Tighter Budgets Lean Times
Not every economic downturn is created the same. This one is global and is occurring at the same time which has major ramifications for all industries. It is also the best time to gain market share for those willing to double or triple their efforts.
Take for example big box retailers like Costco and Walmart who are both still enjoying solid success despite the current climate. They have done this through a concerted marketing effort and accompanying message of low prices. By now everyone knows the bouncing yellow smiley face and many of you probably remember the cowboy version of the smiley face slashing prices. Walmart positioned itself properly going back several years during the good times. Back then lower prices didn’t seem all that important as the economy was booming and people were flocking to stores like Target which was perceived as having a higher value.
Fast forward twenty four months to today. Target has announced major changes to both store expansion and to the credit portfolio their bank holds. They are tightening credit standards, lowering and eliminating limits all the while they are trying to get the message out that they are now the low price leader. A few years back they prospered being portrayed as the higher end retailer and they are now left scrambling to make customers understand they too are price competitive.
Costco is another interesting case. By providing massive amounts of goods at reasonable prices they have done very well and in many respects have been recession proof. Instead of promoting low prices they instead have promoted maximum value which was done by selling large blocks of goods at bulk prices. Whether or not the bargains are really there is still up to the consumer to decide which to this point they have by continuing to spend money in the stores.
These are two dramatically different approaches but they illustrated the importance of picking a message and sticking with it. Both brands have flourished and continue to prosper during difficult economic times by having a multi-year coherent message. The economy is going to have some historic lows and will continue to be extremely volatile over the next two years. Use this time to build your brand message and brand loyalty.
Tags: brand loyalty, strategic marketing