If there’s one thing that’s different about this recession from the ones before, it’s the permanent shift of customers from premium to value brands. In a recent report, McKinsey says that marketers of premium goods who are waiting for a return to normality following the recession may be disappointed. “Their customers have tried cheaper products—and actually like them”, warns the report.
But, in another way, this recession is not very different: as can be expected, the percentage of consumers “in play” – that is those who’ve tried out a cheaper brand and are happy with the experience – is lower for beer (<4%) and other high-involvement product categories as compared to cold and allergy medicine (>10%) and other low-involvement ones.
Purveyors of value for money brands in low-involvement categories can seize this once-in-a-lifetime opportunity to grab customers of premium brands – and retain them even after the economy recovers. But, this needs a highly nuanced approach and direct mailers, search engine marketing, online shopping and other one-to-one tactics might work the best.