Understanding Consumer Recession Psychology
In this month’s Harvard Business Review (HBR), John A. Quelch and Katherine E. Joez published an article titled “How to Market In A Downturn“. By studying the marketing success and failures of dozens of companies navigating recessions starting in the 1970s to present, Quelch and Joez identified pattern’s of consumers’ behaviors and firms’ strategies that either propelled or undermined performance. Specifically, they uncovered that firm’s who understand consumer’s recession psychology and fine-tune marketing effort’s and product portfolios accordingly are the most likely to prosper through a recession and long afterward.
Quelch and Joez believe marketers need to re-visit their current attitudinal and behavioral marketing segmentation schemes and consider understanding the needs of their customers in light of the most severe recession this country has ever seen since the Great Depression. Corporate scandals; failures in the financial, housing, insurance, and automotive sectors; taxpayer bailouts, etc. have all had a profound effect on consumers and their buying behavior. By dividing customers into fou…