Value(s) Marketing

Welcome to the recession, and the new era of value marketing! We’re seeing it everywhere: house brands are the new name brands; we’re shopping the sale racks; and movie matinees are the new hot dates.

Understandably, lots of companies are making the decision to cut prices — reasoning that when consumers are shopping based on value, the best way to stay in their consideration pattern is to keep prices low.

It’s a perfectly rational decision. But it’s not at all the only workable approach, and not every business is able to cut prices. There may be a competitor able to secure deeper discounts for wholesale suppliers, and therefore price more aggressively. Or the business may already be offering products or services at the lowest possible cost.

So does this mean that the business is in trouble, doomed to also-ran status in the race for the increasingly rare consumer dollar?

Not at all. If you can’t compete on value, you should consider competing on values.

It sounds odd. But even when times are tight, consumers aren’t willing to cut back on everything; a family that eats out less is still

eating out. What’s changed is that they think about it more, and they really want to make it count.

From a marketing standpoint, it’s less about what’s cheapest, and more about what’s right. Right because the product might last longer, work better, be better for the user, or better for the environment. Or maybe it says something to the consumer, or about the consumer, that she’s really happy to hear.

For instance, Frito-Lay’s Sun Chips isn’t changing their pricing; they’re instead promoting their use of solar power at their Modesto, California, manufacturing plant, with a message that their product is better for you and better for the environment. They’ve also announced that they’re introducing new, compostable packaging next year. And New Balance is pushing a “Made in the USA” message, calling out their domestically manufactured athletic shoes — a subset of their line that includes offerings at numerous price points.

We’ve seen shifts like these — in messaging, in product emphasis and even in marketing channels — in our work with numerous clients in the last few months. And our experience isn’t unique. (The Advertising Age interview with the CMO of Burt’s Bees — linked in the sidebar — gives another example.)

Ultimately, this marketing discussion of values is an interesting sign of a broader conversation that’s happening in every corner of the marketplace: a focus on what really matters. Like any shift in the consumer mindset, it’s a jarring one (ask anyone who’s trying to sell discretionary luxuries). But when things get shaken up, there’s an opportunity to evolve — and there’s plenty of value in that.