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94 Managing Customers Through Economic Cycles

If a business had a high-end product and decided to
boost sales with a discount strategy, consumers would
translate that into lower quality and instead of buying the
high-quality product, they would possibly decide not to
buy it because of what the lower price implied in terms of
quality and even status, i.e. classic brand erosion. There is
a huge risk in shifting a value proposition too far away
from its origins. It’s very easy to see an erosion in the
brand.

For example: R.M. Williams knows that boots can’t just
look good. They have to fit comfortably as well. From the
first moment, they should feel like your feet have known
them for years. R.M. Williams have more sizes than most
boot makers (and they fit where it counts). The price is high:
$300 or $400. It might be considered overpriced but it’s also
what customers have come to expect. If R.M. Williams
started offering value-based boots for 70 ready dollars, what
would be customers’ reactions? Many wouldn’t even look at
the brand. They’re known as a prestige brand. If they start
to discount and offer an alternative pricing option, customers
will question the brand credibility based on what has been
established over time. Trust, the all-important trust, will have
been compromised.

Focus marketing initiatives in sync with
consumers’/customers’ source of funding

One of the critical elements of successfully navigating eco-
nomic cycles is to focus marketing initiatives in line with
how consumers/customers change how they fund purchases.
In the airline industry, downturns in economic conditions
have a significant change in both their business and leisure
markets. In the business travel market, all of the travel is
funded by the employees’ business, which makes it critical