Harris Interactive's latest EquiTrend study bears out conventional marketing wisdom in a recent MediaPost article: Poor Economy Heightens Brand Equity. The gist: when the economy turns sour, consumers "tighten their grip on brands they are loyal to; they don't run to the label with the lowest price." Couldn't have stated this more succinctly if I tried.


When the economy forces consumers to hold onto their wallets, product companies tend to slash prices, often turning out products with diminished quality to be able to do so. What does that approach do to their brands in the long term? As many smart marketers know, value doesn't only correlate to pricing. In fact, many other factors do–quality and trust among them. To ignore those has the serious potential of undermining brand equity, which, we all know, takes time and effort to achieve.
In the Harris Interactive study, 1000 brands across 39 consumer product categories were measured. Some of the parameters:
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Brand familiarity
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Quality
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Purchase consideration
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Brand value for the cash outlay
This won't come as a surprise to savvy marketers: comfort foods and staples were clear winners in the survey, conducted during March and April 2009, which included 24,446 consumers, aged 15 and up. Just over 1200 brands were included in the study and respondents were asked to rate 60 "randomly selected brands".
Not surprisingly, brands in the financial services and insurance sector scored poorly; a direct consumer response to their violation of public trust in recent months.
The winning brands comprised a mix: from premium to mass-marketed brands, as well as niche ones.
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M&M's Plain and Peanut Chocolate Candy (comfort, anyone?)
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Hershey's Kisses & Milk Chocolate Candy bars
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Reese's Peanut Butter Cups
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Arm & Hammer Baking Soda
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Campbell's Soups
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Crayola Crayons
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Kleenex
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Google
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Honda--Automobiles
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Subway--Fast Foods
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KitchenAid–Appliances
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Coca-Cola–Beverages
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Sony–Consumer Electronics
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Microsoft–Software
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Southwest–Airlines
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Grey Goose–Liquors
All of this is not to say that consumers aren't forced to sometimes forgo their favorite brands if they simply can't afford them right now. But, many are equally reluctant not to pony up a bit more cash to purchase what they like, and what they know works for them. They ask themselves whether saving a few dollars for alternatives might not lead to disappointment. . .so they tend to stick to the brands they know and like.
Memorable article quote comes from an L.A. analyst, Wes Brown: "Loyalty that is driven by value isn't about price."
Questions:
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As a consumer, do you have specific brands you continue to buy even though there are cheaper alternatives?
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Which categories will you sacrifice favorite, more expensive brands for cheaper ones to save money in this economy?
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Which brands are you most loyal to and what makes you loyal to them?
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What kinds of brand "values" matter most?
I'd love to hear from you.