Do brands matter during a recession?

[marine ices]

  http://www.youtube.com/watch?v=OoFRu_9_7YQ

  not sure I agree with his first point; I think in many cases a brand's image permeates its product(s)

[costargh]

As part of my essay on environmental concerns in management, I found an article which basically said that in tough economic times, consumers choose the cheapest alternative (as opposed to buying a more environmentally friendly brand for the intangible benefits).

[Eriny]

It still matters to the people who can afford them. A recession seems to be a great time to flaunt your richness (if you have it).

[Collin Li]

As part of my essay on environmental concerns in management, I found an article which basically said that in tough economic times, consumers choose the cheapest alternative (as opposed to buying a more environmentally friendly brand for the intangible benefits).

True - it ties in with behavioural economics results which suggest that people can be irrational about sunk costs (more apparent than they should be) and opportunity costs (less apparent than they should be), unless it hurts.

Slogans like 'if it ain't broke, don't fix it' are sometimes misused to capture the psyche of the individual who forgets about opportunity costs.

The economist would go: 'if it ain't broke, don't fix it; unless the opportunity cost of not fixing it exceeds the benefit derived from fixing it'.

This is why economists sometimes say recessions clear out the inefficient firms, only leaving behind the cream of the crop behind. Recessions are Darwinian events which truly test which firms have been acting efficiently. It's only in the hard times that we can see who is really the strongest.