Your marketing role and the cost of petrol

It’s a sad comment on our political leaders that the debate on petrol pricing has been so woeful.

However, that’s just my opinion and that is not important. The critical thing is that consumers are concerned about petrol. And how will that affect us as marketers?

We all know there is lots of whining going on. And for good reason. For many people, petrol at $1.60 per litre, is lifestyle-changing. (Not to mention what $2.50 might do in a year’s time).

As marketers, we have to be alert to what petrol prices mean for consumer buying habits? And how will the agencies that market consumer products be impacted?

Whenever consumers are feeling the finch, that’s important for marketers.All the information to hand seems to be indicating that consumers on tight budgets are being forced to make cuts.

Many readers of The Scoop will have already noticed that in the US last Friday Sears, Roebuck reported a $56 million loss for the quarter ended 3 May. That was surprisingly bad, even taking into account the steep drop in earnings that had already been forecast.

In Australia, last Saturday The Age reported that new applications for consumer loans have all but dried up. Whether that’s because of higher interest rates or petrol prices, who knows?

From anecdotal evidence everywhere, it seems that in mid 2008, people are:

• Eating out at restaurants less often.
• Buying less clothing, or shopping at discount retailers to save money.
• Taking public transportation more often or riding or walking to work/school.
• Developing an overall mentality to cut spending.\

This sort of behaviour has to very soon trigger an impact on marketers.

For consumer brands, more advertising dollars will be refocused on value brands. In many sectors, the price points on products from airfares to chemicals will soar as a result of higher energy costs. And lower profits will mean every vendor relationship will come under greater scrutiny.

Marketers and ad agencies of all sizes need to be more proactive in understanding the changing consumer mindset.

Marketing communications messages that motivated buyers even six months ago may need to be different today. Increasingly, people are becoming more worried about feeding their families, getting to work and paying their rising bills.

Agencies must empathise with consumers and appeal to their immediate needs. Marketers need to be out there talking to people and pouring through current research and interpreting it carefully.
Higher petrol prices seem set to be a way of life now for as long as oil supplies last. That does not make anyone happy. But, as marketers, we can do something about it, in our own little way. Time to listen more carefully to consumers and clients. Time to innovate more often. Maybe it’s time to ride a bike to work.

You can get a FREE copy of a 12-page PDF on “Direct Marketing Foundations”, written by Frank Chamberlin.