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Tuesday, March 8, 2011

Gas pains

Whether you’ve read the story that appeared in today’s USA Today about increasing interest in Hybrid vehicles, or this story from MSN that aired on the Today Show about the impact of oil on the price of everything (pre-roll required): The price of gas has resumed its influence on consumer behavior and sentiment.

Implications: From the size of the cars that might be on consumers’ consideration lists, to the number of stops they’re willing to make in order to grab everything on their shopping list… the price of gas affects more than just gas purchases. It impacts the price of the sofa, groceries, and even delivery pizza.

Lots of things are likely to go up, if fuel prices continue to rise. As a natural response, consumers are likely to cut back to compensate for this assault on their budget. But the question becomes, where, when, and how deep will they cut?

The answer depends on the value any company, product or service adds to the consumer’s life. (And again, I’m not talking about the price that is paid… but the benefit that is received in return.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

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