Presented by: Mary-Kay Harrity 05.06.11

Presented by:Mary-Kay Harrity 05.06.11

The Yankelovich MONITOR Paints a broad outline of the marketplace Identifies “universal” demands and unmet marketplace needs that apply to brand-specific issues

Ages 16+ Nationally projectable Methodology • Fielding 1: Macro trend analysis • 3,998 respondents • Fieldings 2-4: Tracking key measures and deep dives into Finances & Spending, Multicultural, Health & Wellness and Sustainability • 2,500 respondents each

Conventional Wisdom Upended Divergence and Consensus In Search of Fairness The Future WillBe Social

Conventional wisdom upended Economic hardship is only one catalyst at work; many rules seem designed for a different era

Conventional wisdom upended Children not required 41percent of Americans say having children is very important for a successful marriage, compared to 65percent in 1990 (Pew Research Center, 2007)

Conventional wisdom upended • (Among 30-44) Share of husbands whose wives’ income tops theirs • (Among 30-44) Among married women, which spouse has more education? Notes: Includes only native-born 30-44 year-olds. Source: Pew Center and Decennial Censuses and 2007 American Community Survey (ACS) Integrated Public Use Micro Samples (IPUMS)

Conventional wisdom upended Working dads feeling work-life conflict more than working moms Percentage reporting work-life conflict Among dual-earner families with child(ren) under 18 Source: Families and Work Institute, National Study of the Changing Workforce, 2008

Conventional wisdom upended • Stay-at-home dads Fathers with working spouses whostay home to care for family: 2002: 105,000 2006: 159,000 (Census) “But that's only part of the picture, says Aaron Rochlen, an associate professor at the University of Texas at Austin. Rochlen, who studies gender roles and psychology, says many dads with working wives try to work part time or consider themselves ‘consultants.’ But many are, in fact, the primary caregivers to their children. By that expanded definition, he says, there are about 2 million at-home dads. That number has also likely risen during the recession because about 70 percent of the lost jobs affected men.” (“Stay-At-Home Dads Grapple With Going Back To Work,” NPR, 03.24.10)

Conventional wisdom upended • Structural unemployment now our problem “In the United States, unemployment has typically been a relatively brief affair. The vast majority of people who lost jobs soon found new work…the latest figures indicate that 46 percent of Americans classified as unemployed – meaning they are out of work and seeking a job – have been unemployed for at least six months. That is nearly twice the previous post-World War II high, set in 1983.” (“When Being Out of Work Becomes a Chronic Condition,” The New York Times, 07.16.10)

Conventional wisdom upended • Challenging the ROI of college “Of the top 30 jobs projected to grow at the fastest rate over the next decade, only 7 typically require a bachelor’s degree according to the BLS…among the top 10 growing categories, two require college degrees: accounting (a bachelor’s) and postsecondary teachers (a doctorate). But this growth is expected to be dwarfed by the need for registered nurses, home health aides, customer service representatives, and store clerks.” (“What’s the Key to Success in the United States?”, The New York Times, 05.14.10)

Conventional wisdom upended • This is not your father’s recession “Consumers are returning to the marketplace in ways that defy simplistic conventional wisdom…Prioritization has replaced accumulation as consumer’s primary shopping style…consumers do not have the financial wherewithal they used to have, but they have not given up their aspirations to the good life…most of their expenditures are fixed, so there is no financial adjustment that can free up significant additional funds…prioritization is the only financial strategy that can simultaneously enable consumers to spend to stay afloat.” (“First Things First,” The Futures Company Finance and Spending View, 05.27.10)

Conventional wisdom upended Not frugality or indulgence – but both “ Americans are broke – and depressed – and also swilling $3 lattes and waiting in line for iPhones. Welcome to the schizophrenic economy (“The New Abnormal,” Business Week. 07.29.10) 68% “ Today Agree: “Sometimes I just need to treat myself to something nice/fun even if I have to tighten up my budget in other places” • (Yankelovich MONITOR 2010 Finances & Spending Lens)

