Value is of course the theme of the moment, and marketers are all scrambling to add more “value” into their marketing plans for 2009. I met with a retail buyer last week, and tried to convince her that there was still a role for premium brands in a recession. I shared my opinion that a recession simply heightens the urgency for premium brands to prove that they are meaningful enough to command a premium.
The retail buyer disagreed. She said that premium brands had two and only two choices in this economic climate. Either increase price promotions to compensate for the premium or permanently lower the price so that there is no longer a premium at all. Merry Christmas.
I think it will be important for brands to be responsive, but not reactive, to this economic climate. Make sure that your brand has renewed meaning for consumers who are genuinely struggling, but that doesn’t mean that you have to start behaving like private label.
(If you’re curious, my meeting fell squarely in the “Lifer” classification of the 8 Types of Retail Buyers.)
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It always amazes me how shortsighted many people are in a recession. I completely agree with you, there will always be room for a premium brands. If anything, there’s more of a need to stay premium.
But the second you stop behaving like one is the second you throw away years of brand equity, equity you won’t get back once times get better again.