Five reasons Spain is fighting recession: a view from McDonald's marketing chief
As part of Marketing's Window on the World series, Alexandre Simon, McDonald's Spain vice president marketing, communication & business units, explains why Spain's unique culture has saved it from erupting during the recent economic crisis.
If we look back to 2006, just before the crisis began, Spain was a model for success in Europe and the world thanks to its GDP growth of about 4%, a record low 8% unemployment rate, booming tourism and construction industries, leading financial institutions shelling out loans to citizens and businesses, and so on.
In short, it was the place to be, a country that had proved to its European neighbours that the relatively recent era of the dictatorship was firmly in the past.
Spain was a country where you could get rich quickly as the value of your apartment doubled every five years. However, the dream was too good to be true
During that period, it was impressive to see Spain's achievements and development in a number of areas: amazing infrastructure, including giant airports and hospitals, a road network that was at the forefront of Europe, shopping centres befitting the other side of the Atlantic, and housing developments with the very latest technology and all the mod cons for the entire family (swimming pool, tennis courts, 24-hour security etc), as well as an exceptional climate.
Spain really had become paradise on Earth. It was a country where you could get rich quickly since the value of your apartment would double every five years. However, the dream was too good to be true.
Now we all know that Spain is one of the European countries worst hit by the crisis, and the age of plenty seems far behind indeed. All this is because it grew too quickly and, in particular, it lived beyond its real needs, and much of its wealth was spurious.
So now we might ask ourselves: How is it possible that its citizens, its companies, have not succumbed to the situation? To answer this question, it is crucial to understand the country, its history, its culture and its mentality.
In my view, there are five key factors that explain how Spain has been so incredibly resilient if you compare it with the intensity of the crisis.
1. The first is the unique relationship Spaniards have with their loved-ones, their family and their friends.
Many people affected by the crisis have received the unconditional support of their family during the past few years, and by that I mean both emotional and financial support, considering that many young and not-so-young people have had to return home to their parents' house.
The community has played a pivotal role in helping needy people, by giving them odd jobs and sometimes nurturing the submerged economy
2. The second reason has to do with the role of the local community. During the crisis, the community has played a pivotal role in helping needy people, by giving them odd jobs and sometimes nurturing the submerged economy.
At the same time, people have realised how important it is to consume products produced in Spain and, where possible, locally. Ultimately, people trust what they see and what they know.
3. The third reason has to do with Spaniards' philosophy of life. If there is one thing that characterises Spaniards, it is the notion of Carpe Diem, enjoy and seize the present.
People have not been overcome with gloom and doom. They have faced every stage of the crisis with a glass-half-full approach. What we might sometimes have mistaken for fatalism was in fact optimism.
Even when the glass was practically empty, any positive event, like the successes of the national football team, helped raise morale and gave people a good excuse to continue to enjoy life.
4. Naturally, Spaniards have had to adapt to the crisis, since their purchasing power has slumped. They have done so by changing their habits, and this is the fourth factor that, in my view, has helped them to deal with the adverse economic backdrop.
Young people have resumed the botellones, bring-your-own outdoor social drinking sessions, rather than going to bars. Spaniards continue to go out and to consume
To continue to enjoy what they like best, each consumer has found their own way to spend money differently: young people, for example, have resumed the botellones (bring-your-own outdoor social drinking sessions), rather than going to bars. Families, meanwhile, have increasingly been organising picnics in parks, or taking home-made pop-corn to the cinema, or directly downloading films to watch at home.
Those people who have been lucky enough to keep their jobs take their lunch to work in Tupperware dishes. There are countless examples, but the most important thing is that Spaniards continue to go out and to consume, and that is why they do not feel the frustration that could be gripping other countries.
5. The fifth and last factor I would like to put forward is that Spaniards are a proud people who will do anything they can to maintain their social status. For example, one of the greatest incongruence of this crisis is that Spain is the leader in smartphone penetration in Europe and that low-cost car ranges have among the lowest market shares of any country in the region.
Ultimately, some product categories are still very important to Spaniards, and although these categories have suffered during the crisis, we know that when the market bounces back, Spain will be among the countries recording the fastest growth in Europe, although it will be important not to make the same mistakes again.
Unquestionably, there are many other reasons, ranging from religion to education, but I believe these are the five main ones.
Three brands getting it right in Spain
Certain brands have managed to adapt to these consumer trends. One good example is the multinational furniture giant IKEA. In the knowledge that many Spaniards were obliged to spend more time at home and, sometimes, to live with their parents again, the Swedish brand launched an innovative ad campaign under the slogan "Welcome to the Independent Republic of Your Home". It was an emotionally-charged campaign showing a connection with Spaniards and, in particular, that it was possible to enjoy the Spanish festive spirit inside the home.
Another example is Campofrío, a Spanish processed meats company which has become the brand that has best understood the Spanish spirit during the crisis. Their campaigns have made many Spaniards feel proud of their country. Under the slogan "Don't let anyone change the way we enjoy life", they have managed to strengthen the brand's image and empathy among Spaniards, and have produced some of the most moving advertising drives of the last decade.
To close, I would like to highlight the exceptional work of the supermarket chain Mercadona. This is a brand from Valencia operating in a fiercely competitive sector with major household names like Carrefour. Since the crisis began, Mercadona has positioned itself as a trustworthy supermarket, offering top-quality local products at the very best prices. In fact, it is the only major brand which, at the start of the crisis, decided to lower its prices in solidarity with consumers during these hard times. It has been pro-active and not reactive throughout the crisis.
These are three brands that have been able to evolve to adapt its products, services and marketing to customer’s changes but most important, three brands that have managed to connect with Spaniards emotionally and with optimism at a time of crisis, when everything tends to take on a more rational dimension.
I don't know how any other European country would have been able to tackle the unique crisis that Spain has faced, but perhaps reading this article will have helped you to understand why Spain is still on its feet, despite having an unemployment rate of 27% - and why foreigners visiting Spain do not perceive the crisis that is so often talked about in the media.
Ultimately, if there is one thing we can say about this country, as a 20th century ad campaign to promote Spanish tourism put it: "Spain is Different".
This article was first published on marketingmagazine.co.uk
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