Many brands in these inclement economic times have been focusing on cutting their prices to create stand out and drive sales. Such an approach obviously makes brands more attractive to consumers; however, on the flipside, slashing prices can damage brand values, have a negative impact on longer term engagement, and reduce profit margins.
It’s far better to look at other options before taking the price cutting route. An important one is investing in delivering brand awareness and trust, something we have found is key after undertaking recent research on brand versus price.
In a study we carried out, 35% of consumers stated they always choose to buy from a brand they recognise and trust, compared to just 20% who buy from those offering the lowest quote on a price comparison website.
Interestingly, the research also revealed that those serious about targeting an older age group, such as the over 55s, particularly need to focus on building brand awareness – 43% of those in this age group buy from brands they trust.
Though it’s worth bearing in mind that while consumers aged between 18 and 24 are more likely to buy based on the cheapest price than older age groups, a substantial 38% of this audience will still always buy from a brand they recognise.
This research makes it clear that whatever demographic you are targeting – young or old – slashing prices is not necessarily the answer to improved sales, with those marketers who have taken the cut price approach in the current slowdown possibly being a little hasty.
It’s much better to invest the money you were planning to write off in any price cut in an integrated marketing campaign to build brand awareness and trust. This way you can drive sales without damaging your brand.
And, in the current climate, those brands that do invest in targeted integrated marketing activity to build brand awareness are likely to experience continued growth, ensuring they stay ahead of the competition when the economic environment improves.
Kevin Taylor is chief executive of Gravytrain
