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Dr Hermann Simon of Simon-Kucher argues for more positive strategic thinking as a way of increasing sales despite the gloom.
Against the wind - Part 2 | Part 1
How do customer preferences change? There is no general answer to that question. However, we have identified the following basic tendencies:
• The issue of security becomes more important. An airline that is not perceived to be a political target, for example, will lose fewer passengers and will not have to react to the crisis by lowering prices. As a matter of fact, it might even be able to increase them. The same applies for vacation destinations. Since the events which took place on 11 September 2001, the Spanish department of tourism is reporting new booking records. While lowering prices in politically volatile regions will hardly serve to attract tourists, a particularly safe country such as Spain might even get away with a price increase during a crisis. Price elasticity reacts asymmetrically to a crisis. Facts such as these have to be thoroughly analysed and understood in order to draw the right conclusions.
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International Consultants' Guide 2002
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Market Overview