Conventional wisdom upended • Store brands lead; national brands follow? 54 percent of consumers say “I prefer name brands,” compared to 46 percent who say “I prefer store brands” (Yankelovich MONITOR 2010 Finances & Spending Lens)

Thinking ahead • Expect to have to update assumptions about ‘the household’ and ‘the family’ on an ongoing basis • Stay alert to clients’ competition coming from outside – as well as inside – of category as consumers prioritize spending • Meaningful innovation is a key route to getting onto the ‘priority list’ today • Expect consumers to spend on favored ‘indulgences’ – but carefully within budget • Expect clients’ brands to need extra efforts to ‘woo back’ defectors to private label, even as the economy improves

Divergence and consensus In a divergent marketplace, it’s too easy to lose sight of the views people share

A matter of diversity A matter of splintering Divergence and consensus Divergence Consensus • Not about unanimity • A subjective approach to identifying the commonalities that create shared experiences

Divergence and consensus Divergence: A diverse population Household Diversity Non-traditional households have overtaken “married with children”* Religious Diversity “The US is on the verge of becoming a minority Protestant country”** Gender Identity Lesbian, Gay, bisexual or transgender individuals estimated at 6.6% 18+*** Racial Diversity 5.3MM people reported to be of at least two races**** * Source: U.S. Census Bureau, Current Population Survey, 2008 Annual Social and Economic Supplement, Internet Release January 2009 ** Source: AFP reporting on the Pew Forum on Religion and Public Life. Study, 02.25,08 *** Source: The U.S. Gay and Lesbian Market, 2008, Packaged Facts and Witeck-Combs Communications **** Source: U.S. Census Bureau, Population Division, Annual Estimates of the Resident Population by Sex, Race, and Hispanic Origin for the United States: April 1, 2000 to July 1, 2009 (NC-EST2009-03). Release Date June, 2010

Divergence and consensus Divergence: A splintered marketplace Political Ideology Broadband Divide According to the FCC, between 14 and 24 million Americans still lack access to broadband The “Creative Class” A new social class of knowledge workers, intellectuals, and artists driving growth by creating new ideas, new technology, new creative content Media Cocoons “People surround themselves with what they like, so they only read the news they like” (zeropointinformation.com) The Employed and The Unemployed A two-track economy

Divergence and consensus Consensus: The future will look different 68% 63% 66% 65% Today Today 2009 2009 Agree “The recession will change our nation forever” Agree “I’ll never spend my money as freely as before the recession”

Divergence and consensus Consensus: Not expecting to ‘settle’ Quality is no less important to me today than it has been in the past • 76% Today (Yankelovich MONITOR – Finances & Spending Lens 2010)

Divergence and consensus Consensus: Time for a world view 75% 66% Today Today Agree “I appreciate the influence other cultures are having on the American way of life” Agree “In order to be successful in today’s world, young people must have an awareness of cultures outside the US”

Divergence and consensus • Consensus: Control’s the goal, but it’s still elusive 66% 70% 71% Today Today Today Agree “No matter how hard I try, I never seem to have enough time to do all the things I need to do” Say being in control of your life is a sign of success and accomplishment Say managing stress is important to them in their personal life today 8-10 on a 10pt. scale where 10 is definitely a sign of success, accomplishment and 0 is definitely not a sign of success, accomplishment 6-7 on a 7pt. scale where 7 is extremely important and 1 is not at all important

Divergence and consensus Consensus: Health is high on consumers’ radar 84% 62% Today Today Agree “I’m trying to take better care of my health today than just a few years ago”(2010 US MONITOR Health & Wellness Lens) Agree “Everyone pays the price when an individual leads an unhealthy lifestyle”(2010 US MONITOR Health & Wellness Lens)

Divergence and consensus Consensus: But getting healthy remains a challenge 68% 70% 71% Today Today Today Agree “There are more health risks in society today than ever before” (2010 Global Monitor, US sample) Agree “There is so much information about nutrition these days that it is confusing to know what you should and should not eat” Agree “I wish grocery stores would make it easier to determine what foods are healthier than others”(2010 US MONITOR Health & Wellness Lens)

