Brand loyalty During a Down Economy and the Decision to Bypass Generic Cheese Curls

By: Anna Bielejec

While the economy has undoubtedly impacted the way in which consumers allocate their available monetary resources during a trip to the grocery store, the degree to which the consumers seem to be opening their wallets appears to depend less on price than it does on value. Los Angeles marketing analyst Wes Brown, says the variability of brand loyalty in a down economy depends on the product category. So while a large part of the grocery shoppers in times like these are willing to forgo loyalty to their snack-of-choice Cheetos Brand Cheese Puffs, a decision to splurge on a tasty brand name snack is far more likely to occur than a splurge in a pricier category of purchases on say, a fancy new king size, extra deep, pillow-top mattress. Furthermore, Wes Brown sees a bag of M&Ms as an indulgence that is well worth a consumer’s dime, on grounds that if everything else in your life sucks, why would you get rid of the one relatively low-cost thing you like?”

The fact that consumers are increasingly purchasing products that define their individual lifestyles is another reason consumers may not automatically be forgoing the pricier grocery products. Consumers who are unable to purchase all the products that match and enhance their desired organic, macrobiotic, and vegan lifestyles will engage in a trading game of sorts, where they will opt for generic private label goods in certain low interest categories to enjoy a higher standard of grocery “living” in the others.

To combat the threat of losing certain consumers, many household-name brands have begun executing value-driven marketing and rebranding campaigns. While Kraft instituted the “why Snackrifice” slogan, and Oscar Meyer Deli Fresh Meats rolled out the tagline “deli fresh, without the deli counter price,” Kool-Aid added “more smiles per gallon.” Also eager to boost its value “image,” Lean Cuisine recently introduced the phrase “we believe in food that’s good for you and good for your wallet.” In theory, the idea of boosting the perceived value of a product by changing its brand image makes sense. In practice, though, I would love to know how well it has actually worked.

Interestingly enough, there has been some debate over whether a company’s decision to creatively reimage its brand during an economic downturn is actually wise. While some marketing professionals believe this type of brand reimaging is a smart decision because it tracks to consumer expectations, others disagree. Marketing guru Miles Smith of Pittsburgh’s Smith Brothers Agency believes that companies should exercise caution before making the decision to alter the value perception of its well-known brand, on grounds that doing so could “discount your brand into being considered a commodity, and train consumers to expect a sale everyday.” So where is the balance between it all? What should a company do with its brand during economic upheaval? I’m going to leave that question for the marketing pros, end this blog, and go buy myself a bag of Cheetos. I’ve earned it.