With rising unemployment and continuing turmoil on Wall Street many consumers are buying just the basics and are hunting for the lowest prices. What type of marketing strategy and communications are likely to resonate under the current conditions? During the Great Depression, Pepsi gained market share following the introduction in 1936 of a 12-ounce bottle. Initially priced at 10 cents, sales were slow, but when the price was slashed to five cents, sales increased substantially. A radio advertising campaign featured the jingle:
Pepsi-Cola hits the spot,
Twelve full ounces, that's a lot,
Twice as much for a nickel too.
Pepsi-Cola is the drink for you.
Pepsi encouraged cash-strapped consumers to switch, obliquely referring to the Coca-Cola standard of five cents for a six ounce bottle, instead of the 12 ounces Pepsi sold at the same price. Coming at a time of economic crisis, the campaign succeeded and from 1936 to 1938, Pepsi-Cola's profits doubled.
Would that strategy and messaging work today? I’ve been watching the new Best Buy holiday campaign with interest. The campaign includes TV spots and features true stories of how Best Buy touches its consumers' lives. In one ad, a Best Buy employee talks about selling a Webcam to a man whose grandchildren are moving abroad. The tag line for the campaign is "You, Happier." According to a recent article in the WSJ ("Designating Shortcuts to Happiness") marketing executives say this is a classic strategy during recessions, or after traumatic events. The idea is to break through to consumers who are being inundated by depressing news. However; the article also points out that this strategy has risks as presenting warmth and happiness when consumers are deeply concerned about their financial future can seem insensitive or obtuse.
When I was a teenager I remember interviewing my grandparents for a research paper I had to write on the Great Depression. My grandparents married in 1929 and were trying to scratch out a living on a small Iowa farm during that most difficult decade. I also recall them mentioning Pepsi during that interview. Looking back I find it interesting that Pepsi, not Coke, was the soda I remember finding in their refrigerator when I would visit them. I guess they remained loyal to Pepsi even after the crisis passed.
I don’t think it has to be an either / or situation (warmth vs. value). In fact, it may take a little of both to get us through this current mess. Would someone pass me some warm cookies and cold milk – at half price please?
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