Think Hard in the News. Two days running.

Well.  Two days in a row I featured in stories in The Scotsman.  How odd.

Yesterday it was a story about branding…

Sweet tooth helps fight the recession

Published Date: 09 June 2009
By Erikka Askeland

WHEN the going gets tough, the tough are reaching for cakes and fizzy drinks to make themselves feel a bit better.

In recession-hit Scotland, consumers are splashing out on sweet favourites, and sales of familiar brands such as Irn Bru and Tunnocks tea cakes and caramel wafers are on the rise.

There are plenty of signs the shopper is cutting back on big-ticke

with Investec, one of the reasons for Barr’s strong performance was the cosy familiarity of the Irn Bru brand,

“There seems to be a resurgence of people going back to brands they trust,” says Mallard.

Mark Gorman, head of thinking at Think Hard believes that Irn Bru is a “fabric brand”, which has survived the test of time and is “fixed in the commercial psyche”.

These are not the cheapest in the shops but to consumers they signal reliability. Scottish brands which he believes make the grade include Irn Bru, Mothers Pride bread, Tennent’s lager, Lees’ macaroons , and of course, Tunnocks.

“Although people will cut back and look for cheap brands, you do tend to find in a recession they are still willing to pay more for branded goods in certain staple ranges,” Gorman says.

Can a fizzy drink really be considered a staple food? In Scotland, he says, it is.

“They are the important things in life, because they do trust those brands. You wouldn’t want to drink own-brand Irn Bru, would you?”

Fergus Loudon, the sales manager for teacake makers Tunnocks, says the group has come back from a slower-than-normal start to the year and its factory in Uddingston is “back to seven days a week”.

He adds that it is the trust people have in the brand as well as the need for a little sugary comfort that drives sales.

Loudon says: “To a degree, it is confidence in the older brands. The likes of ourselves, Barrs, Baxters, Walkers – they are all iconic Scottish companies and they have been around for a long time. I think the consumer can relate to that and they have confidence in the stronger brands.

“They think: ‘Ah, that is good – I haven’t had one of those for a while.’ It is comfort eating. In times of hardship, people will always treat themselves to a treat, whether it is a caramel wafer or a can of Irn Bru.”

However, Roger White, chief executive of AG Barr, takes a different view. He dismisses the “comfort factor” although he agreed people reach for the brands they know when they are feeling shaky.

“It is not about comfort eating or drinking, but people stick to what they know when they are lacking in confidence and they stick to things which are relatively affordable.

“Our brands are just known or affordable. It is easier to turn down things you are less certain of if you lack confidence. You tend to stick with something you know,” White maintains.

Mark Bradford, managing director of James Allan Bakeries, a traditional seller of pies and cakes in the West of Scotland, is surprised by the growth in demand for treats – as long as they are cheap.

Bradford says that sales of savoury pies have enjoyed a resurgence but it is the cream cakes that have sold particularly well.

“Good sellers at the moment are cream cakes, which until recently were not that popular. But they have grown in popularity. You could call them a comfort food, I think people are treating themselves to low-cost treats, which our types of products are.”

In addition to selling sugary sweet nothings, AG Barr also enjoys the benefits of having a strong core market – loyal Scottish consumers.

Gorman believes that loyalty in the home market is a key benefit to companies such as AG Barr which has expanded in the UK and more recently, into Russia.

“It gives backbone to your balance sheet if you know that come what may, you are still going to hold brand leadership in your original territory. That gives you some confidence to build from there. Irn Bru have done that brilliantly in the last 20 years,” said Gorman.

And today it’s a Story about Ellis Watson’s move to First Group…

Watson swaps Menzies post for key role at FirstGroup

It is understood Watson is being groomed as a possible successor to FirstGroup’s founder and chief executive, Sir Moir Lockhead, 64, who is expected to retire within the next couple of years.

Last month The Scotsman reported on the gap in the First- Group’s succession plan following the departure of chief operating officer Dean Finch.

