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Discuss the Impact of the Recession on Consumer Behavior and on Marketers - Essay Example

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Discussion of the impact of the recession on consumer behaviour and on marketers BY YOU YOUR SCHOOL INFO HERE DATE HERE Discussion of the impact of the recession on consumer behaviour and on marketers Introduction The recession is causing numerous changes in consumer behaviour, especially in relation to their brand loyalty and their cost-conscious methodology when selecting products…
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Discuss the Impact of the Recession on Consumer Behavior and on Marketers

Download file to see previous pages... At the same time, marketers are resorting to new promotional campaigns in order to remain competitive and gain consumer attention in the face of this current economic downturn. Food and technology Statistics indicate that six in 10 consumers have reduced the volume of frequency as it pertains to eating-out in restaurant environments (Bainbridge 2010). As a result, especially noticeable in the pizza restaurant industry, marketers have changed their promotional activities to include vouchers with significant pricing discounts (Bainbridge). Where once major companies in this industry, such as Pizza Hut, used psychographic segmentation and targeting to gain attention and loyalty, they are finding it more difficult to compete especially when their products carry high price tags over competition. Companies like Pizza Hut once had well-established consumer segments that were devoted to the brand and were able to use rather low-cost marketing and higher price methodology to ensure positioning in terms of quality. Today, however, the recession has created price wars that continue to erode profitability especially with more consumers eating within the home and avoiding the high costs of restaurant eating. This is also noticeable in the fast food industry with new promotions being added to traditional menus, such as McDonald’s with its dollar menu variety. However, this marketing effort is not bring the type of profit results marketers had once experienced early in the recession. Today, new freebie offers and Internet-based incentives coupons are becoming the norm for many consumer segments (Glazer 2009). This shows a shift in consumer behaviour toward active searching in the consumer search process to identify coupons before they will frequent even their favourite restaurants. There is clearly a value-driven methodology in consumer groups that change their buying behaviours and choices. This is even apparent in how grocery stores market their food products, with the new value-based consumer searching for low-cost products. Statistics indicate that 53 percent of today’s recession-minded consumers are buying fewer organic products and 50 percent are even turning toward generic or private label brands (Frozen Food Age 2008). Organic products and well-known product brands used to be the driver for significant profitability in the grocery industry, however the recession is changing the supply chain to identify new value for consumers in order to sustain their business. Morrisons, one of the largest grocers in the UK, has control over much of its supply chain and is therefore able to ride out the recession successfully by using new promotional tactics. The store is able to provide fresh food options at a much cheaper price than competition and uses this fresh quality positioning to sustain higher profitability than other markets without control over their purchasing system (Mortimer 2009). However, it shows that the consumer propensity to change from their loyal and trusted brands to generic and private label brands and how it has affected total marketing and purchasing/distribution strategies. The grocery industry has identified that 44 percent of shoppers now consider private label products to be on par or even better than long-standing trusted brands (just-style.com 2009). This is a danger to ...Download file to see next pagesRead More
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