The Redefinition

of ValueWhat does value mean to today’s

consumer

A Presentation by: Anya C. Gonzales

How Does Your Brand Provide

Value?

Many Brands Do Not Know

Or Think That Value Only

Equals Money

This Mindset is Understandable

-Unemployment is still high at

7.6%

-58% of consumers are

budgeting more than they did in

the previous year, up 6% from 2

years ago

-19% of consumers follow a

strict weekly/ monthly budget for

clothing up 15% from July 2010

-28% of consumers follow a

strict monthly/weekly budget for

food as of Feb 2012 up from

23% in July 2010

BUT…

Simply offering discounts is

not enough

Why?

Consumers are

spoiled.

Let’s Look At

When They Changed Their Strategy

From

Frequent

Discounts

Everyday Low

Prices

Their Sales

Flopped!

Why

?

The Take-Away?

JC Penney created

the value of “a good

find”

Change of

strategy

What can we learn from JC Penney?

Brands need to find more

ways to offer value.

Value Can Stand For

• convenience

• being inexpensive by comparison

• greater choice

• peace of mind

• quality

• an amazing experience

CONVENIENCE

Which One Is Cheaper?

Consumers Pay More For Pods

Convenience Proof Points

Consumers are willing to pay more for this product because it gives them the value of convenience.

For the brand, Tide pods has generated $31 million in sales from the time it first appeared in March 2012 to June 2012.

For P&G, it's been a breakout hit that rocketed to $500 million in U.S. sales in only about a year

Which Room Looks Better?

PodsLiquid

INEXPENSIVE BY

COMPARISION

Addiction Central

The biggest legal addiction in the world is: Coffee

The Average American Spends $1000. Per

Year On Coffee

The Price of Coffee

-The average cup of coffee at a shop costs

$2.45

-Home-brewed coffee costs about .37 cents a

cup

-BUT, there is a middle ground

Keurig Cups

Cost = $1.00 a cup

Consumers want affordability and

indulgence

GREATER CHOICE

Which Brand Offers The Best Deal?

-MacDonald’s value menu only offers aboutten items for $1.00 = CHOICE

-Burger King offers a lot of options but theprices are high compared to other valuemenus = SAVINGS

-Wendy’s offers the most choice for the cost oftheir value menu items = CHOICE+SAVINGS

But Even Wendy’s Needed To Burn To

Learn

Start of year: They advertised

the value menus

Later on: They decreased

advertising but sales slowed

In the end: They returned to

promoting the value menu

Wendy’s Value Menu Offers

PEACE OF MIND

Have You Ever Been Late For Flight?

People Want Less Traumatic Air Travel

JetBlue’s Grab and Go Pack

-Base fare for 10 nonstop,

one-way flights

-You can book a flight up to 90

minutes before travel

-You can lock in on low ticket

fares for an extended period

of time.

Pay More Upfront but Get More Peace

of Mind

QUALITY

Let’s talk about Greek Yogurt

Greek yogurt is about

40¢ more than standard

yogurt

BUT

It Is the only growth driver

in the category.

Why Do Consumers Enjoy Greek

Yogurt

EXPERIENCE

Why Talk About Tasty Burger

-Consumers are dining out less

to save money

-Food service brands need to

find ways of offering

“something extra” that

consumers are not likely to find

at home.

-How? Through special event

nights or sponsoring a

celebrity chef etc.

Tasty Burger Offers An Experience

Food And Fun Creates An Experience

What Can We Learn?

Consumers are of two

minds:

They are more budget

conscious

BUT want to purchase

value-added products

What Are The Challenges and The

Opportunities

The challenge & opportunity:

Help consumers reconcile the

competing mindsets of wanting

to save in a shaky economy and

still wanting to indulge.

THANK YOU

Any Questions or Comments?