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TheStreet Open House

10 Bulletproof Brands in a Bad Economy

Stock quotes in this article: AAPL, KO, AMZN, MCD, TIF, BUD, T, KFT, TM, LUV

BOSTON ( MainStreet) -- No matter how bad the economy was, is or will be, there are many companies that are likely to treat troubles as no more than a speed bump.

Simply put: No matter how bad the European debt crisis gets, many will still be munching on Big Macs and washing them down with a glass of Coke while checking email on an iPhone.

Barbara Sullivan, founder and managing partner of Sullivan NYC, a brand engagement firm that has worked with big name brands such as American Express (AXP), Bank of America (BAC) Charles Schwab (SCHW) and Chase (JPM), doesn't like to use the term "recession-proof" when addressing the durability of a brand.

"That's an unrealistic expectation, because nothing is really recession-proof," she says. "I think volume will go down across pretty much any brand because people are not spending as much money. I think the goal for companies is to keep their customers loyal -- to keep their relationship -- and not to worry as much about their sales volume."

"The biggest risk is for marketers to compromise their long-term brand equity by making knee-jerk changes or reactions to an economy," she adds. "There are other things you can do to tweak the marketing, but I think making wholesale changes and compromising brand equity just to boost short-term sales would be a very costly proposition over the long term."

Reinforcing long-term "value" and "trust" are more important than seat-of-your-pants strategies, she says.

Among the ill-advised moves Sullivan sees happening on a frequent basis are "drastic" price cuts "where they will just try to sell at any cost." Doing so, she says, focuses consumers squarely on price point rather than brand attributes.

"Price is not a very sustainable advantage and it doesn't really build brand equity if it is not part of the brand's core offering," she says.

As an added problem, once buyers get accustomed to the lower cost, it is hard to ever readjust them back to a higher price point.

Cost adjustments aren't just limited to the sticker price. Some brands will maintain their suggested retail price but cut back on quantity or extras. A cereal maker, for example, might charge the same for a box that contains fewer servings. An automaker may eliminate features.

Nevertheless, the lower-price brands in any category -- if they have traditionally been considered as such -- will be in a better position amid tough economic times.

"They do better in recessions, even if it seems to be a discretionary product, because it is easy for people to feel rewarded without spending a lot of absolute dollars," Sullivan says. "During the Great Depression, lipstick sales went through the roof because it was the one luxury women felt they could still afford to buy. There are other examples of low-priced items that might seem discretionary -- like Starbucks (SBUX) or McDonald's (MCD) -- where the actual cash outlay isn't that great."

The following are 10 companies that have managed to deal effectively with the economic slowdown -- and decrease in consumer spending -- by building a bulletproof brand.

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