable and more in control. Six in 10 consumers, up significantly from a few
years ago, are working hard to come out on top in every situation – from the least important to the most
important.5 Navigating around the current period is about providing consumers with small, economical,
and sometimes unexpected escapes. There is tremendous opportunity to achieve brand distinction
by engaging consumers in ways that take them to a different, more positive, emotional place. Even as
trends suggest consumers are going “back to basics” and focusing more on pragmatic purchase drivers,
the power of emotive triggers should not be underestimated. Humor is more apt to enhance a brand’s
or advertisement’s talk value than information about product and service benefits. Again, functionality is
“table stakes,” transcendent experiences differentiate. And, according to MS&L’s 2009 Brand Distinction
Survey, nearly half of consumers are willing to pay a premium for a brand that offers a truly unique
experience.
Alchemy
Nine in 10 consumers cut back on something this past year6 and decisions around trade-downs and
trade-offs are no longer limited to category-specific consideration sets. Every brand decision is in
competition for share of wallet. Now more than ever it is critical that brands establish themselves
not only as leaders within their category, but leaders across category. Mixing of brand DNA across
categories to better align with how consumers are thinking about and evaluating brands – holistically
rather than category by category - is central to differentiation in today’s marketplace. By aligning
complementary strengths, brands are better able to capitalize on naturally existing lifestyle intersections
to engage consumers and to bring unique offerings to market. One example is the recent alliance
between American Airlines and The Food Network, which enables American Airlines to weave exotic
locales into the storyline of the Food Network’s hit reality show The Next Iron Chef, while introducing
its services to a discerning new audience of ‘tastemakers’. The innovative integration highlights the
strengths of both parties - American’s global network and culinary services and the Food Network’s
appeal to culinary exploration – to effectively convey brand messages of both companies in an
entertaining fashion. By tapping into travelers’ passion for food and foodies’ passion for travel, the
brands are magically mixed for greater consumer engagement.
4
“The Yankelovich MONITOR 2009/2010” | 5
“The Yankelovich MONITOR 2009/2010” | 6
“GfK Roper Reports Worldwide 2009”

4. Another example of alchemy is the recent collaboration between the AMC period drama, Mad Men, and
its partnership with clothing company Banana Republic. Window mannequins were outfitted in 1960s
outfits while shoppers were offered the chance to win an on-set appearance. This marketing execution
was unique because it was equally attractive to men and women, and distinctive, because it allowed
Banana Republic to create emotional connections with consumers who – right now – yearn for the days
of ‘Americana’ when everything was simpler and more predictable.
Elasticity
The nation and consumers have been significantly changed by the Great Recession. Two-thirds of
consumers believe the current recession will change the nation forever.7 Another half (48%) believe the
recession will change how they shop forever. Consumers want to see that brands are evolving to adapt
to the new reality with them. Coming off of a year where consumers have had to get creative and stretch
themselves to adapt to the “new normal,” many are looking to see how brands are staying rooted to
their core values propositions, while stretching the boundaries of the benefits offered to consumers. A
recent example of elasticity is the ‘flavor transformation’ that Wrigley’s 5 Gum has provided consumers,
while arguably transforming the entire Wrigley’s business model. By evolving the staid Wrigley’s
spearmint gum (and multiple flavors since then) into a new brand that appeals to youth with provocative
taglines such as ‘stimulating your senses’ and ‘5 is the New Black’, along with ample opportunity for
content co-creation on YouTube and Facebook, Wrigley has proven that distinction can be achieved
without significant product innovation or new category introductions. Rather, it is about appealing to a
consumer’s ‘taste’ for what they are familiar with -- but with an unexpected twist -- and then carving out
enough room in the brand’s DNA to allow for the brand to transition and transform to speak to a new
generation of consumers. Given that gum has eluded extinction for 5,000 years, continuing to evolve on
the category experience is definitely something to chew on.
