Israel's major advertisers have been walking on eggshells this past year, after cost-of-living protests rocked the land in the summer of 2011.
The protests, which focused on issues as specific as the price of cottage cheese and as general as the cost of housing, gave the impression that something fundamental had occurred that had compromised the consumer's connection with specific brands.
This sense was backed up by research data published in October of last year in the annual brand image survey conducted by TheMarker Magazine in cooperation with the Market Watch market research firm. The number of consumers who were willing to recommend specific brands plunged in almost every category. Israeli consumers were clearly declaring their dissatisfaction and even anger at various retail brands.
Since then, there has been a sea change. This year's recently released new brand survey shows most brands have recovered their standing with the public, returning to and sometimes even exceedig their 2010 levels.
This is the sixth year in a row TheMarker has conducted the survey, which is based on a survey approach known as net promoter score, or NPS, which measures the rate at which a consumer is willing to recommend a product or service. The score – a widely accepted measure of a brand's image in the market research field – also seeks to predict which brands and services are likely to grow in the coming years, on the assumption that in an era in which trust in advertising is on the decline, recommendations from friends take on added importance.
A love-hate relationship
The most successful brands in Israel, according to the new survey, are Honda at No. 1, followed by the Belgian beer Leffe, Mueller yogurt, Yotvata milk and Tuborg beer.
At the bottom of the list are Orange cellular (Partner Communications' local brand ), Cellcom cellular, the Psagot Investment House, Migdal Capital Markets, and, at the very bottom, Excellence Investments.
The survey data also contained findings on the brands with the greatest potential for growth or collapse, based upon the rise or fall in a product's net promoter score.
The most promising brands were found to be Yaynot Bitan, the discount supermarket chain, followed by Maccabi beer, Harel Finance, Arcaffe cafes, Ikea furniture, the Tapuz website and AIG insurance.
Those with the greatest potential for collapse, as indicated by a decline in net promoter score were, Israir airlines, Fanta soft drinks, Tapuchips potato chips, Migdal Capital markets, and, at the bottom of the list, Excellence Investments.
During the summer of 2011, Israeli consumers discovered they did not need to settle for a passive role in the relationship with corporate brands. They discovered they could not only be the targets of advertising messages but also help set the rules of the game.
Based on the new data, however, it appears that the consumer activism of 2011 was an anomaly. Supermarket prices, for example, are on the increase and consumer protests may still surface on Facebook, but they aren't translating into demonstrations in the streets.
There have been other developments too. The Communications Ministry's policy encouraging greater competition in the cellular service industry has driven down prices dramatically this year after the entry of two major new cellular firms into the market in May: Golan Telecom and HOT Mobile. Other smaller new players include YouPhone, which this month undercut Golan and HOT's unlimited pricing plans.
Following the launch of Golan and HOT Mobile, there were a number of media reports about service problems customers at the new firms were experiencing. Nonetheless, by the middle of last month, they had collectively signed up about half a million customers.
Although the three major longstanding cellular firms in Israel, Cellcom, Pelephone and Orange, dropped their prices in an effort to stem the exodus, this year's Market Watch data shows that HOT and Golan's net promoter scores are higher than those of the veteran firms. Pelephone, however, showed itself to be better prepared to meet the competition, in part by lowering its price, and has suffered fewer defections.
When it comes to the potential for growth based on net promoter scores in the banking sector, Mizrahi Tefahot is the standout, bested only by Bank Yahav, which used to serve only government employees but is now controlled by Mizrahi Tefahot as well. Mizrahi's advertising message, which has highlighted the ease with which customers can move their accounts over to the bank, appear to be bearing fruit.
Among the country's two largest banks, Leumi scored higher than Bank Hapoalim.
Branded for life?
The overall findings don't indicate the demise of brand identity in Israel or elsewhere. Even a casual glance at Facebook posts gives an indication of the continued identification with brands. People comment on brands of clothing that they have bought and tell their friends which cafe they are sitting at or what they are eating or drinking at lunch.
Brands remain an integral part of our lives, but now the talk is being directed not only by the manufacturer but also by the consumer. And brand recommendations from friends are a major factor in marketing.
"In 2011, at the height of the protests and also a little after that, the marketers contacted us and wanted to look into whether this was a passing wave or an earthquake," said Maurice Kahoonay, Market Watch's vice president of research and development.
"Then and now, too, we continue to say that the basic relationship between the consumer and the brands has changed. People expect dialogue and mutuality. Many companies have taken the protests seriously and managed to foster a new discourse with the consumers," Kahoonay said.
Advertisers are less arrogant now, Kahoonay said, and grandiose advertising campaigns have been replaced with lower-key, simpler messages.
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