Article from MarketingProfs (08.16.10)

Ted Mininni   BIO

A recent consumer study reported in Brandweek confirms many of my suspicions.

“As the economic downturn has persisted, marketers have comforted themselves with the thought that a lot of pent-up demand must be accumulating. But a survey issued this month by Deloitte and the Harrison Group gives reason to wonder whether this reservoir of demand actually exists.”

Click here for Radio Broadcast

Guess again. “From a marketer’s point of view, one of the poll’s findings is particularly alarming in this regard: 65 percent of respondents agreed with the statement, ‘Even though I am spending less on products now, it doesn’t feel like I’m sacrificing that much.’” Uh, oh. . .

Recap of findings: The Percentage of People Saying They Are More or Are Less:
• 61% are more price-conscious.
• 42% are more smart; they feel good about themselves because they’re spending more carefully.
• 42% are more frugal.
• 23% are buying less to please themselves.
• 24% are less new product focused.
• 31% are less brand loyal.
• 43% are less impulsive in making purchases.

Here’s the kicker: When a significant percentage of respondents voice these kinds of opinions, they’re not likely going to be returning to their former free-spending days anytime soon. In fact, 44% agreed that: “I can’t believe how wasteful I used to be when I shopped.”

Also of note: Just one-third of these respondents felt they’re sacrificing when purchasing store brands vs national brands. 80% agreed that: “I believe most store brands are manufactured by the traditional national brands.”

The upshot: “It’s not that the economy has made people indifferent to brands. Rather, it has made them more discriminating about brands.” A whopping 75% of respondents stated that this economy has helped them discern which brands matter to them, and which ones don’t.

This is a challenge to marketers and brand managers. The question they must answer is: “How can we become one of the all-too-few brands that matter in a marketplace that has likely changed for good?”

Questions:
• Have you changed your spending habits due to the economy?
• Will you continue to spend more cautiously, even as the economy eventually improves?
• Do you agree that many brands don’t matter to you now? What about the brands that do: are you loyal to specific brands still?

I’d love to get your feedback.