The recession has given everyone a reality check. We cannot count on income forever as witnessed by the huge number of people with lost jobs. Certainly for those families whose income has been cut short or lessened, but even for others who realize ‘it can happen to me.’
At the outset, people traded down to necessities and cheaper brands. As people settled in to the recession mindset, they realized they could fill a few needs above the bare necessities, but price was still the major determination.
Habits die hard, and people wanted the brands they had always used, or something at least above generic, and that’s where the coupon came into its own.
A coupon narrowed the price gap and allowed the consumer to justify the more expensive brand. The “name” brand was also justified when the generic brand just “didn’t do the job” or the consumer was pre-disposed that the name brand was the only one that could.
To captivate more customers, generic brands were raised in quality and more attractive packaging. That increased their prices, but they were still well below name brand prices.
Generic brands are generally store label brands, and although they are contracted from major manufacturers under the store label, this put the stores in direct competition with the manufacturers, some of whom resorted to TV ads to keep sales up.
Although the innovative pricing is most apparent in the food stores, other retail stores are offering deals, bargains and discounts to get the consumer into the store. Restaurants are offering coupons and deals on the second meal, just to keep their doors open.
We, as consumers, should realize if these manufacturers, restaurants and stores are making profit taking less of our money today, they were formerly over-charging to the maximum their customers would allow.
The consumer’s current resourceful behavior has been the engine of change in the business model of manufacturers and the stores that sell their products. Price is still king, and as the recession goes through its cycle, people are satisfying more needs beyond necessities, but they are insisting on quality, reputation and customer service, and are still very careful with their money.
We hope that this is the new standard.
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