Be offensive not defensive.
20th April 2011
50 percent of those surveyed have a great sense of uncertainty and negativity towards the country's economic outlook. This amount of negativity will challenge businesses to think carefully about how they develop and invest in their brands, to ensure that they can retain, and capture, a significant proportion of market share.
Do these results mean that consumers will shop around and look to buy cheaper products/services or those on special offer? Will big brands get trampled in the rush to shop at discounted stores or at the discount aisle?
More than half (56% of our sample) say they are unlikely to change their shopping habits, with six percent believing that they will buy more of the brands they know and trust. However, a third (36%) claim that they will shop around more over the next six months. So what factors are driving consumer choice?
Our results indicate it's not price alone - with only 24 percent citing this as a reason for brand choice. On the other hand, 63 percent claiming that they will buy brands that offer the best value, 59 percent buying brands they trust, and 47 percent going on brand recognition. However, what's clear from the results is that people still like a bargain, with 43 percent going for brands that are on offer.
So how should businesses respond to these findings?
In American football terms, if you're not on offense you're on defence, and while businesses might be tempted to go on the defence and just hope to ride out these tricky times, consider this...
The Profit Impact of Marketing Strategy Database (PIMS) has been tracking the business performance of over 3000 business units for more than 40 years and has been described by Tom Peters as: "the most extensive strategic information database in the world". It allows businesses to identify those critical strategic factors that enable an organisation to achieve an improved sustainable position. This key source of business intelligence has identified that those brands that went on the offensive, and continued to invest in marketing, emerged into the recovery phase with higher return on capital and improved market share.
When money is tight customers want to be sure they are making the right choice. They don't want to waste money buying something that is not what they wanted, so they will increasingly buy brands they know and trust. This is not the time to cut, but the time to maintain investment in brands and continue to develop and to deliver a trusted, relevant and distinctive brand positioning.
There are consumers out there buying almost exclusively on price alone, but these are the minority and are least likely to be brand loyal. So why chase this market?
Businesses now need to focus on brand loyalists and on trying to grow their share of wallet or purse. Value remains a critical factor and it's important to find ways to add value for brand loyalists without sacrificing brand position. Successful brands must be seen to offer better value than the competition - focus on telling customers why the brand is worth the price by emphasising the added value and functional advantages that it offers.
So, no matter how many consumers are feeling less confident about the future, they will be looking to buy brands which are recognised, trusted and which will continue to offer sustainable value propositions.
About the Survey:
- The Cogent Elliott Economic Survey was undertaken in March 2011 in conjunction with OnePoll.
- 1073 nationally representative sample were surveyed online.
- The economic confidence score is calculated by subtracting those who responded they were feeling negative from those who responded by feeling positive.