The Approach in Action
The economic crisis of 2008/2009 demonstrates the impact of appealing to consumers who are motivated by more than just achieving the lowest price. Why was Apple able to post record revenue and profits, when every media article was telling us that consumers were cutting back on discretionary spending and required huge discounts to motivate them? Have you ever seen a 70% off poster at an Apple store? How did Subaru increase vehicle sales in 2008 when everyone from Ford to BMW saw their sales numbers drop by 20 to 50%? Conversely, how was Wal-Mart able to keep posting revenue gains when Circuit City, Bennigans and so many other companies who were offering “value” were filing for Chapter 11?
Understanding the distinction between different types of consumers is the key between success and failure. In a boom, the sheer tide of money carries everyone forward, but those who fail to learn the lessons crash against the rocks when the tide rolls back out. We are strong believers in the resolute nature of the US and Canadian people, but recognize that our economies face a long road ahead of them to reach previous levels.
If you wish to preserve or grow margins you need to understand how the people who will pay them think. If you can accept low margins and can become the lowest price provider, then traditional commodity marketing techniques can still work. If you want to stay in business, you had better learn the difference!
This has never been more important than it is right now.
