A recent article in The New York Times suggests that Americans are shifting their lifestyle aspirations downward as the economy shifts downward. More specifically, the pursuit of affluence has been replaced with a reality of frugality. Higher order need fulfillment that marketers seek to position their products to meet such as achieving a desired social status, appealing to one’s values, or self-image enhancement are being replaced by more practical needs such as saving money and controlling expenses.
If this shift is indeed occurring, does it mean that marketers positioned to serve upscale markets should abandon their focus or face impending doom? No. Affluent markets will continue to exist, meaning opportunities to serve that niche will continue to be there. Obviously, the value-conscious segment of the market is another opportunity today. As consumers tighten their belts, any way that a marketer makes it easier to buy products, whether it be low price, layaway (yes it’s coming back), or friendly credit terms, will make those offerings more relevant.
It is the offering that is neither upscale nor low price that is the most vulnerable. A brand’s value proposition must be compelling enough for people to decide to part with their money. If value, either in the form of benefits or minimizing consumer sacrifice, is not clear to consumers, the prospects for weathering the current economic storm are not very good.
Link: The New York Times – “Goodbye Seduction, Hello Coupons”
People are definitely changing the way that they spend money. I agree with your comment that Americans are going back to more practical habits like saving money and controlling expenses. However, people are still spending money, but just think a little harder now due to the economy. It will be the marketers job to change the way they think as well. They must get into the minds of the consumer in order to reach a certain emotion. They must want to spend. The challenge is that designating “needs” from “wants” is how most people are thinking to become more practical. Starting with an idea that breaks that thought would be beneficial to a marketer. In the recent months, I have seen a change in the way things are being marketed which makes me believe that the challenge has already begun. Marketing has been more direct and aggressive than I have seen in a long time.