According to a recent survey conducted by YouGov asking consumers how their behaviour has changed during the recession, 55% said that they are looking for discounts or extra free promotions. A respectable 24% said that they were more likely to look for added value promotions, like Walker's Gary's Great Trips or Becks - Do Something Different.
Naturally consumer sentiment dictates marketeers behaviour. You only have to look at the shopping aisles to see the proliferation of discount deals on offer. Whilst this might achieve short term sales uplift, and appeal to the discount hungry consumer, what are the long term effects of this strategy?
The most obvious concern is that consumers' perception of a brand is detached from the real value and benefit a product offers. It becomes a mere commodity that you buy at the lowest price with no regard to quality, provenance or features.
Surely if everyone is offering a discount, where is the point of difference? If this phenomenon perpetuates, the consumer will start to view sales promotions in the same way as excessive advertising: noise to be ignored, a turn off, an intrusion you could do without.
WHEN we emerge from this recession, how easy will it be for brands to retain market share without continuing to discount? The danger is that consumers may come to expect price promotions permanently! A slippery slope - remember Pizzaland in the 90s? No, nor does anyone else.
The braver, long term approach would be to try and protect your value, preserve margins and work harder to engage consumers with strong promotional ideas that enhance not detract VALUE.
It is debatable whether advertising will ever return to it's former glory as the drive to find better and better deals is shifting consumer spending online; an environment where sales promotion can thrive. Inspiring sales promotions that add rather than subtract value, should now take their rightful place on centre stage of a marketing campaign.
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