Marketing across the Divide
Is it the best of times or the worst of times? It depends on how you look at it. Nominal gDP growth is expected to return to an above average range of 3.5-4.0% per the Federal reserve’s latest projection. All the leading indicators of economic growth including retail sales, producer cost inflation and corporate profits are pointing to a sustainable recovery, with the exception of two very important measures: employment and housing. Importantly, these are the two most important wealth creators for the average middle class consumer and thus the broader consumer economy.
With unemployment lingering at 7%, there is no recovery for the average American worker. The U.S. economy lost a record 8.5 million jobs or some 6% of the labor force, yet the U.S. Bureau of Labor reports that the U.S. economy created only 1.1 million jobs, barely enough to accommodate the number of new entrants to the work force. When the numbers of discouraged workers who have stopped looking for work and those that are working involuntarily part time are added in, the Bureau estimates that the true level of unemployment is 17% of the workforce, or one-sixth of American workers who do not have full-time employment. Adding to the challenge is the on-going structural change in the economy, rapid advances in technology combined with increased globalization has greatly impacted middle-class jobs in the manufacturing and service sectors, resulting in low wages and job insecurity for a large segment of the population. Meanwhile a premium is paid to highly educated, high-skill professionals. This is what the “new normal” looks like for a vast majority of American consumers.
Here is the challenge: How can a brand message be stretched across two distinct economies and succeed in an efficient manner? Most marketers will face this daunting task as they craft a new, unifying brand strategy that will align the best product with best message in the best retail channel to be put in front of the best consumer. Marketing brands across this divide will be a major challenge for many marketers of products and services.