A weak economy has forced marketers to evaluate the pricing structure of their products. Consumers are being more cautious with their spending, and value priced offerings have become more commonplace as businesses strive to meet consumers' needs and remain competitive. It is important to note that there is a difference between offering value priced products and lowering prices on products. In an article in 1-to-1 Weekly, John Gaffney points to examples of how companies have responded to the economic downturn by offering new products. For example, Quizno's created a value line with its Torpedo sandwiches. This line provided an alternative to the core sub sandwich line, which remained essentially unchanged.
What are the implications for brand management? Customer value does not have to be price-based. Offering price-based value, like Quizno's Torpedo subs, is one way to win customers and market share. The ideal is to avoid damaging brand equity of core brands by discounting price. It opens flood gates that are very difficult to close. Protect brands in bad economic times so that they are poised to succeed when good times return!
1-to-1 Weekly - "Innovation Beats Pricing in New Economy"
Labels: Brand Management, Marketing Strategy, Pricing