Consumers Keep the Upper Hand

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"We try harder" is more than the motto of the No. 2 brands of the world. All brands have to work harder to get ahead today. Brands may be back, but only to the extent that they keep upping the ante to meet consumers' needs. The consumer is still king.

And it doesn't look like the equation is going to change anytime soon. According to our research, consumers haven't slacked off on their demands as the economy has improved. If anything, they've grown more demanding.

Consumers want more than a product that offers superior quality at a price as low or lower than the competition's-the arduous goal that marketers set about achieving in the first half of this decade through improving their internal efficiencies. Price and quality are an expectation now. Consumers want more: Longer warranties. Simple products and services. New technologies. Appealing design.

Compared with a few years ago, more and more consumers say almost everything is important in making decisions on durables. Roughly six in ten consumers now say that warranty and easy maintenance/repair are among the factors that are most important in their decisions on what brand of new car to buy-about the same number as say that price and quality are key. Style and looks are also up: Almost half of consumers rate them most important in a car.

"More" is the directive in other categories as well. Consumers want clothes to be comfortable and fashionable. They want homes to have modern conveniences and the style and grace of homes of the past-old-fashioned, wrap-around porches and enough wires for everyone's phone, Internet, and media needs. Computers need to deliver more power for less money and be ever-easier to use. Furniture must look good, feel good, and be easy to clean.

And there have been significant shifts. The percentage of the public saying that the "warranty or guarantee" is one of the most important factors in a new car, for example, has risen by 16 percentage points, to 64 percent, since 1993. "Easy maintenance and repair" in a new car has gone up by 15 points, to 61 percent, in the same period.

Those views carry across categories. The percentage of Americans who now say it's important that dress and work clothing be "low-priced in comparison with other brands" has increased by 11 points, to 46 percent, since 1993. For telephones, 37 percent say the warranties and guarantees are a key factor, up 9 points. In the home computer category, 30 percent of the public say that easy maintenance and repair is important, up 8 points from 1994.

Technology accelerates expectations. The Internet is fast becoming a mass medium. Going online is becoming a reflex, like reaching for the phone book. By our measures, about 48 million adult Americans have researched a product or service online. Some 14 million have purchased something online.

The dynamics that marketers woke up to in the early 1990s have not changed: Consumers are smarter. In 1960, only 41 percent of Americans aged 25 and older had completed four years of high school. Fewer than one in ten had completed four years of college. Today, more than eight in ten have finished high school. Almost half have attended college. More than one in four have had four or more years of college. They know more about how the marketplace works and how to get what they want. To paraphrase the old line, the consumer is not an idiot, she's your intellectual peer-or better.

Consumers are more self-reliant. They still need advice, but they're more confident about researching products and making decisions. The forces of the global economy, technology, deregulation, and entrepreneurialism give them an array of choices. If the old brands don't give them what they want, they'll just try something else.

Any downturn in the economy probably will not fundamentally change things. It's hard to envision consumers getting pushed out of the driver's seat. It could shift their emphasis. They could try to drive down prices to stretch their dollars. But they'd try to keep as much as they've won: good warranties, easy maintenance, better style, etc. Marketers, thus, should be ready to shift gears with the economy.

All this does not mean the value of brands has diminished. To the contrary: The efforts marketers have made in recent years are paying off. More consumers say they see a great deal of difference between brands in various categories. More say that when they find brands they like, they stick with them. Some brands are doing very well. Such brands-Microsoft, Coke, etc.-are "power brands" because they keep working to strengthen their connection to the consumer, continuously proving their worth through price-value, quality, innovation, and marketing, and, in turn, earning the consumer's trust.

One of the interesting things about this recovery is that price has not dropped out of the picture as things have gotten better. Although more consumers are recognizing the value of brands, the majority continue to say they "feel really satisfied, even excited" when they get a good deal and, in fact, they're a bit more likely to say so today than a few years ago. Similarly, most of the public-at about the same level as a few years ago-continue to say they "always try to buy things on sale."

"We try harder," thus, is not the motto of the No. 2 brands of the world: It's the earmark of No. 1.

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