Slashing prices equals devaluing your brand

I’m certainly one for grabbing great deals and watching for my favorite items to go on sale. I traditionally shop for brands that have good quality and value. Recently, I’ve been getting a barrage of email blasts from two or three of them about every third day, either offering 20 percent off or free shipping. Now, it’s one thing to receive these deals once, maybe twice. But I am receiving the same email deals, from the same companies, once or twice a week! So it makes me wonder – are these “excellent” brands really hurting during this tough economy? And if they’re offering deals and slashing prices, are they marking them up too much to begin with, or is the brand truly in trouble? In a recent study called Dollars & Consumer Sense 2009 from The Futures Company, results showed that the lowering the price of a product during a recession can actually harm your brand image long-term. But, those companies that held their prices during the downturn actually gained even more respect. In the study, 70% of the respondents said that “the brand is normally overpriced,” and 62% said that “the product is old, about to expire or about to be updated, and the company is trying to get rid of it to make room for the new stuff.” This was all in reaction to their perception when they see a brand slashing its price. On the flip side, 64% thought “the product is extremely popular” and another 64% thought that “the product is already a good value” when brands held their pricing. Just one more reason why NOT to cut prices during these tough economic times.

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