2008-10-13 18:22:04 -

- Brand Idiomatics Isabelle Gauvry, 267-885-9015 "If you can't eat it, keep warm with it or nurture the kids with it, it's over the side." That's how Brand Idiomatics founder and partner Bill Melnick top-lined the findings of the first Consumption Context(R) Index (CCI) published by the company earlier this month.

The Brand Idiomatics Consumption Context Index uses non-traditional

inputs -- economic, cultural, social and political trends and events -- to benchmark and track the context in which consumers are considering, comparing and committing to brands. Armed with this understanding, Brand Idiomatics works with marketers to predict long-cycle shifts in consumer outlook and behaviors, identify the inherent business issues, define the new brand message idiom and develop the best strategies for the business need and the consumption context.

According to Mr. Melnick, the nationally recognized media and consumer trends expert who as Director of Marketing at Vanity Fair helped make the term "Alpha Consumer" part of the modern marketing lexicon, the latest retail numbers validate the primary finding of the report -- that the old definition of value based on aesthetics, features and price has been replaced by a new definition based on functionality and price.

Melnick points to the numbers released late last week by Costco and Neiman Marcus as Exhibit A in making the case for the new value equation -- and for Brand Idiomatics being ahead of the consumption context curve. With consumers across the socio-economic spectrum embracing retail downscaling, the warehouse club's sales of necessities like food and sundries not only offset declines in big ticket purchases like furniture and jewelry, but also drove a $25 million increase in net income. Concurrently, same-store sales in the specialty retail segment of Neiman Marcus, which includes Neiman Marcus Stores and Bergdorf Goodman, tumbled a staggering 15.8 percent.

Referencing a prescient passage from the CCI, Melnick says, "After decades of living far beyond their means, financing their pursuit of the latest and greatest with ever more exotic borrowing modes, consumers are seeing drastic and fundamental changes to their way of life. As a result, they are realigning their priorities when it comes to what they buy, where they buy and most importantly, why they buy."

Implications for Marketers

The implication for marketers is clear -- make the new definition of value part of your core proposition or become irrelevant in the new context -- a situation that is befalling aesthetics- and features-based brands such as Starbucks and Whole Foods as they try to survive in a functionality- and price- driven marketplace.

As Melnick explains, "Brand familiarity will no longer paper over price and value issues. Target learned this lesson when they got out-downscaled by Wal Mart -- but as their new value-based ad campaign demonstrates, they get the new context."

But clearly there are more that don't get it than do. One of the key insights of the report is that marketers need to think about solving consumer's problems rather than a marketing problem, and that means speaking to the customer in his or her own idiom, and demonstrating that you understand the new context of their lives. Melnick points to some particularly egregious examples of "not getting it" from financial services advertising. "Your customers are scared. They've seen the most long-standing and iconic financial services brands collapse overnight. So how will telling them that you've been around for a hundred years show them you understand their issues?"

The Consumption Context Index is published four times a year. The Q2 2008 Consumption Context Index Report is now available for downloading. Entitled "The Morning After Is Here to Stay" the report reveals the emergence of a new definition of value -- and explains what marketers can do to catch up with a consumers who are quickly moving down the price continuum even as they sprint up the value continuum."

BRAND IDIOMATICS, located in Newtown, PA, combines traditional category and audience data with non-endemic econometric inputs - including economic, cultural, political and forward-looking indicators -- to track and predict long-cycle shifts in consumer outlook and behaviors, identify the inherent business issues, and develop the best strategies for the business need and consumption context.

Recent Report Revealed New Definition of Value

Costco and Neiman's provide the proof points