For most people most of the time price is the overriding issue when making a purchase – be it a house, a car (look at EV price problems) or a beer.
For decades adland has patted itself on the back that its big-spending clients can defy such odds, selling premium products at a price that delivered a profit – despite ever-increasing marketing costs. This even seemed to be the case during the recent cost of living crisis (which hasn’t gone away) as even dizzying annual rates of Inflation (11% in the UK at one point) failed to dent the world’s bigger consumer goods companies. Some put this down to “price gouging.”
But the chickens now seem to be well and truly coming home to roost. There’s rarely a better example of branding than booze and currently the world biggest brewers are suffering flat or declining sales and spirits giant Diageo (which has defied price pressures for years) is facing an unheard-of drop in global sales with under-fire newish boss Debra Crew saying the dip may last for up to 18 months.
Purchase intelligence company Cardlytics has just produced a report showing that UK adults now rank price as the most important factor in purchases even as 69% still view trust in a brand as important and 59% say they have been loyal to brands for “as long as they can remember.” One suspects these numbers would be markedly lower in the about-to-be-adult generation.
This is a challenge for all businesses, especially at a time when trust in large organisations is arguably at an all-time low. It also challenges the orthodoxy that so-called performance marketing is the be-all and end-all in the digital era, putting short-term results ahead of that elusive brand loyalty that still has some impact on consumers. After all, not everyone can have the lowest price although that doesn’t stop supermarkets, for example, claiming they have. Hence more loss or trust.
Successful brands match quality and value, if they’re lucky with that sentimental attachment on the part of the public that the best advertising used to generate. Stocks of this particular weapon are running rather low these days.