Divergence and consensus • Consensus: Essentials – old and new 63% 65% 71% Today Today Today Say finding enough time for family and friends is important to them in their personal life today Agree “I could notget by without the Internet” (Yankelovich MONITOR 2010 Finances & Spending Lens) Behaviors you do regularly: Stay mentally active by challenging yourself with puzzles, books, hobbies or interesting work 6-7 on a 7pt. scale where 7 is extremely important and 1 is not at all important

Thinking ahead • Anticipate continuing pressure from consumers’ determined to get what suits them best as an individual • …and help clients plan for more subgroups looking for recognition in the marketplace • Expect consumers to continue to value control • …and value information and resources that help them move ‘seamlessly’ through the demands of everyday life • Expect consumers to look for and appreciate health guidance/information that is easily understandable and easily useable • Explore new options for helping clients leverage consumers’ attraction to a ‘global experience’

Economy in free fall; Wall Street melts down Consumer confidence plummets to all time low 10.28.08 Foreclosure frenzy Rising cost of food, gas, energy Health benefits in jeopardy In search of fairness 2008, 2009

Economy in free fall; Wall Street melts down Consumer confidence plummets to all time low 10.28.08 Foreclosure frenzy Rising cost of food, gas, energy Health benefits in jeopardy In search of fairness 2008, 2009 The reality… Consumers believed… Responsibility • That most institutions were taken by surprise • That most institutions had their best interests at heart • That the pain was shared

Anxiety, hope, patience Bailing out the biggies in good faith Owning our problems Minimizing risk, considering consequences Embracing self-reliance Living within means, not above… or below Brightsiding Rebuilding outward slowly In search of fairness 2008, 2009 Responsibility

In search of fairness Self-reliance efforts and rewards resonate more 70% 64% Today 2009 Better increase your chance of succeeding in today’s world by: “Becoming as self-reliant as possible”(over “seeking the help and guidance of professionals”) (2010 Global Monitor, US Sample)

In search of fairness Adjusting to new financial realities continues 67% 46% 56% Today Today 2009 Relate more to “saving for the future”than to “spending on something I want or need today” Using your credit card less and instead using other methods of payments like cash or a debit card

In search of fairness Getting help in adjusting to new financial realities “Coming soon: credit and debit cards that cut you off when you disregard your own monthly budget. The service, called inControland already in use by some Barclaycard holders in Britain, is a sort of financial chastity belt that offers the potential to prevent a variety of budget sins and other money traps. Worried about your restaurant habit? If your bank adopts MasterCard’s service, you could tell it to have your debit or credit card reject any restaurant purchase above whatever monthly cap you set … When introduction begins in a few months, it will include only alerts for credit card customers; letting people set their own spending limits will presumably come later … Changing behavior, in the end, is the biggest challenge … MasterCard seems to have made it possible for your bank to become a partner in your self-improvement instead of an enabler of your misdeeds.” (“Your Card Has Been Declined, Juts as You Wanted,” The New York Times, 08.14.10)

A still-slow economy …and stubborn unemployment Breaches of faith all around – from CEO’s to Congress, from Hollywood to the hardwood Too many corporate abuses Frustration with lack of progress Our assumptions were wrong In search of fairness Today

A still-slow economy …and stubborn unemployment Breaches of faith all around – from CEO’s to Congress, from Hollywood to the hardwood Too many corporate abuses Frustration with lack of progress Our assumptions were wrong In search of fairness Today The reality… Consumers wonder… Stunned and outraged by the audacity of betrayal... • Was I conned? • Where are all the consequences for others? • Were lessons learned or is it back to business-as-usual? • Does anyone know what they are doing? • Where is the end to my crisis fatigue? …in search of fairness

A way of acting or treating others Treating like cases alike If there is a hierarchy… Levels need to be overt; criteria need to be public Same criteria for everyone at that level No favoritism In search of fairness What do we mean by fairness?

