The Song Remains The Same

It now appears that two thirds of the stimulus bill will not impact the economy for two to three years. This is eerily reminiscent of Jimmy Carter’s stimulus bill. The maximum impact of Carter’s program hit three years into the administration. By that time, inflation and high interest rates were a larger concern than the unemployment rates that initially spurred the program.

Granted, a third of the current program will quickly aid the economy and we will begin to see growth later this year. Yes, the employment situation is dire and hopefully employment losses are at the bottom or very close to it. The real concern is what the impact of this spending will have on the economy in 12 to 18 months. Commodity prices went through the roof during most of 2009. CPG marketers looked for manufacturing and supply chain efficiencies to help combat the increases and we incurred significant amounts of package shrinkage (i.e. Shrinking the size of the package while maintaining prices).

Having a strong grasp of brand value, brand equity, and tying those values to pricing models will be absolutely critical for CPG marketers in the next few years. Increases in commodity prices will be back with a vengeance in a few years. Putting processes in place now to address these increases will pay huge dividends next year.