If you can't convice them, confuse them...

In the market with umpteen me-too products and brands marketers have few choices with how to develop, maintain and enhance relationships with their customers. The situation is worsened with multiplicity of communication channels including online (internet based) marketing and offline marketing and advertising.

The increasing pace of media innovations is hard to keep up with. Added to that, marketers hardly know what is the ROI on most communication mix (advertising, sales promotions, direct marketing and others) avenues. Therefore it becomes further difficult for marketers to balance and achieve the targets on their communications budget.

When facing such market reality, the marketers are left with two real choices:

1. Convince the consumers; or
2. Confuse the consumers

The convincing part requires increasing effort to develop and maintain because of the market complexities and therefore many marketers are driving their skills and organizational resources in confusion the consumers.

For example, if you wish to buy a mobile phone have a look at what happens?

You have more than:
a) six - ten mobile phone service operators (depending on the country)
b) twenty different mobile phone brands (with increasing numbers every year)
c) thousand different price plans
d) thousand different mobile phones types (with phenomenal number of features)

The marketers claim that this choice provides consumers with the freedom. However, in one of their seminal papers Simonson and Tversky( 1992) claimed that consumers hardly can judge and value the products they choose.

In case of such product choices (i.e. mobile phones) instead of freedom the overchoice creates consumer confusion.

The case of confusion exists in almost every product we purchase in today's marketplace.

So, the revised adage for today's marketplace seems to be Confuse them and confuse them more...

In the coming posts, I shall focus on the concept of consumer confusion and how it affects our choice process. I shall also focus on managerial implications of consumer confusion and how managers can avoid causing confusion.

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Luxury marketing: adapting value propositions

How do you convince a consumer to buy luxury products?

This is one of the very important questions asked by managers involved in marketing luxury goods. Luxury consumption - especially one related to conspicuousness - seem to have changed dramatically in the last few months with consumers clearly avoiding any conscious attempt to signal wealth.

Many observers have pointed to consumers' attempt of avoidance stating the term 'discreet consumption'; 'stealth consumption' and so on. While the phenomenon is observed all around the important question is 'why are the luxury consumers behaving in this particular manner?' In consumer research terms we may ask, 'what is the underlying motivation for this discreet or stealth luxury consumption among consumers?'

One of the major reasons may lie in the changing socio-psychological context and the value perceptions associated with luxury consumption.

In troubled times we humans have an increasing tendency to become more socially conscious. In such times our tendency to empathize may increase substantially and therefore our consumption may reflect this reality too. This empathizing may lead to consumption of less conspicuous products. This could affect many product categories including luxury automobiles, handbags, glasses etc. where the brand message is directly on display. For example, it has been recently reported that the best-selling luxury car brand sales in the U.S. fell 37% in the first quarter of 2009, led by a drop in demand for the most expensive models. The Lexus sales in the US decreased by 27% over the last year.

While the decreasing sales is a reaility of reduction in luxury consumption, one has to remember that there are two major underlying needs among consumers relating to consumption (including luxury consumption); (1) Need for conformity (i.e. to conform to the existing societal norms) and (2) need for uniqueness (i.e. to be unique enough so one can differentiate from others). These two needs are extremely important when focusing on luxury consumption and luxury marketing.

The first kind is need (conformity) is reflected in this decreasing conspicuous consumption. Consumers in such tougher times would not like to be seen as aggressively snobbish and therefore ostentatious behaviour and conspicuous public display will be avoided. However, the other innate need (uniqueness) behind consumption is what drives luxury consumption in today's conditions. Luxury products, according to most consumers, are unique from various perspectives including quality, price, brand image, pleasure and so on.

Therefore, managers will have to change their core message and value proposition to reflect the market conditions and consumer motivations. The question which managers need to ask is what is the value proposition in the present circumstances most of my consumers are looking for and how can I develop and convey a message which reflects consumers' reality rather than brands own reality.

Other interesting blog posts:
http://pauravshukla.blogspot.com/2008/07/luxury-consumption-will-it-really-be.html
http://pauravshukla.blogspot.com/2008/08/managing-luxury-brands-in-recession.html
http://pauravshukla.blogspot.com/2008/03/middle-aged-consumers-conspicuous.html

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