Leveraging Brand Value in a Downturn

It is hard to find interesting success stories during the current economic environment but ironically I came across some information from the early 2000 recession years that was retrospective of the early '90 recession years.

The case study illustrates what might have been the beginning of the end for Bear Stearns.

"In the face of a slowing economy, most companies scrutinize their physical assets in order to assess what is critical for their business and what is expendable. However, these same companies also decide to cut investments needed to support their intangible assets, including brands, without even a cursory examination of the ramifications." - Interbrand

Lessons learned from the recession of the early ’90s are illustrative in today’s potentially serious economic slowdown. The following graphs are examples of industries and companies where a well-managed brand alleviated cost and inflation pressures and stresses on earnings in order to maximize share price.

Merrill Lynch vs Bear Stearns - 1990 to 1993 (Merrill ramped up brand investment in the last recession)




We all know the outcome in the case illustrated above. And while there were certainly many reasons for the demise of Bear Stearns it is more important to look at Merrill Lynch and how they leveraged their brand value during troubled times.

This market is such a mixed bag for multifamily housing that I think we will see some interesting power shifts in the lending community, building product manufacturers and other service providers that have huge exposure to the hardest hit areas of the economy. Those in a position to focus on the current opportunities and prevailing trends as we exit the broader economic downturn will reap the rewards for years to come.

It's not necessarily all about advertising but it is about protecting your brand and looking for the strategic opportunities even though the race seems harder than ever.