Portability
Consumers are engaging less with brands at traditional points of purchase. More than half of online
Americans say the recession is causing them to spend more time on the Internet, where they are
increasingly researching purchases to suppress impulse buying and shopping for deals.8 More consumers
are also bypassing traditional brand messaging channels. Use of DVRs to skip commercials is up almost
40% since 2007, for instance.9 As consumer habits continue to evolve and adapt to new economic
and technological realities, brands best able to leverage digital and mobile technologies to create
mechanisms for delivering on brand promise outside of traditional retail occasions, media channels, and
points of brand engagement will be in the best position to maintain and grow market share.
BBF (Best Brand Friend) Status
The balance of consumers’ relationships with brands is shifting from transactional to social. Brands best
able to establish social connections with and purpose for consumers on- and off-line are poised for
distinction. The 2009 MS&L/PRWeek Social Media Survey of communication professionals found that
while only 54 percent consider social media “very important” to connecting with consumers, 79 percent
expect social media to have more of an impact of business over the next year or two. But for consumers,
distinction requires that online relationships be supported and transferrable to the off-line world. Indeed,
according to MS&L’s 2008 Global Values Research, more than eight in 10 Americans say that so much
contact today is virtual that it is more important than ever that companies prove to people who they are
in everything they say and do. Brands able to best establish and sustain social relevance for consumers
– on- and off-line – will achieve differentiation. Zappos exemplifies what it means to be a BBF. The
customer experience offered by Zappos has been described as “like talking to a friend that happens to
sell shoes.” Zappos achieved its rare BBF badge by establishing a personable brand that is friendly and
helpful, and by leveraging social media channels such as Twitter to create sustained opportunities for
fact sharing and relevant branded conversations with consumers.10
7
“The Yankelovich MONITOR 2009/2010” | 8 “Iconoculture, MarketingVox.com 3.30.09” | 9 “The Yankelovich MONITOR 2009/2010”
10
“Balwani, Samir, Mashable.com, Presenting: 10 of the Smartest Big Brands in Social Media, February 2009”

5. After taking into account the five DNA characteristics of distinct brands, activation pillars for achieving
brand distinction in 2010 will include:
 Strange Bedfellows: Over the next year, more brands will look farther outside their category to form
alliances with brands that share similar consumer lifestyle intersection and passion points. We will
also see more brands in industries hardest hit by the recession looking to form alliances with power
brands in unrelated categories or with entertainment properties to capitalize on equity exchanges, or
transfers, to achieve distinction.
 Newstalgia: In 2010, more brands will continue to tap into the wisdom of the past to comfort
consumers with familiar imagery and the assurance of success through tried and true methods. But, a
youthful twist and refresh is required to speak to the times. Old is new and distinction will be defined
by classic messages and images delivered with a youthful and modern sensibility.
 Hyperlocal: As technology continues to allow for deeper drill downs into individual consumer needs
and consumers engage more with brands on a one-on-one level, hyper local and highly customized
offerings that deliver benefits to individual consumers on-demand and irrespective of location will
thrive.
 Distinctively Digital: In 2010, more brands will leverage new social media and mobile tools to help
navigate consumers to better physical and emotional states. Brands best able to capitalize on the
power of digital and mobile channels to offer consumers transcendent, social, and customized
experiences on- and off-line will achieve distinction and gain market advantage. Can we ever imagine
a world without GPS?!
The new DNA of Brand Distinction for 2010, while predicated on proven fundamentals, is a fresh spin – a
touch of Newstalgia, if you will, on what brands need to do to avoid extinction in a challenging economy
that is not expected to fully recover for several years. It is a call-to-action and a roadmap for brands to
evolve beyond “table stakes” benefits. The core components of the new DNA of distinction – navigation,
alchemy, elasticity, portability, and sociability (BBF)–coupled with core activation pillars serve as a
guide for how brands can move consumers toward the highest level of brand engagement: activism. By
motivating consumers toward brand activism, on- and off-line brands are able to become so embedded
in consumers’ lifestyles that their value and relevance become non-negotiable – the coveted and rare
status that allows brands to not only survive, but thrive, in good times, and bad.