Tuesday, March 11, 2008

Economic Lifecycle

In class we had a discussion about brand loyalty and how people are affected by it. In my opinion brand loyalty is strongly affected by the economic cycle. No matter how strong a person is to a brand in times of recession or economic difficulty they will become switchers. Consider a person with moderate income, during good times he or she can probably buy expensive things like 7 jeans. But in recession, they will have no choice but to spend less in case something happens to their job. The point is, they are being forced to change and not whether they want to. It is at this point during economic turnmoil where unknown brands have a chance to shine. Since those brands are usually sold for less, people are willing to try them out and see their product quality. If they make an impression to the consumer then they might have a chance to incorporate potential customers. Recessions are always considered bad by companies because of the lack of sales and profit, but it can be a chance for an infant company to be taken noticed and rise to the top.