Recessions Breed Cannibals

Cannibalism is always a temptation for brand managers. Brand cannibalism (at least for most people....). Who among us hasn't been tempted by an opportunity to make some quick gains by going against the brand we're charged with upholding? The problem with this is that each time we seize one of those opportunities, we eat just a little bit of our own brand.

When times are tough, making money and maintaining cash flow becomes more important then ever. Believe me, I understand that. There is, however, the consideration of short term gains versus long term sustainability of your brand. If you offer an incredible discount on your service or product in order to generate some much-needed cashflow, how can you expect customers to pay full price again once the economy recovers?

The danger of cannibilizing your brand for these short gains is that if you do it too much or too often, the brand cannot recover. A good example of this is what Starbucks is doing right now with their introduction of instant coffee to their product line (if you've listened to our interview on Marketplace Morning Edition, this might sound familiar). Starbucks is headed down a dangerous path that will forever cheapen their brand: lower quality products in an attempt to appease a wider audience and combat competition from McDonald's. The result of this will either be lower prices and thus lower quality, or an abandonment of the brand by once-loyal customers.

In the real world, however, I know that this may seem impractical. When you need cash, you need cash, and sometimes it's impossible to say no to a deal, no matter its inconsistency with your brand. If an opportunity like this comes up, try to look at all angles and see if you can't find a way to at least partially align the deal with your brand. For example, if you have to slash a price, try to make the product comparable to that cut--a scaled down or reduced version, so at least the buyer understands that they aren't getting steak at hamburger prices.