Are You Luxury or Premium?

One of the benefits of this recession, and there will be a few of them, is the differentiation between luxury and premium.

Luxury is expensive just to be expensive.

Premium is quality goods made with quality products.

Which one has the better value?

The companies that have been positioning themselves as luxury are realizing the error of their ways. There is no perceived value in a product that is perceived as luxury.

Luxury is haute couture. Premium is custom made.

Look around. We spoil ourselves when we think the product is premium. But the days of buying a product just because it is the most expensive is not longer an option. No matter which tax bracket you are in, there has to be perceived value.

Jaci Russo

Sr. Partner

The Russo Group

photo by ExploreLuxury

Are You Cheap Enough?

Back in December, I wrote about the difference between Relational and Transactional customers.

Specifically discussing Best Buy's successful efforts to re-engineer their operations, process, advertising, sales training and even store layout to attract more relational customers and to actually deter transactional customers.  I believe that is why they have ridden out the economic downturn so much better than Circuit City was able to.  Their brand was strengthened by the relational customers that they attracted and they weren't caught in a price war that diminished value.

When the following appeared today with Roy Williams' thoughts on relational v. transactional and how the shifting economy is shifting our approach to purchases, I had to read it twice to see if I agreed with him. 

I do agree that most consumers have shifted to a transactional mode of thinking for products that used to be purely relational.  However, the consumer is not simply buying the cheapest price, there is still a relational tendency at play.  I would hazard a guess that the average consumer is still willing to spend a little more for a product that they think can provide the best value, even if it isn't the cheapest price.  Value is the focus now.

What do you think?

Please click the link below to read his article in its entirety...

The New Magic of the Wizard of Ads

by Roy Williams

A high percentage of relational customers have shifted to a transactional frame of mind.

In other words, the rules of marketing are changing.

The buying mode and mood of the general public has moved from Intuitive and Feeling (NF, right brain/right brain, pattern recognition) to Sensing and Thinking (ST, left brain/left brain, sequential reasoning.) Frosted Frank, not Monet, will win the heart today. Abandon fuzzy angles of approach. Be direct, clear, concise. Clarity is more important than creativity. But it’s also more difficult to achieve.

Ad writers, you’re going to have to work harder than ever but so are your clients.

Money is tight.
Unemployment is rising.
People aren't shopping.
Traffic is King.

Click for FULL STORY