You are familiar with the term from Baseball but how does it describe a key demographic for any media property...Baby Boomers? Adweek describes how "Boomers Caught In Squeeze Play" and what it will mean for your clients down the line....
"Already there are signs of that change. In one of the most dramatic reversals in post-World War II history, Americans -- who in recent years have had negative savings rate -- are expected to flip those patterns, with Goldman Sachs now saying the U.S. savings rate could be as high as 6 percent to 10 percent this year."
That's a big deal for a population and economies that gets over half of its spending from Baby Boomers. Those changes are being seen across the board by your clients....
"Ben Kline, chief strategy officer at Allstate agency Leo Burnett, says that for consumers it's not just a matter of cutting back, it's about their reassessing what's important.
"We're seeing a shift from a trade-up culture to a trade-off culture," he explains. "'What brands are going to be part of my life, which ones are indispensable or dispensable?' Value alone is not a differentiator; there will be value or there won't be a sale. Marketers will do well in understanding how to frame the trade off and reintroduce themselves."
Kline, whose agency works for McDonald's, adds: "The 'apex predators' of categories that didn't add enough value as consumers traded up are going to be in trouble. People are realizing they don't need a $4 latte; $4 goes further at McDonald's."
Which may go some way in explaining the disparate results of the two iconic brands: In the fiscal fourth quarter, ended Sept. 28, Starbucks reported a 96 percent drop in quarterly earnings growth while McDonald's reported an 11 percent increase in its Sept. 30th third quarter. The definition of value may have less to do with increased unit sales and more with actual consumer benefits.
"In the industrial era, we were good at creating perceived value. But now people are getting back to basics and the future of marketing is to create real value," says Haque of Havas' Media Lab. "Perceived value is for consumers; real value is for people. Perceived value is about how much can we get people to consume and that is patently at odds with the new realities of the economy. Real value delivers long-term outcomes, making people smarter, better off, healthier."
As consumers shuffle what a "need" is and what value they place upon that "need", we need to be right there with our clients helping them to continue to grab thier market share. A couple of examples I liked in the article that were effective that you can use with your own clients...
"Last month, for instance, a Seattle McDonald's franchise operator taunted Starbucks in its hometown with billboards proclaiming: "Large is the new grande" and "Four bucks is dumb." In its fourth-quarter pitch, De Beers positioned diamonds as something to be passed down among generations in a world of "disposable distractions." Whether bling-seeking consumers buy into copy like "here's to less," the sentiments seem to sum up the larger mood of the country."