Consumers are more price conscious today as their purchasing power is strained to cope with higher prices for a wide variety of products. This trend plays into the hands of value priced brands, for their point of difference is that they cost less than competitors' offerings. Thus, being at a disadvantage to a brand positioned on low price can be more of a problem now than during times when consumers exercise less restraint in their buying behavior. The obvious strategic move is to focus more on value offerings.
It is possible that such a shift in emphasis toward price positioning can harm a brand rather than help it. Take the case of Target, the "cheap chic" retailer that has succeeded by positioning itself as having trendier brands and better merchandise presentation than Wal-Mart. Target has bowed a new campaign with the slogan "Expect more. Pay less." The idea is to reinforce the belief that Target has low prices that are competitive with Wal-Mart. The slogan sounds eerily similar to Wal-Mart's current campaign of "Save money. Live better." Does Target need to be perceived as being like Wal-Mart? Bear in mind that the reason many people shop Target is that they do not value the Wal-Mart experience.
The point? Be true to your brand. Yes, brand position can evolve over time and in response to competitive and customer trends. However, the retreat to promoting low prices will not serve Target well considering Wal-Mart dominates the low price position. Wal-Mart dominates it so well that it has had difficulty moving away from being thought of as only a low priced brand! Target's point of difference resides elsewhere. It should focus on its relevant points of difference (e.g., image and presentation) and leverage them.
Link: Advertising Age - "Target to Put More Focus on Value"
Labels: Marketing Strategy