BRANDS need to communicate an even greater sense of value to people in these uncertain times, says Simon Bolton, chief executive officer of London-based branding consultancy The Brand Union.
While conceding that 'super premium brands' will always have a following, Mr Bolton says that amid the downturn, people may not spend as much as they used to on relatively more expensive items such as electronics.
This, however, does not mean that they will stop spending, even on the higher-end offerings, because 'people need to reward themselves'.
As such, while they may delay purchasing big-ticket items such as cars, Mr Bolton believes that they will reward themselves with 'much more luxurious FMCG (fast-moving consumer goods) products', such as a 'better quality haircare product'.
One strategy that companies implement in the face of greater price consciousness is to offer 'smart' mid-tier propositions, he says.
For example, airlines could offer a mid-tier service class to cater to business travellers, pitched at only slightly more than economy class.
Another strategy would be to use a compelling value proposition in one area of business to augment another, Mr Bolton suggests.
British retailer Marks and Spencer, for example, recently started offering dinner for two at its UK food halls for the relatively affordable price of ?10 (S$22).
While Marks and Spencer is 'probably still making a margin on ?10', the offer encourages consumers to spend at their supermarkets as well because it seems to be a convenient option, he says.
In Asia, numerous brands have successfully communicated great value, Mr Bolton says, citing Japanese retailer Muji as 'economical with the brand but strong on value'.
Besides offering products at affordable prices, Muji has developed its retail proposition 'really well', he says.
