The first response in an economic down turn is for business people to think discount, and for some, that type of market adjustment will allow them to ride out the wave of the down turn in anticipation of the return to good times.
For many, the path of discounts is the path of no return, and the pathway to financial ruin. In contrast, there is another class of business that thrives in the economic down turn, the quality trust brand.
In down turns, some people want cheap, but many are looking for quality. In many sectors, the quality trust brand of the sector actually grows in the down turn, while the less reliable brands struggle and at times disappear.
So how do you position your brand as a quality trust brand, robust enough to ride out an economic down turn?
Quality trust brands say certainty of outcome. For people, especially in a down turn, where there is not a lot of cash to clean up mistakes, a brand that gives a guarantee of an outcome or quality of product, will become a brand of choice.
Money back service promises, quality product promises and results based promises, are those very things that allow your customers to trust your brand.
Take for instance the growth of the pure coffee market in Australia. Roast and Ground coffee in Australia is worth $96 million in total retail sales, an increase of 28% over the last 5 years, due to the increase in appreciation of higher quality coffee.
This flow on effect continues. When you look at the value add of the café culture, where coffee, becomes café late, the sales of hot drinks surpassed A$1350 million in 2008 and is expected to be worth A$1473 million in 2013.
Today, one in seven coffee drinks consumed in Australia, is consumed out of home, in cafes, where fussy Australian consumers are just as discerning about ambience as they are about the flavour.
So fussy are Australian coffee drinkers, that US café franchises Starbucks failed to reach significant share. Starbucks could not simply compete for the Australian coffee palette, which demanded quality, boutique brands and creativity.
So the quality sector of the tea, coffee and food sectors in Australia have been resilient in the down turn, with some segments actually stellar performers. Fair Trade coffee has grown a mind blowing 910% between 2005-06 and 2010-11 and while Fair Trade tea, grew at 2,225% for the same period.
In a down turn researching customer needs is more important than ever, for it is only through research your brand can go above and beyond and offer that quality, trust and certainty that will position your brand as the brand of choice in turbulent times.
Hearts and Minds