Positioning your product in a downturn
Posted on 12th July 2022
As inflation and unemployment increase and the economy faces a serious downturn consumer confidence is at its lowest for almost 50 years.
While the complete economic picture must still unfold many people will be feeling the financial pressure of increases in food and fuel costs. They are much less likely to buy more expensive items too as they hold on to their ‘rainy day money’.
Businesses will need to be adaptable, flexible and creative about their approaches to sales. Simply dropping prices to retain market share might not work and could irreparably damage profitability. However, selling the same product or service in the same way is unlikely to work either.
To encourage people to continue buying from you it’s time to emphasise the value you deliver to your current and future customers and to explain clearly why they should do business with you.
Example: Dr. Martens
Local boot and shoe manufacturer, Dr. Martens has chosen a direct to consumer (D2C) sales strategy with price increases alongside what it calls a ‘scarcity mindset’. The company says it wants demand to be greater than supply and it seems to be succeeding. Over 14million pairs of boots, shoes and sandals were sold in the 2021/22 financial year; twice as many as four years ago despite the challenges faced in the pandemic.
The company reported an 18% rise in revenue year on year to £908.3million and has seen pre-tax profits increase by 43% in the year to March 2022, compared to 2021.
Chief Executive, Kenny Wilson says: “In times of tight spending, consumers turn to brands they trust, icon brands.”
So, rather than cutting costs to attract customers, the company has positioned itself as providing an investment product that represents good value for money. It carried out a pricing study across its priority markets to work out its ‘perceived value for money’ and how that could affect demand. They concluded that their price increase wouldn’t reduce demand. It plans to carry out a similar review in 2023.
Building your brand
Understanding what is at the heart of your brand will allow you to position your product in a way that’s relevant to your customers so you can plan for the future.
Dr. Martens has prioritised D2C sales, organisational and operational excellence, connecting with customers, and supporting brand expansion through business to business (B2B) sales. Another possible lesson to be learnt from the company is the way it uses employees as ‘brand custodians’ to enhance it for future generations.
They have also recognised the growing drive towards a circular economy, replacing ‘take, make, waste’ with ‘reduce, reuse, recycle’. The company is now creating a more sustainable approach to resale, repairs and end of life management for its products.
Are these ideas you can apply to your business and share with your customers?
Speak directly to your audience
Pulse magazine arrives through your customers’ letterboxes in the Northamptonshire and Milton Keynes areas, giving you an ideal opportunity to share your unique brand values directly with them.
If you haven’t considered the power of advertorial content we’ll be happy to tell you more. Complement this with a well-branded advertisement and you will be sending a strong message that your product will deliver value and quality.
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