Financial crisis realigns consumer spending
19 January, 2009
– As the global economic downturn starts making itself felt in the consumer sector, Western fast-food restaurants and the tourism industry are poised to suffer major losses. A survey of Chinese consumers indicates that they cut back spending on these and other luxury purchases as well as on high-risk investments.
This survey - conducted jointly by a leading market research company, Millward Brown, and a global data solutions provider, Lightspeed Research–interviewed numerous consumers across China. According to the data collected, 78% of Chinese customers have felt some impact from the financial crisis and middle-class consumers in the 19 to 45 age group are feeling the most pressure. Compared with other provinces, consumers in more industrial-based economies like Guangdong and Zhejiang have been hit particularly hard.
Accordingly, consumers plan to respond by cutting back on the inessentials. Among the “Top 10 Least Affected categories”, household products, food and personal hygiene products comprise the top three. Consumers will try to keep maintain their standard of living by focusing on daily necessities. Interestingly, though, mobile phones were one category in which will be least affected.
In such economic environments, marketing becomes more difficult, but not impossible. Jason Spencer, the managing director of Millward Brown-ACSR’s Shanghai office, says, “Differentiation one’s brand from the competition still plays an essential role in securing a greater market share. First of all, marketers should impress upon the consumers’ minds that their products are daily essential products that should be considered “needs” not “wants”. Secondly, don’t blindly slash prices for promotions. Control the prices and keep them at optimal levels by introducing bulk “value pack” or smaller packages.” Additionally, Spencer advices companies to continue communicating your brand’s key messages or it will greatly damage your brand in the long term.
David Zhao, managing director of leading communication consulting firm Hill & Knowlton’s Shanghai office, believes that communication is essential for companies and their brands. Creativity is another key component in differentiating yourself from the competition during an economic crisis. The most innovative and ultimately successful strategies are often inspired by adversity. Bold companies that are unafraid to try something new are those most likely to become industry leaders after the recession. For further information please contact:
Group Account Director, Millward Brown - ACSR
+86 21 2321 3300 - 3318 Yeemei.firstname.lastname@example.org About Millward Brown - ACSR
Millward Brown, a global leader in marketing research, is well known for pioneering many of the industry's most innovative research methodologies and techniques to assess and track advertising and brand performance.
Recognised as a leading authority in advertising, marketing communications, media and brand equity, Millward Brown is a valued adviser to leading marketers throughout the world. Millward Brown offers a full qualitative and quantitative research service in 48 countries working across a wide range of industries and categories. We help companies understand consumer demand and drive their brands and services forward at local, national and global levels.
Our commitment to innovation is grounded in an extensive research and development programme, robust validation, and an unrivalled knowledge management system. About Hill & Knowlton
Hill & Knowlton, Inc. is a leading international communications consultancy, providing services to local, multinational and global clients. The firm is headquartered in New York, with 73 offices in 41 countries, as well as an extensive associate network. The agency is part of WPP, one of the world's largest communications services groups.