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In this crunch time of uncertainty, falling house prices and credit shortages, consumers have been snapping their wallets shut and steeling themselves until green shoots and daylight reappear.
One of the problems facing brands in this difficult time is coping with the change in consumer attitudes from ‘it’s worth it’ to ‘I don’t need it’. When money is tight, consumers tend to look at the price tag before the brand name, making it harder, especially for high end brands, to make a convincing statement about the merit of paying more for the best.
In an economic downturn people reconsider their usual blind loyalties to their favourite brands. You might like the idea of the cleanest dishes using a Quantum tab in your dishwasher, but do you really need four hard working detergents? Or could you make do with an alternative tab containing two or three?
Successful brands are about driving demand and having people choose a particular product or service because it’s relevant and meaningful and important to them. In a difficult economic climate those brands that have built their identity around the idea of value may be better off, but this isn’t going to work for many of the high-end brands.
Bosch for example, are a middle to high end brand in the home appliances market with a reputation and core brand identity built on reliability. Without offering bigger than usual discounts or ‘trading down’ for the consumer they are instead focusing on greener technology, sustainability and the benefits to all of us in energy, water and long term cost savings. This is a deliberate move to own the environmental territory in the marketplace with the hope that the benefits are convincing enough to persuade the consumer away from cheaper alternative purchases.
Successful brands therefore have to be smart, savvy brands, always keeping an eye on consumer trends. Ignoring the consumers’ purchase thought processes and their decision making can only lead to the eventual failure of the brand.
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