25 Economic Predictions for 2009 - Brands that Will Fail And Brands That Will Succeed

The following predictions were made based on the Comprehensive Model for Persuasive Human Communications, which applied the eight fundamental human motivators to the current economic crisis.

1. Hewlett Packard will win in the battle for laptop sales. While its success will affect Dell and Gateway, the most impacted manufacturer will be Apple. Because of its market position as "best," Apple (which has accounted for the greatest share in high-end laptops per manufacturer in ‘08) can expect its share of laptops to decrease in the current market. “Right” choice will take precedence and the Microsoft-based system computers will inspire accelerated dominance.

2. Apple's iPod will increase its market leadership over its nearest competitors. The iPod is in the unique position of owning both “best” and “right” and the values of being an individual (the Apple brand equity) and being part of the group (the inherent value of market leadership). Without a change in message, Microsoft’s Zune will fade rapidly and any discount in the Zune’s sticker price would be counter-productive.

3. Wal-Mart will continue to build its lead as preferred retailer. Being positioned as the “right” choice gives it advantages over Target, which will feel the greatest impact from Wal-Mart’s growth. With only a slight shift in messaging, however, Sears can resurface as an important retail player.

4. There will be resurgence in home buying. The market will improve as the desire for comfort and affirmation overtakes the hesitancy to buy.

5. Delivery and take-out ordering will take the biggest hit in the food industry. Direct-to-home catering and delivery businesses will fare much worse than restaurants in that the experience lacks the sense of community as well as failing in the sense of right, despite a smaller price tag. For most, cooking at home is the most “right” option and has the sense of community.

6. Electric cars will favor Toyota. Granted, the barrier of change increases with a company whose leadership is not firmly established, as is the case with Toyota. However, it owns “right,” something that will beat GM’s “best” and result in the continued failure of the US automaker.

7. Coke will increase its lead over Pepsi. Expect Pepsi’s sales to slip as Coke capitalizes on leadership, affirmation and comfort.

8. GEICO’s recent economic message will not resonate. GEICO’s message of a 15-minute phone call can save you 15% savings will not resonate and we see sales slipping — this despite a large media expenditure. Because no auto insurance provider owns anything close to the definitions of tough times, we see the market as stagnant with little switching and growth.

9. Walgreens will dominate the pharmacy market. Because the category players currently compete only by location and relationships, Walgreens offers greater focus and affirms to be more “right” than “best.”

10. Daily newspapers will continue to slip with the exception of the Sunday edition of the New York Times. The NYT Sunday issue satisfies the need for comfort, community, affirmation and leadership. Look for more national dailies to change their current model.

11. Wii will increase dominance over its competitors, despite the lack of more coveted game titles. Because of Wii’s acceleration, we see slight increases for PlayStation and slippage for X-Box.

12. Bank of America will increase its dominant share over the other major banks. In a stagnant market space, ripe with bad news, the market leader will win by default as they are attributed with the values of comfort, right and community.

13. Starbucks will continue to slip in dominance. Coffee houses in general will begin seeing their share of market declining. Whole bean sales in supermarkets will cut deeply into preference for those destinations.

14. Look for Wendy’s to challenge McDonald’s unassailable position. McDonald’s will continue to be the market leader, but Wendy’s will cut into its market share.

15. More traditional food providers will take share from diet food providers. Diet food providers like Lean Cuisine and Healthy Choice can expect their market share to shift to more traditional food providers like Campbell’s.

16. Verizon will be preferred over AT&T as wireless provider of choice. Familiarity and comfort become less important and the values of leadership, community and affirmation become more important, giving Verizon the edge.

17. Hyundai’s Assurance program, which gives buyers an “out” for dire economic circumstances, will not work and will backfire. The campaign represents an intellectual solution to an emotional problem. Logically, it feels right for the times. But on closer examination, it places the brand into the consumer’s mindset of not wanting to belong to the group that needs it. It violates three of the definitions in tough times. It gives no kudos for community, familiarity and leadership.

18. The NBA will decline in fan interest. Look for some of the more troubled franchises to consider closing, move or sell. Hard times ahead even for the Knicks and Lakers.

19. Office Superstores will contract. Currently surviving on ease of use, those stores will lose sales to online avenues that focus on “Right.” Look for one of the major players to topple.

20. Continued erosion in airlines. Look for all major carriers (with the exception of Southwest) to see major cutbacks in usage. While hubs control much of the choice, we expect to see more price shopping because brands have not answered the eight motivational cues at all.

21. Reduced revenue for NASCAR. Having too many drivers violates the need for focus in tough times. Look for sponsorship to dry up for many teams and attendance at events to diminish. Unless NASCAR adopts the NFL’s model of shared revenue, it looks like tough times ahead for professional auto racing.

22. Increased share of tourism in Las Vegas relative to competitors. The gambling destination answers all eight motivators on the plus side.  Las Vegas will not have as much of a precipitous drop as many other destinations.

23. Growth for cable TV and drops in satellite providers. Comfort, community, and affirmation wins out over promises of more HD and lower prices.

24. Online shopping will continue to eat into the market share of “brick and mortar” retailers. Computer retailers, music and bookstores as well as those selling kitchen gadgets will also find themselves on the outs. Online is just more “right”.

25. The iPhone will start losing popularity. Look for Blackberry to extend its lead. Familiar, community and comfort win out over innovation and aesthetics.

Tell us what you think which brands are in the greatest danger of failure and have the greatest chance of success.

2009 Brands to Watch 2009

Comments:

Really, Zune will fade? It's already fading! That doesn't take much foresight. Now predicting that Bank of America will grow - that's ballsy. How do think they own "right"?
posted by Sturgell on 3/11/2009 3:24:00 PM

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