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In a Sluggish Economy,consumers Will Buy Even the Most Modest

question 36

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In a sluggish economy,consumers will buy even the most modest of products with the same discretion once shown only to big-ticket items,like computers,airfares,and designer clothes.The results are a growing popularity of cheaper private-label products and the likelihood that price wars among consumer goods could lead to the same kind of consolidation that occurred in the airline and electronics industries.Moreover,analysts say changing buying habits will force premium brand marketers to lower their prices to protect their positions.These companies may also upgrade products to distinguish them from private labels and promote their brands more aggressively than ever.
One analyst says that consumers are forcing product innovation.Products have to be sold on merit.As a result,there will be fewer brands of significance,but the significant brands will be stronger.Brand loyalty is believed to exist only when,or if,value is provided.How do the significant brands compete? One analyst says that a combination of sensible pricing and innovation with a strong brand name can stabilize market share.Reformulated or repackaged products are typical examples of innovative attempts to solidify market share.
-Refer to Consumer Buying Habits.In the past,Procter & Gamble set prices on significant brands such as Pampers so that total revenue was as large as possible relative to total costs.Which type of approach does this represent?

Definitions:

Local Pet Store

A retail business that operates within a community, providing pet-related products and sometimes services like grooming or adoption.

Marketer

A professional involved in the promotion, distribution, and selling of products or services, aiming to satisfy customer needs and achieve business objectives.

Product

An item or service created to satisfy the wants or needs of consumers.

Service

The action of helping or doing work for someone, often constituting an intangible commodity.