Magazine article Marketing

Conference Preview: Crunch Time

Magazine article Marketing

Conference Preview: Crunch Time

Article excerpt

As consumers find their budgets squeezed, brands must give them a reason to buy.

The ongoing impact of the economic downturn is the stuff of nightmares for many people, but for marketers, it is an opportunity to differentiate their brands from the competition.

Promotion and pricing strategies are key to maintaining consumer spending in a recession, but jumping on a price-cutting bandwagon can lead to severe financial loss. Experts claim a better approach is to focus on building brand loyalty and trust in an otherwise volatile environment.

Package design is also likely to play an important role, especially in supermarkets, where shoppers are scouring the aisles for value. Half the battle is won if consumers see something new.

Andrew Knowles, chief executive at JKR and a speaker at the upcoming conference on marketing during the credit crunch, says brands can maintain value by being unique. He emphasises the link between higher price and perceived uniqueness, saying that a brand can charge a premium price if they offer something consumers believe to be truly different.

However, during the credit crunch brands have to work harder to justify that premium price, argues Knowles. 'Brands have to maximise the reward of buying their brand and minimise penalties like time and price,' he says.

'In a crowded supermarket, brands have to provide a short-cut decision which is largely habitual. Unique brands will sidestep the price penalty and reinforce the rewards of their brand. Design can create a desire on an emotional level that is immune to competitive response.'

As consumers begin to scrutinise the uniqueness a brand offers, so flimsy strategies will disintegrate.

'In terms of luxury products, people will start checking what exactly it is that makes something luxurious. In the cosmetics industry, for example, a lot of the price goes on the packaging of the product. As a result the ingredients aren't as good,' says Sarah McCartney, head of brand publications at cosmetics company Lush.

The banking industry crisis is an indicator that the downturn is here to stay, but it is impossible to know how long it will last. Brands must address price costs now to offer long-term value.

The unique angle

No customer wants to feel as if they are buying cheap, but at the same time they will be closely watching their expenditure. 'Brands that will do well are those that haven't been taking advantage in the past. …

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