Mark Price

BrainTrust Query: Dropping the Floor, Raising the Roof, and Recalibrating the Brand Continuum

December 20, 2011

FROM RETAILWIRE:
Tough markets call for tough measures and everything is a race to the bottom. But as Walmart takes pains to buttress its low price floor, it is simultaneously raising the roof by adding a tier of higher-priced items that push historic limits in select categories. How should national and licensed brands approach retail's increasingly bifurcated pricing strategies?      [more...]

Remember that the changes we are seeing in customer behavior reflect a general average customer -- one that does not exist. Customers are not averages -- they represent specific combinations of preferences by category.

The key to surviving in this environment is to focus on building and reinforcing values with the right customer segments. You cannot market the same to everyone -- channel preferences permit you to more narrowly target the right customers and measure the impact.

By targeting the right customers for retention (the 20% that comprise 80% of your volume), marketers can retain their value in the face of retailer pressure to cut prices, reduce margins and succumb to commoditization.