A Yankelovich consumer survey reveals that marketers thinking about lowering prices may be damned if they do and almost as damned if they don’t. The poll concludes that price cuts in hard times confirm customers’ “deflationary expectations” that prices are usually too high, while holding the line tends to stimulate their deflationary hopes. The answer, Yankelovich opines, is to tie your brand to factors beyond price, such as special causes or occasions, or demonstrated long-term savings.
TO CUT OR NOT?
| Assumptions when a brand LOWERS prices in tough economic times | |
| The brand is normally overpriced | 70% |
| The product is old, about to expire or be updated, and the company is trying to make way for new stuff | 62% |
| The price will go down further if you wait longer | 55% |
| Assumptions when a brand DOES NOT lower prices | |
| The company will eventually have to lower prices if you wait long enough | 61% |
| The company is only selling to people who have a lot more money than you | 45% |
| Source: Dollars & Consumer Sense 2009 study, The Futures Company | |
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