Inflation? Brands need empathy and consumer understanding

Analysis from Kantar BrandZ, and from our experience of tracking brands since the 1970s, shows how brands can keep winning during periods of inflation.

Inflation worries consumers because their income won’t buy as much. It worries businesses because it squeezes their margins. The first thing to recognise is that brands cannot promote their way out of trouble. Starting a price war erodes margins faster, re-educates consumers about where the price point should be in a category, and immediately destroys value.

Marketers need to understand a brand’s specific situation. Brands exist because they allow a business to command a higher price point than an unbranded product. As inflation bites, you need to protect that margin. You can measure the strength of a brand’s ability to do this by comparing the relative price the consumer sees for your offering against the breadth and depth of their positive perceptions: we call this measure Premium, based on how meaningfully different a brand is in the mind of the consumer.

This article was published exclusively on on March 22, 2022.