Branding Goodwill: Building and Retaining Brand Value in a Covid-19 World

We’ve entered an unprecedented time in global history. This isn’t the first time a pandemic has hit; however, it is the first time we’ve had to deal with something of this magnitude since the economy globalized. The global economy is at a standstill, and consumers aren’t buying anything besides the necessities (plus or minus a few bottles of alcohol). Further, the abrupt stop in the flow of money has caused the US to lose 6.6 million jobs (4.2% of the entire workforce) in the last week alone.

With the flow of money dammed up, individuals and brands are in a tough spot. If you can’t sell your product, what are you supposed to do?

The Solution is Branding

Marketing doesn’t just communicate value; marketers create and deliver tangible and intangible value as well. Coke isn’t just a top-secret formula of coriander, honey, and lime (yes, really), but Christmas, World-Cup, and entertainment worldwide.

A series of text blurbs around a person with a headset, "Dir Sir: changing coke is like God making the grass purple or putting toes on our ears or teeth on our knees." "Monkey with the recipe is akin to diddling with the U.S. Constitution. After all these years, the original Coke practically runs through our veins." "I feel worse than if I had been betrayed by a husband." "I don't think I would be more upset if you were to burn the flag in my front yard." "My dearest Coke: You have betrayed me."

The the New Coke campaign is a classic example of the power of branding. Pepsi posted a YouTube challenge and ran blind taste tests to show the world that consumers preferred the taste of Pepsi. Mad flex. Coke reformulated to taste better, and the world lost their collective minds in the worst of ways. Coke quickly retreated to their classic formula after learning that taste isn’t the most important feature of their product, and the entire debacle became the favorite example of the importance of branding in every marketing class for the rest of time.

Corporate Philanthropy: Spending Money to Make Money

In 2018 Edelman published research that determined the importance of values-based marketing. Researchers found that 64% of consumers worldwide would buy or boycott a brand based entirely on the brands stance on as little as one social/political issue. This confirmed a global trend in the category, where belief-based consumerism had climbed by 13% since 2017.

“Brands are now being pushed to go beyond their classic business interests to become advocates. It is a new relationship between company and consumer, where purchase is premised on the brand’s willingness to live its values, act with purpose, and if necessary, make the leap into activism” – Richard Edelman, 2018

In the case of the Covid-19 lockdown the importance of building goodwill has never been higher. This is the opportune time for brands to attach themselves to near universally held views, which can be impossible in such a polarized world. Not addressing the virus makes consumers feel callous, alienated, and isolated from a brand. In the best case, brands can create additional value through philanthropic pursuits.

Anecdotal, But Still Evidence

While my sample size was small (five), I thought it worthwhile to conduct a series of short interviews related to the topic. For each of my five participants I started our interviews by trying to subtly find similarly priced consumer goods that related to individuals’ dining habits (alcohol, meat substitutes, peanut butter, frozen dinners, or ice cream, respectively). For each of these, the item had to meet the following criteria:

1) Subject is a daily or near daily consumer of the product category

2) Product cost between $6.00 and $9.00

3) Subject had at least two options in their considered set

Further research with a greater random sample size would need to be conducted to solidify any findings presented here, however this should give us an interesting jumping off point.

Chart: Beginning price, pandemic price w/ $1 Donation, post pandemic price of meat substitute, peanut butter, alcohol, ice cream, frozen foods. All have a peak Pandemic price, followed by post-pandemic price, followed by beginning price.

Each participant was presented a series of variations between their most preferred and secondary options based on their price, and their level of involvement in a Covid-19 response.

All five of the subjects interviewed said that they would be willing to spend extra money (up to 19% in some cases) and choose their second-choice if the brand was making an explicit effort to aid in Covid-19 relief(assuming their primary brand did not). The amount of extra money they were willing to pay wasn’t 1-to-1 however. In the case of our alcohol and meat substitute consumers, they were each willing to spend roughly $2 more for their non-preferred good assuming just $1 of that purchase would be donated. In addition, four out of five cases the subject said that the second-choice option would become their preferred brand post pandemic, even if the price remained higher than their previous choice.

Chart: Profit margin increase during pandemic vs Profit Margin Increase post pandemic. Meat substitute has 13% increase during, 19% after. Peanut butter has 0% during, 11% after. Alcohol has 13% during, 10% after. Ice cream has 0% during, 8% after. Frozen foods have 6% during, 0% after.

The Takeaway

By conveying an authentic message regarding the public wellbeing brands can create additional value for their products. In the case of my research, four out of five product categories saw in increase in post-pandemic value. By focusing on building public goodwill, brands can not only increase their profit margins during the pandemic, but after the crises has ended as ended as well.

Branding Goodwill: Building and Retaining Brand Value in a Covid-19 World