Consumer Psychology in a Recession

This is an intelligent analysis of consumer psychology during a recession by John Quelch, Professor at Harvard Business School. Particularly interesting are Quelch's thoughts on opportunities for marketers beginning around 8:10.

Key take-aways:

• Pre-recession segmentation is in effect obsolete; companies need to re-frame their segmentation approach given the new economic situations
• Four consumer archetypes have emerge: 1.) "Slam On the Break" - most affected resulting in only purchasing bear essentials, 2.) "Pained but Patient" - also affected and may restrict spending but they are positive and believe economy will improve , 3.) "Live for Today" - young consumers likely not severly impacted yet by economy due to lack of investments, thus they are still following same purchasing patterns, 4.) "Comfortably Well" - well-off OR shielded from economic downturn and thus little impact on their patterns.
• Cash-rich companies should maintain or increase marketing activities, as many cash-stripped companies will be pulling back efforts, making it cheaper to gain market share for cash-rich companies
• Consumer demand for new products that add value to their lives remains; companies should not cut product development but rather focus it to ensure they are delivering the best product possible.