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Better money habits commerical12/2/2023 Then tailor your marketing strategy accordingly. Determine which of the four segments (slam-on-the-brakes, pained-but-patient, comfortably-well-off, live-for-today) your core customers belong to and into which consumption category (essentials, treats, postponables, expendables) they assign your products or services. To get the biggest returns from your marketing budgets: For example, for slam-on-the-brakes consumers buying treats: shrink packaging sizes, hold prices down, and advertise your products as “you deserve it” small indulgences.Īdditional suggestions for tailoring your marketing strategies to consumers’ recession psychology: Manage Your Marketing Investments Tune your marketing strategies accordingly. are desired items that can be bought later.carry on as usual, though delaying major purchases.Īlso identify how members within each segment categorize purchases:.consumers feel hardest hit and reduce all spending.How should you market in this downturn? Resegment consumers according to their emotional responses to the recession: No two recessions are alike, so you’re in poorly charted waters every time. Instead, firms should streamline their product portfolios, improve the affordability of their offerings, and bolster customers’ trust. Many make the mistake of cutting costs indiscriminately, which can jeopardize long-term performance. People may switch segments if their economic situations change for the worse.Īll groups prioritize consumption by sorting products and services into the following categories: essentials (central to survival or well-being), treats (justifiable), postponables (can be put off), and expendables (unnecessary or unjustifiable).Īs firms manage their marketing investments, they must simultaneously assess their brands’ opportunities, allocate resources for the long term, and balance their budgets. Live-for-today consumers pretty much carry on as usual, responding to the recession mainly by extending their timetables for making major purchases. Comfortably well-off individuals consume at near-prerecession levels but become a little more selective (and less conspicuous) about their purchases. Pained-but-patient consumers, who constitute the largest segment, also economize in each area, though less aggressively. Understanding consumers’ changing psychology and habits, the authors argue, will enable firms to hone their strategies so they can both survive the current downturn and prosper afterward.Ĭonsumers in a recession can be divided into four groups: The slam-on-the-brakes segment, which feels the hardest hit, reduces all types of spending. But guidance is available, say Quelch and Jocz, who have studied marketing successes (by Smucker, Procter & Gamble, Anheuser-Busch, and others) as well as failures throughout past recessions and identified patterns in consumer and company behavior that strongly affect performance. Because no two recessions are exactly alike, marketers find themselves in poorly charted waters every time one occurs.
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