Mark Ritson: A new era – accessibility now trumps being premium

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If you were ever in need of evidence of the fundamental ignorance of much of the business community, it was widely on display at the start of this month when Apple launched its new iPhone 4S. Usually awed critics suddenly started to mouth their concerns with reviews ranging from “lacklustre” and “under-whelming” to “a very shaky start”. Even Apple’s usually mercurial share price took a temporary hit, dropping 5% on launch day.

The new iPhone might be little more than an incremental advance at best, but the anti-Apple mob missed the point. Instead of looking at the head, they should have been checking out the tail. In all the hullabaloo about its new product, most ignored what Apple also elected to do with its old ones. Rather than an almost immediate phase out, Apple opted to keep both the iPhone 4 and the now two-year-old iPhone 3GS in the market at bargain basement prices.

Apple is embracing a trend that many other organisations would do well to follow – accessibilisation. OK, I just made that word up. But trust me it’s a useful one nonetheless for the difficult years ahead for marketers.

Everyone is aware of the recession engulfing the UK. But while most marketers have grasped the depth of the current economic malaise, few appreciate the length of time it is probably going to take for our consumer economy to return to anything like its former self. Many economists now estimate it will be more than a decade before Western Europe can once again glimpse blue skies. The traditional, temporary strategies that enabled brands to survive the shorter recessions of the past are not going to work this time.

We must learn not to reach for the stars but rather to drop the ladder of accessibility

And it is with this longer, gloomier timeframe in mind that I suggest accessibilisation is the new order of the day. I agree it’s a clumsy word but it’s the best one I can find to represent the opposite of premiumisation.

You remember premiumisation of course? That was what marketers did until 2008 before the world economy turned to custard. Brands discovered that a growing army of consumers were more than happy to trade up for higher priced, better made, more limited edition versions of the products they had originally consumed in less distinguished, more accessible form.

Big players like Diageo and Cadbury spotted the trend early and prospered with new boutique products that came with significantly higher price points. Where once we ate Dairy Milk, we now craved Green & Black’s. The market became engulfed with ridiculously premiumised offerings like Renova’s luxury black toilet paper, Porsche baby strollers and Tasmanian rainwater that cost £200 a bottle. As the New York Times put it back in the glory days of early 2008: “Companies had to premiumize or die.”

That era is not over. Not completely. There remains a tribe of well-to-do, recession-proof rich people who continue to seek out premium goods. But the masses are now pulling back in the face of rising unemployment and growing economic gloom. And for these consumers we must learn not to reach for the stars but rather to drop the ladder of accessibility.

Hence Apple’s new strategy. They don’t care about the tech wizards and the rich executives that will pay anything for the latest Apple product – at least not for now. They want the other 95% of the market who don’t yet own an iPhone and would buy one if they became cheaper. As Shaw Wu, one of the few analysts who actually got it right, put it: “The big knock on Apple stock has been that it doesn’t have a low-end and mid-range strategy. Well now it does”.

The same trend was evident last month at Fashion Week in Italy. The fashion industry is always a season ahead of the rest of us and it is already anticipating a horrendous 2012. But rather than taking it on the chintz, fashion houses are already making the right accessibilisation moves. Second lines like D&G and Just Cavalli are getting more attention and being moved closer to their premium sister brands Dolce & Gabbana and Roberto Cavalli for example. Most of the top brands at Milan were cutting back on costs and widening their entry level offers.

US car makers are also dropping the ladder. US Today recently reported that the likes of VW, Chevrolet and Chrysler are cutting back on product frills to enable their vehicles to open at even lower price points. Nissan, for example, is currently promoting its new Murano CrossCabriolet for only $44,540 – a lower than expected price because extras like its satnav are now being offered as incremental extras. In the age of accessibilisation, anything that gets you down that ladder should be considered.

As a marketer caught between one era and another, your challenge is to change stroke mid-paddle. From a focus on limited editions you have to start thinking a single mass offering. From justifying your price premium, you now have to find ways to cut back product costs to enable you to price lower. Where once you looked up, you must now adjust your gaze downwards. The age of accessibilisation is upon us.

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