Trading Down Has Companies Looking Up

An article in yesterday’s San Jose Mercury News entitled “In Recession consumers turn to small indulgences,” reinforces what I’ve been telling clients and students for months:

First, there are companies who are doing well in this gloomy economy, such as Hershey’s, Kraft Food, Wal-Mart, Dollar Tree, as well as some that would not necessarily have come to mind, like running shoe and bicycle helmet manufacturers, coin dealers and gardening tools from BBQ Bazaar.

Second, a key behavior is for people to trade down from their prior behavior. So people who used to eat out at high end restaurants now move to mid-range eateries; those who used to frequent mid-range eateries go down a notch to lower end restaurants; those who used to go to the lower end restaurants now head to McDonalds or Taco Bell. Or folks who might have eaten out previously are now enjoying a nice dinner at home–a trend that not only helps the grocery chains, but stores like Target as well who are positioning themselves as the key player to help people dress up their “at-home” experience.

This trend is true across many industries–such as hotel and travel, automobile sales and leasing, or clothing. It’s not that people are no longer spending; it’s that they’re spending their dollars much more selectively.

As marketers we need to help our clients focus on reaching the new consumers–those that have traded down to where we are today–rather than those who used to aspire to move up and associate with our brands. The market’s out there–it’s just dressed differently, with a different set of faces, goals, and challenges than we’re used to.

But the opportunity is there for companies to move up by capitalizing on the movement to trade down.

This entry was posted in Marketing Strategy and tagged , , , , , , , , . Bookmark the permalink.

Comments are closed.

  • Read Our Blog

  • What’s New

    PodcastLinda Popky appears as a guest expert on Technically Speaking to outline your steps to launching and promoting your book! - Listen

    Podcast: Linda Popky and Dan Weedin (Shrimp Tank Podcast) talk with Brett Clark from BC Fitness about the importance of staying active and doing resistance training to slow down muscle loss as we age. - Listen

    SAC® Press Release: "Companies Eye Innovation and Disruption in Volatile Economy" – Read Release.

    Video: Just a Moment for Marketing: One-minute marketing tip videos. – View over 100 videos.

    eBOOK: Top of Mind: 101 Insights to Transform Your Business
    Purchase PDF or ePub book.
    Top of Mind

  • Read Our Blog

  • Subscribe to the Top of Mind Thursday Newsletter

    Free articles download with sign up
  • Marketing Above the Noise

    Introducing Dynamic Market Leverage™, an approach to help cut through the clutter, stand out, and effectively build business.

    Marketing Above The Noise

    What's Inside Available in Hardcover and eBook formats