Magazine article Marketing

Austerity Era Heralds Brand Strategy Rethink

Magazine article Marketing

Austerity Era Heralds Brand Strategy Rethink

Article excerpt

Chris Sanderson, director of strategy and insight at trend analysts The Future Laboratory, describes the current economy as being in a state of 'cataclysmic change'.

Recession is feeding into a broader transformation in consumption patterns. It is a change that began earlier this decade with an increased consumer focus on ethical and environmental concerns. 'Once we are through this recession, things will never go back to how they were,' warns Sanderson.

He also believes that consumers will save more rather than reverting to credit. Surprisingly, 25- to 34-year-olds emerged as the age group saving most in the last quarter of 2008, according to state-owned savings bank NS&I. Its study showed that the household savings ratio (savings as a percentage of disposable income) nearly tripled to 4.8% between October and December from 1.7% in the previous quarter. Last week's one-third increase in the tax-free limit on ISA savings, to pounds 10,200, may further promote saving.

Shifting influences

While caution is likely to lead those consumers who have lost out since the banking crisis took hold to save rather than spend, other key factors will also be in play.

Some experts predict that traditional advertising will begin to play a smaller role in influencing choices, as the influence of families, friends and social networks on purchasing habits grows. Online research, meanwhile, will take on a wider role in decision-making.

Most observers believe that retailers' recent focus on price cuts is unsustainable, and that there will eventually be a return to promoting quality and the emotional benefits of brands.

'The big issue brands must face is how they justify their price premiums,' says Mark Wickens, chairman of branding agency Brandhouse 'People on tight budgets still care what buying a brand says about them - they want to feel good about their purchases,' he adds. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.