Tag: price

big freeze, big loss, big profits.

Mother nature was far from a Christmassy mood last December in Europe, impacting on our travels and our shopping sprees. Bearing in mind I’m living in London (the most dynamic hub of Europe, located in the North hence likely to be affected by bad weather), allow me to ask why this is happening for the second year in a row? Was our very own BoJo too busy launching his cycle scheme and starting a war with tube drivers? I mean is Helsinki airport closed half of the year? I hear you saying that the required equipments are costly, but aren’t they worth limiting the huge loss witnessed by our economy?

bigfreeze

We have learnt for the second time in a row that our economy – now more than ever weakened by the recession – does not like catching a cold. The impact of heavy snows around the UK almost feared some of a double dip recession, with numbers far from reassuring. Quite a logical assumption isn’t it? For starters, transport – that wasn’t at its best this year with terrorism fears, business travel restrictions, increasing oil charges and the Icelandic volcano eruptions – was a heavy loser of the Big Freeze. Construction was also badly hit, as well as high streets retailers (this happening on a key consumption period), agriculture, the entertainment sector, as well as energy (no doubt many of you worked from home all day with the heat on and a relaxing bubble bath break).

But was it really that bad for everyone? As BBC’s Anthony Reuben rightly discussed, it’s all about the point of view we stand by. For instance, UK airports surely had to hire more staff to handle the huge rush of people flooding their terminals – that’s giving temp’ jobs to those who didn’t have any at such a key period. Sales of cold weather gear also surely rose above expectations. Doctor’s appointments, garages for car repair, energy companies, salt mines, snowploughs drivers and you name it! One huge winner was the online sales sector. 25% rise year on year is just crazy, bearing in mind this sector will be winning even beyond that since it will have attracted first-time buyers who had mainly emotional barriers to purchase online (fear of data security, lack of familiarity with high technology etc…), and who now will form part of their productive databases. However it is not that simple. The fact that people were unable to move might have boosted online sales but the hard weather meant that deliveries could not be handled in time for Christmas, adding in yet another barrier to online shopping. There are also some interesting facts about the relation of consumers’ stress on price sensitivity in that “consumers experiencing higher stress levels will demonstrate a higher level of price sensitivity”, meaning marketers will have a tougher job in conveying value for their products.

Marketing is about understanding its environment to spot underlying opportunities. A problem means a solution just like a virus means an antidote – the trick is only to find it first and adapt quickly. A new situation means winners and losers. It also means losers can diversify to winners’ activities. The recession meant that people were less likely to have dinners in town, so Sainsbury and M&S started to launch appealing campaigns to show how you could make a great dinner at home with their grocery products. Again, it’s all about the point of view you stand by. After all, ask G.W. Bush what he thought of the 9.11 attacks.

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