Rather than just trading down, some consumers are saving money by opting out of certain categories altogether. For brands, this means the competitive set is getting broader: It’s no longer just brand vs. brand (e.g., Bally’s vs. New York Sports Club), it may also be category vs. category (Bally’s vs. cable TV).
Since brands may be competing for share of purse along with share of market, marketers have to sell the category as aggressively as the brand. Last week, Guy Murphy offered an example of this—a U.K. ferry operator promoting the travel category.
Microsoft’s latest campaign, “People Ready,” is another example: It sells the idea of software as a tool that can save businesses money. For instance, the TV spot here doesn’t tout specific Microsoft products but rather explains how technology can help businesses thrive, despite the “economic tsunami.”
Considering that Forrester Research forecasts that business and government purchases of IT goods and services will decrease by 3.1 percent in 2009 (compare that to a 7 percent rise in 2007), now is the time for Microsoft to promote not just itself but the benefits of investing in IT. This campaign does it right.
One of the effects of any recession is a shift toward short-term thinking, with many people concerned mostly about surviving the immediate future. This has manifested itself in various ways and is currently emerging in the arena of B2B services in Israel. With many businesses having to let go of employees, buying software licenses does not seem cost-efficient. So Microsoft in Israel is now offering businesses software rentals. Microsoft’s communications stress the cost savings, the greater flexibility in terms of payment and number of software licenses, and the peace of mind this option provides. Companies that need to cut staff can do so without large sunken costs and can then re-expand with ease.
