Revenues are not the only thing that suffers when the economy slumps. Brands take a hit. Research clearly shows that consumers increasingly scrutinize purchases, re-evaluate brand loyalties and are prone to trade down on brand purchases.
What’s an organization to do?
Some turn up the heat and spend even more on promotional campaigns seeking to strengthen their brand and possibly also capitalize on those brands that may be suffering.
Manufacturers sometimes reduce the size of packaging for consumer items such as snacks. They delay passing on cost increases. Many squeeze internally, trying to reduce expenses with things like delayed capital expenditures and workforce reductions.
Retailers have few options and eventually wind up discounting – either through increased coupons, sales or just across the board reductions.
Ann Zimmerman writes on the subject in the Wall Street Journal @ http://tinyurl.com/5wlmdll