Marketing In An Economic Downturn

. Friday, January 9, 2009
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It pains me when I see so many brands destroying their brand equity in just a few weeks.

Walking down Robson Street I am bombarded with signs that say 80% OFF, 3 for 1 or even Everything Must Go - 75% Off

What this tells the consumer is, We Really Need To Shift This Stuff, Take As Much As You Can Because We Don't Want It

Retailers have to understand that people find value by comparison. We compare our clothes with what others are wearing, we compare our car with what others are driving and we compare our prices with what others are paying.

A good example of how we compare is that a year ago 80 cents/litre for gas was expensive, now 80cents/litre for gas is cheap. How did this happen? Did 80cents just become less valuable? What changed is our reference point. A year ago we were comparing 80cents to 65cents. Now we are comparing 80cents to $1.30.

Try it! Think of how you can find value without comparing. If you think you are buying because of function, you are mistaken. Your buying because what you had before did not have that function, you are comparing in order to give that function value.

If your whole store is 50% off, how is your customer going to find value? They now have no base to compare. How can a sweater be a great deal if a similar sweater next to it is reduced by the same amount.

I saw this happen in Macy's. Macy's reduced almost all of their stock, cutting prices by up to 75% off. Now to consumers the sale price was the regular price because they had nothing to compare it to. Barneys however did a better job, discounting select items and placing them around regular priced items. Now a sweater that is marked down by 50% is a good deal because the one next to it sells for regular price.

Allow your customers to compare. But don't expect to sell the item selling at regular price, therefore stock a minimal amount. Do expect to sell the item on sale!

(Look for part 2 of this post coming soon)

Try this! (Without cheating)

Without looking on wikipedia, answer the following questions.

a) The African continent has more or less than 18 countries?
b)How many countries does the African continent have?

The answer and purpose will be revealed in part 2 of this post.