Looming Financial Crisis, Brands and Commodities

I don’t see the Financial Markets settling soon. Global Financial Markets will stay volatile till 2020, possibly beyond. It’s like a FINANCIAL BAZOOKA, like a train coming straight at you and you are not going to stop it by standing in its way. I see more financial bloodbath and rocky times ahead for many countries & their markets. Simple investors will have sleepless nights and smart investors will have peace of mind with their funds. But the question is where to park your funds when markets are so uncertain and unpredictable?

The Answer: Follow the basic rule of LIFE and invest in REAL ASSETS for Wealth Preservation. The global economy stands at a crossroad of growth and decline and few financial markets might even collapse. If we analyze economic history, we see that there is a recession in the global economy after every 7/8 years. So it’s long overdue now and which is why 2016 has started on a rocky note as markets went down in China, Europe, US and Asia. Financial markets look too choppy at the moment. According to Sam Zell—American Business magnate and Real Estate mogul:

US economy is knocking at the doors of deep recession in the next 7 to 11 months. Global economy is witnessing a bigger crisis which will last longer and perhaps will be more severe than the 1930s… History is repeating after 83 years and many investors are not aware of the gravity of the situation

So what’s a MARKETERS ROLE IN TOUGH TIMES? Consumers are very sensitive to Brands. FMCGs are much stable even in hard times when the economy hits rock bottom but the same doesn’t apply to Retail especially for Auto and Luxury markets as these two sectors suffer the most. The question that Economists frequently ask: Can Brands sustain themselves in times of hardship when companies cut their Marketing budgets?

The answer is simple; Brands can live long if they are real Brands (and not commodities) because of their relevance for and being the preference of their target segment. In a volatile Economy, Brands who share the same Category Values suffer the most because consumers end up making decisions based on Price. In these times, Marketers who depend on huge budgets suffer the most because they depend on Advertising as a means of influencing Consumer decisions unlike Brands which are grown organically and are sustainable in a recession economy simply because their consumers’ habits and reactions depend least on communications or any tools that influence their call to action. In tough times, Brands survive and thrive over commodities, for example: McDonald’s globally and Saudi Brands such as Al Baik and Al Marai will still perform well, like previous times

It is only in uncertain times that Marketers can innovate and come up with strategies to move ahead and support the companies’ reservation on spending

Shan Saeed is Chief Economist at IQI Holdings whose expert views have been aired on CNBC, Bloomberg and Al Jazeera English. He advises clients in the Middle East and South East Asia

Said Baaghil is the ‘Unconventional’ Branding and Marketing Adviser to reputable companies in the Middle East, an author of many reputable books including the ‘The Power of Belonging’ and a Speaker. Baaghil appeared in books published by America’s experts on Branding and Marketing such as Dan Hill and Libby Gill. Most recently Baaghil was interviewed by world renowned Brand Consultancy firm Siegel+Gale on Branding in the Middle East

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