In a recently published white paper entitled “Brand building in Quebec in uncertain times” we wrote that marketers should emphasize value over price reduction. A few readers asked me for proof. Here it is: research evidence that discounting damages brands. (As reported by Brandweek)
Yankelovich’s Dollars & Consumer Sense 2009 study found that consumers often have a negative reaction when they see the price slashed for their favorite product or service.
In fact, 70% of respondents said such cuts probably mean the
brand was overpriced in the first place. 62%
said they assumed that the product
was old and they were just trying to get rid of it.
Brands that do not discount achieve a positive halo among many consumers. 64% said they assume the product is either extremely popular or a good value if they maintain their price.
Up to 60% believed companies that cut prices would continue to do so. Marketers should create expectations of ongoing value, not ongoing price cuts.
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