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On Travel: Lower Price vs. Higher Quality

Even in this economy, the cheaper option doesn’t always score high on preference measures.


Hi, I’m Cathy, an Analyst here at Cymfony.  I take the lead on technology clients, but with my marketing background in travel, I recently had the opportunity to work on a study for a travel client and came across an interesting angle on consumer sentiment towards price points. 

Anyone can tell you that consumers are becoming more price sensitive than ever in these economic times.  Across common goods and services, “budget” brands and wholesalers are gaining traction; “premium” brands are struggling.  In social media, positive sentiment is stronger for budget brands. “Value” is the most resonant discussion theme in message forums, indicating prioritization of cost over inherent product attributes.  

Does this mean all companies should work towards significantly lowering price points to compete in the marketplace?  The answer seems to be, “Not necessarily.  In social media, “premium” brands equated with high quality AND high price still trump “budget” brands when it comes to measures of consumer preference.  Looking closely at what people are saying, customers still strongly prefer a better product or a higher quality experience in spite of tough times compounding the price barrier.  While discussion suggest that the pragmatic mind gravitates to cost as a priority, many posts indicate that raw emotions crave goods and services of the highest quality.  Clearly, there is opportunity to tap emotions that are not “selling out” to cheaper alternatives.  

Consumers are price-watching across the board but have their eagle eyes on premium brands. Furthermore, conversations indicate that they are more keen on opening the wallet if they believe they are getting a sweet-ENED deal on a better product.  We see statements like “I’ve tried them.  It was more expensive but I had a good experience, so when there was a price drop, I immediately took advantage” or “I heard good things about them, so I’m just waiting for a discount.”  An itty bitty savings can potentially multiply desirability for a premium product (more so than a huge discount on a low end product) and push the consumer over the edge to close the sale. Savvy marketers believe this in their gut. Now social media analysis validates this belief in the voice of the consumer.

Posted by Cathy Buena on June 5, 2009 at 02:50 PM | Email this post Permalink

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