Posted by Milos Sugovic
Decoding and influencing the tastes of a thrifty consumer is the new corporate challenge as cost cutting becomes the new fad. But embracing the economic trends vis-à-vis public relations efforts means even Spam, the wannabe ham, can become irresistible to the media and consumers.
While Americans make trade-offs to cope with rising gasoline and food prices, frappuccinos and upscale fast-food are losing appeal. The rich are, in Amartya Sen’s words, “getting hungrier.”
So what’s on the plate for the belt-tightening recession diet? Spam!
Couple an economic downturn with inflationary pressure and suddenly inferior goods become staples. That’s why Hormel jumped on the opportunity with heavy promotions, advertising and media outreach.
Given the economic climate, the Spam-econometer flooded the media and, to no one’s surprise, sales shot up 10.6 percent. Hormel raised the price of Spam by about 7 percent, 3 percent above average food inflation, but that didn’t repel consumers. In fact, Hormel’s profits jumped 14 percent, likely buoyed by not just Spam sales, but upticks in its other inexpensive foods such as Hormel Chili and Dinty Moore beef stew.
Tough times create opportunities, and firms can use media outreach to make use of changing consumer expectations and preferences during an economic slowdown. Sometimes the hidden gems might be in a few cases of Spam.
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