Marketing from the Grocery Aisles: Upgrade or Retain?

Recently, during an email exchange with a client, Windows XP was mentioned. My first thought was surely no one is still using that old operation system. “Why create a marketing campaign to encourage people and companies to upgrade?”

I was wrong.

According to Net Application, which tracks the usage of web browsers and operating systems, in January, Windows XP market share was 39.5%. However, with extended support for the operation system ending April 8, 2014, there’s an urgent need to nudge users to upgrade.

Introduced in late 2001, Windows XP was rapidly adopted with over 400 million copies purchased five year later. With an estimated installed base of over 1 billion copies of all Windows operating systems, there could be around 300,000 copies of Windows XP currently in use.

The question becomes, with snazzy, highly intuitive operating systems like Windows 7 and Windows 8 readily available, why are consumers and businesses hesitant to upgrade? The answers are as varied as the grains of sand on a beach. I suspect users are fearful they’ll jeopardize losing data. After all, Windows XP is used on personal computers (PC) – desktops, laptops, and media centers.

On these systems is content ranging from photos and videos to tax and financial records, correspondence and emails, resumes, school work, drawings, music, and much, much more. A computer malfunction can be devastated.

Windows xp_3For companies, migrating to another operating system puts in peril financial, accounting, sales, human resources, contractual, and many other vital records if there’s a delay in getting their PCs correctly backed up and ready to run again.

Another reason to put off migrating off Windows XP is there isn’t a pressing need. While users recognize their applications would run faster and they will be able to do significantly more with newer systems, there no urgency or perhaps, limited budget. Consider people using Windows XP in developing countries where having a computer is a luxury, even if the functionality is subpar.

The concept of upgrading isn’t limited to computers and electronics. The choice to upgrade – whether a car, house, clothing, travel, hotels, and more – is often tied to prestige, performance, preference, and more commonly, price. .

From a grocery store point-of-view, it’s moving up from ground round to top sirloin, canned tuna to ahi, American cheese to aged cheddar, canned mushrooms to fresh shitake, and boxed to vintage wines. Even though food in America is very affordable and available — compared to the rest of the world — price and preference are the typically motivators.

The decision to upgrade ones car is more complex. For some people, prestige is the overriding inducement for investing in a luxury or sports car, truck or SUV, such as Jaguar, Corvette, Dodge Ram or Suburban. For others, performance is paramount. Another group might have lots of money, but economy and ecology is foremost in their minds. This group would consider a Toyota Prius, Honda Insight, or Smart.

Price is the overriding factor for people earning low wages with new 2013 cars costing at least $14,000 – a Kia Rio is $13,600, Ford Fiesta $14,500, and Dodge Dart $16,000. For this group, used cars are more attractive. Nevertheless, the same drivers of prestige, performance, and preference come into play.

Kraft Macaroni & CheeseBecause of the cost of housing, people looking to upgrade their living arrangements are primarily motivated by price, and not prestige, performance (niceties), or preference (location). The collapse of the house market is partially linked to people purchasing house they couldn’t afford, which offered prestige, performance, and preference.

Clothing and shoes are predominantly tied to preference, price, and prestige with a dash of performance for sportswear, outwear, and athletic shoes. If you live in North Dakota, a heavy jacket that repeals water, ice, and snow is more important than whether it’s stylish and the latest fashion color.

Returning to the original premise of Windows XP, and why people choose not to upgrade. If there isn’t a pressing need, many people will opt to stick with the same products and services. In a sense, there’s nothing wrong with finding satisfaction with something, and sticking to it for the long-run. Isn’t that the concept of brand loyalty?

If a person is happy with Kraft Macaroni & Cheese, and consistently purchases box-after-box, year-after-year, isn’t that better than their lamenting the higher cost of Kraft Deluxe Macaroni and Cheese Dinner, which costs twice as much, resulting in their purchasing considerably fewer boxes? Kraft Deluxe Macaroni and Cheese

Obviously, for big ticket items like electronics, cars, and houses (and operating systems), any purchase, whether the same value or upgrade is desirable. However, for lower-priced items, even airfare and travel accommodations, it might be more advantage to encourage consistency in choice if it means the consumer purchases more over time than to push the need to upgrade, which could suppress repeat purchases.

What are your thoughts?

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