Several big brands will get new owners. The number of private equity deals will decrease in 2007, but the size of the deals will get bigger as many of the funds work together to purchase big-name brands. Expect at least one of the UK's major retail brands to fall prey in 2007 - maybe Sainsbury's, perhaps Boots. Convergence in the financial services sector will also ensure some big deals - Barclays, Lloyds TSB or Prudential could all be snapped up by US buyers. In the media world, it is almost guaranteed that we will see a raft of big mergers and acquisitions. BT and Vodafone, anyone?
Microsoft will continue to Apple itself, as Apple becomes more Microsoft-like. Last year saw Microsoft begin to change consumers' perception of it as a much-hated global brand. The company's sterling efforts to limit internet viruses, combined with the work of Bill and Melinda Gates' charitable foundation, have led many consumers to reconsider this megalith. Meanwhile, stock option errors, an almost monopolistic control of the MP3 market, plus some extremely arrogant corporate statements have begun to tarnish the Apple brand. Expect 2007 to be the year that the reversal of brand perceptions occurs between these two bitter rivals.
The media mix will get really mixed up this year as the internet finally emerges as the most important brand-building tool for the vast majority of companies. Google attracted more adspend than Channel 4 in 2006 and we can expect it to continue its growth in the year ahead. More surprisingly, 2007 promises to see direct marketing taking a hit for the first time in more than a decade as several big clients move their marketing investment elsewhere in reaction to ever-greater clutter and the negative associations the public have for the medium. Meanwhile, public relations will enjoy another great year thanks to the growing number of media channels, a continuing emphasis on reputation, and a more pressing need to manage brands and crises across blogs and other online media.
Trading up will remain the single most important and influential consumer trend in 2007. More consumers with less time, more money and a growing taste for luxury goods will provide further opportunities for the brands that can respond best to this longing. Aside from helping the most established luxury brands to another stellar year, we can also expect this trend to encourage more consumer brands to adopt luxury techniques including limited editions, guest designers and experiential marketing.
Everyone is going to be talking touchpoints as the year progresses. Most brand managers will develop a consumer experience journey, funnel or hierarchy and use it as the basis for their marketing plans.
Marketers will also finally turn their gaze away from China and begin to notice India as an equally important resource both for the production and consumption of their brands. Indians spend more than their Chinese counterparts, are much keener on the British, and eventually will have a bigger consumer population than China. Expect a few of the smarter companies to begin working on building their brands in India in 2007.
Finally, expect the existing status quo of the big global brands to shift, at least a little, in the year ahead. Coke will begin its gradual decline. Ford and General Motors will deteriorate further. Tesco will begin to slow its growth in the UK and no one will be more relieved than Terry Leahy and his team, who want to avoid any backlash based on its dominance in the UK as they build their efforts across the Atlantic. Meanwhile, Procter & Gamble and PepsiCo will remain the world's best-run brand owners.
30 SECONDS ON ... INDIA
- India had an estimated population of about 1.1bn last year, and has the second-highest population in the world after China.
- It has the third-biggest economy in terms of purchasing power and the second-fastest-growing large economy, with an average growth rate of more than 7% since 1994.
- The middle class forms 20%-25% of the total population, with estimated spending power of more than $300m. There is a super-rich class of 17m, which is expected to grow to 35m in five years.
- More than 40m people in India already have the same purchasing power as US consumers.
- Overall consumer spending has grown at 6% a year over the past 10 years.
- India is the seventh-biggest country by area, covering a total of 3,287,590km2; it is the world's biggest democracy.
- In 2002, 25% of the population lived below the poverty line.