But the appointment of Watson, who has turned Menzies around in his four years at the company, will increase speculation that he is in line to succeed Lockhead. Reinforcing Watson’s high standing, Menzies yesterday made it clear how highly they regard the former Mirror Group executive.

John Geddes, group comp any secretary for Menzies, said he was “sad to see Ellis go”.

Geddes refused to comment on Watson’s role at FirstGroup, which has been in and out of the blue chip FTSE 100 index of top British companies.

But he added: “Ellis is going to join a company which is pretty much FTSE 100. Ellis is an ambitious guy and I am sure he has got a plan.”

William Thomson, chairman of Menzies, gave an unusually effusive tribute to Watson in the company’s statement to the Stock Exchange, crediting him with having “revolutionised” Menzies’ distribution business.

Thomson also welcomed Watson’s replacement, David McIntosh, who has been with Menzies for 19 years.

Watson joined Menzies four years ago from Trinity Mirror where he was managing director, national newspapers, under chief executive Sly Bailey.

A close friend of former Sun editor Kelvin McKenzie, Watson was also involved in firing Mirror editor Piers Morgan after the Iraq prisoner photo hoax. He was best man at Morgan’s wedding weeks later.

Lockhead said Watson, who will take up the position in August, would be of “great benefit” to the group’s plans for future growth. Paul Moore, First- Group’s communications director, yesterday played down speculation that the company’s plans to eventually replace Lockhead.

“I think it looks like another great member of the senior management team,” said Moore.

But Moore said FirstGroup was “excited” about how Watson would promote the FirstGroup brand in addition to his management of the group’s operations.

Watson said in a statement last night: “I’m as flattered as I am excited to be joining FirstGroup. It’s an enormous and successful company and I’m pleased to be joining a team that seem intent on making it even more so”.

FirstGroup is one of the world’s largest public transport companies, operating trains and buses in the UK, US and Europe.

Trading in FirstGroup shares was up slightly to 382.25p while shares in Menzies were up even further – 2.7 per cent – to 133p.

‘Ellis is empathetic … and funny’

MARKETING “guru” Mark Gorman last night predicted that new FirstGroup director Ellis Watson can make the bus and train business “sexy”.

Gorman, the “head of thinking” at marketing consultancy Think Hard, praised FirstGroup chief Sir Moir Lockhead, as “brilliant”. But he insisted Watson would bring something different to the Aberdeen-based business.

Gorman told The Scotsman that people “love” Watson and like working for him.

He explained: “First Group are a great group. They are fantastically acquisitive, creative and dynamic. They export well. They have done really well in the States. They are one of the companies Scotland should be most proud of. Moir has been a brilliant leader for the business.”

He continued: “Bringing someone like Ellis in is a really interesting move. He is empathetic. And funny, he is a great speaker. If anyone can make travel sexy it would be Ellis.”

Gorman, who is head of business development at STV, said that First with Watson on board could challenge the major UK transport groups including Richard Branson’s Virgin, Michael O’Leary’s Ryanair or British Airways.

He added: “The problem with First is they built their brand in quite a product-based way, in a functional way.

“For the size of the business, they have disproportionately under-invested in building the corporate brand.

“I don’t think it has a massive amount of brand equity, not like a British Airways Not even like Ryanair and Michael O’Leary.”

Gorman said there were “a lot of great people and individuals in the travel sector” including Branson and easyJet found Sir Stelios Haji-Ioannou.

He continued: “There’s four big brands that have got very high-profile brand leaders. First has done it much more under the radar.”

One thought on “Think Hard in the News. Two days running.

  1. Interesting! I remember as a kid in Dundee we would all try to find and taste non Barr’s Irn Bru. we would rate them on how bad they were. The rarer, more obscure and awful they were, the higher they scored. They were all called “Iron” bru I remember M&S did one for a while but the creme de la creme was Merri Mate (the plastic drink pod thing from Carnoustie) really shockingly bad!

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