In today's challenging economic climate, even the world's top brands are feeling the pinch as consumers become more selective with their purchases. Experts say that major companies need to adapt their brand strategies to meet the changing needs and expectations of buyers in order to stay competitive.
"Consumers today are needier than ever before," said John Davis, a marketing professor at Wharton Business School. "Unemployment remains high, wages are stagnant, and economic uncertainty has made people very careful about where they spend their money."
This thriftiness is reflected in shopping habits. A recent survey by McKinsey found that an increasing number of shoppers are turning to discount retailers, buying store brands instead of name brands, and looking for sales and promotions before making purchases.
"The days of carefree spending are over, at least for now," Davis said. "Even once-recession-proof brands are having to work harder to earn consumer dollars."
Some well-known companies are already employing top brand strategy firm making changes to connect with cash-strapped customers. McDonald's, which built its brand on consistency, is introducing new menu items more frequently in hopes of driving traffic back to its restaurants as sales growth slows. Luxury automaker Mercedes-Benz is putting more emphasis on its least expensive cars after losing ground to rivals Audi and BMW.
"The companies that will continue to do well are those that make an effort to truly understand what consumers need right now," Davis said. This could mean offering products and services at more affordable price points or finding new ways to appeal to shoppers' cost-conscious mindset.
There is evidence that this strategy can pay off. Consumer goods giant Unilever has bucked the downward trend in sales growth with its wide range of products aimed at various income levels, from high-end haircare brands to budget soaps and detergents.
"Unilever realizes that everyone is watching their wallets more closely, so they have products that can appeal to lower-income shoppers as well as those who still have more disposable income," Davis explained. "That degree of flexibility is key."
Still, it can be risky for expensive brands to water down their image in pursuit of frugal consumers. "Shoppers don't want to see the top brands they know and love cheapening themselves or diminishing in quality," Davis said. "It's a tricky balance."
He pointed to attempts by Tiffany & Co. to sell cheaper silver jewelry in recent years as an example of this danger. "Tiffany's brand is built around luxury and exclusivity, so when they tried to go downscale, it just didn't feel authentic coming from them," Davis noted. "It ended up confusing and turning off their core customers."
Rather than make drastic changes, Davis believes long-standing luxury brands would be better off focusing even more on the high-end market and making an extra effort to engage with their best customers.
Still, the takeaway is clear: Companies hoping to survive this stretched economy need to think carefully about what financially burdened consumers really want and how to provide it without diluting what made their brands successful in the first place. The world's top brand consultancies have helped companies build their reputations through quality and emotionally resonating with buyers' desires and aspirations. Serving shoppers in lean times may require embracing those roots more than ever.
Source: Story.KISSPR.com
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