Back Seat Marketers

Even the top tier brands are beginning to feel the US consumer pinch.

To appreciate our situation, consumer sentiment is reaching long time lows (source: St. Louis Fed):

Value marketing isn’t about going for cheap, it is about getting more for less = benefits / price. Wal-Mart forged value merchandising into almost every consumer category they served in the last 15 years to the point where we can find a value proposition easily. In fact, Ikea’s entire marketing strategy is built on value propositions as opposed to cheap or luxury.

What happens when value consumers start to face headwind? A NYT article today on the Recession Diet provides MasterCard spending data on how people are narrowing ‘nice to have’ purchases back to smarter everyday purchases.

When looking at the drops in consumer sentiment, people’s lost confidence takes a couple years to recover. During times like these, people change behavior as a result of economics. These large macro shifts in behavior become prime times for new ideas and brands to take hold, especially in categories that have been over-innovated, or have been incrementally improved beyond consumer need (e.g. Honda in the 70’s v. the Big 3 auto makers).

With continued growth in consumer electronics, has the tech arena been over-innovating, or striving to meet mass consumer needs?