In search of fairness “Even kids know it’s wrong to treat new friends better than old friends. At Ally Bank, we treat all our customers fairly. With no teaser rates, and no minimum deposits. It’s just the right thing to do.” (Ally Bank TV commercial)

Skepticism advancing Brightsiding challenged Emotional and material privation A new focus on self Burrowing deeper into safer networks Questioning social responsibility efforts In search of fairness Trends driving fairness

Skepticism advancing Brightsiding challenged Emotional and material privation A new focus on self Burrowing deeper into safer networks Social responsibility 2.0 In search of fairness Agree “Business is too concerned with profits and not enough with public responsibility” 70% 79% 67% 64% 65% 84% Today Today Today 2006 2009 2009 Agree “If the opportunity arises, most businesses will take advantage of the public if they feel they are not likely to be found out” Agree “Businesses care more about selling me products and services that already exist rather than coming up with something that really fits my lifestyle”

Skepticism advancing Brightsiding challenged Emotional and material privation A new focus on self Burrowing deeper into safer networks Social responsibility 2.0 In search of fairness 35% Today 63% 28% Agree “I am increasingly skeptical of the claims made by brands on packaging and advertisements” Agree “I don’t believe the claims made by environmentally friendly products” Today 2009 (2010 Global Monitor, US sample) (2010 Global Monitor, US sample)

Skepticism advancing Brightsiding challenged Emotional and material privation A new focus on self Burrowing deeper into safer networks Social responsibility 2.0 In search of fairness 43% Today 53% 52% Agree “If Americans turn out to be less well off in the future than they have been in the past, they may actually be happier because of it” 2009 2008

Skepticism advancing Brightsiding challenged Emotional and material privation A new focus on self Burrowing deeper into safer networks Social responsibility 2.0 In search of fairness 41% 50% Today Today 34% 54% 38% 58% 44% • Agree “I’ve got all the material things I need”(2010 Global Monitor, US sample) Agree “When I buy any product, its style and design is as important to me as its performance” (2010 Global Monitor, US sample) 2009 2009 2008 Today 2008 Of those working ft/pt agree “the recession has made my job/career less rewarding” (Yankelovich MONITOR 2010 Finances & Spending Lens)

Skepticism advancing Brightsiding challenged Emotional and material privation A new focus on self Burrowing deeper into safer networks Social responsibility 2.0 In search of fairness • Slowly building outward calls on ME to ensure the foundation is OK • Lack of fairness triggers self-defense instincts… • And gets competitive juices flowing

Skepticism advancing Brightsiding challenged Emotional and material privation A new focus on self Burrowing deeper into safer networks Social responsibility 2.0 In search of fairness 67% 61% Today 2009 Agree “I work hard at coming out on top in every situation — from the least important to the most important” 50% 49% 56% 55% 53% 53% 2009 2008 2009 2008 2008 2007 47% 47% Today Today Agree “There is a sense of community where I live” Agree “We should do what is good for the planet even if it harms the U.S. economy” (2010 Global Monitor, US sample)

Skepticism advancing Brightsiding challenged Emotional and material privation A new focus on self Burrowing deeper into safer networks Social responsibility 2.0 In search of fairness • More intense scrutiny of all connections: My personal relationships; my community; my brands; my networks • The word of the year? “Unfriend”

Skepticism advancing Brightsiding challenged Emotional and material privation A new focus on self Burrowing deeper into safer networks Social responsibility 2.0 In search of fairness 43% 59% 45% 53% 2009 Today 2008 2009 51% (Among those using social networking sites at least weekly) Agree “I am concerned that the information I put on social networking sites will be misused by others” Today • Agree “I am enthusiastic about new technology that can enable me to find and interact with like-minded people”(2010 Global Monitor, US sample) (2010 Global Monitor, US sample)

Skepticism advancing Brightsiding challenged Emotional and material privation A new focus on self Burrowing deeper into safer networks Social responsibility 2.0 In search of fairness • Belief in the power to make a difference through the marketplace continues • But consumers feeling distanced from social responsibility efforts • A cluttered and crowded arena; less a competitive advantage, more a price of entry • A matter of relevance: Your cause may not be my cause • A more sophisticated perspective

Presented by: Mary-Kay Harrity 05.06.11