BUDGET 2012: WHERE TO NOW?

The budget announcements have given us an idea of what we can expect to happen to our personal finances over the next 12 months, However from a brand owner perspective have you stopped to think about how this will affect your business & how you target consumers?

Money is tight & the budget will put a squeeze on all levels of income & those in all walks of life. The leak about the VAT increase gave many the time to assimilate its impact but for your brand this will have massive ramifications – price points, packaging, promotion & target market. All these factors can shift with the increase of 2%.

The Budget 2012 has taken a lot out of people before it has even been fully implemented yet there are still opportunities for brands to make a difference & to acquire new roles.

Providing treats, rewards & a helping hand to consumers over the next year is where brands can add value beyond price. For example, with health cuts being a prominent aspect of the budget announcement & with 80,000 people already dropping their private health insurance since 2008, highlighting your brands inherent health benefits could potentially provide more meaning to your brand than pre budget. Do you have the ability to unearth what matters to your consumers that your brand can deliver?

The budget doesn’t appear to offer incentives for consumers to spend money. On the flipside, for those saving money DIRT was increased 3% to 30% under the proviso it would encourage consumers to take money out of savings & spend. However, David Fennell a Tax Director with Ernst & Young said this “may instead be the final straw that motivates already nervous depositors to remove deposits from the Irish banking system.”

This leaves consumers and brands alike in a conundrum moving forward. It’s a confusing time for consumers – there are incentives available for first time buyers in the housing market & for those who bought between 2004-2008 yet for those first time buyers the question remains will they be able to secure a mortgage? Economists feel the move will help some households but not solve the property issue.

Brands need to realise that they need to play an even more meaningful & relevant role within consumers lives so that they can have a positive impact during these difficult times.