What is a disadvantage of a trading-down strategy?

A trading-down strategy involves a brand introducing a lower-priced version of its products or services to attract a broader customer base. However, one significant disadvantage of this strategy is the potential damage to brand image.

When a premium brand offers a lower-cost alternative, it may dilute the perceived value and exclusivity of the brand in the eyes of existing customers. This can lead to confusion about what the brand stands for and could result in the brand being associated with lower quality in consumers' minds. The established reputation that a brand may have built over time for delivering high-quality, luxury, or premium products can be compromised, resulting in a negative impact on customer loyalty and brand equity.

On the other hand, the options that involve increased sales volume, enhanced customer attraction, and improved market competitiveness generally describe potential benefits of a trading-down strategy. While it's possible that the strategy might lead to higher sales and attract new customers, these positives do not outweigh the risk of jeopardizing the brand's established image, which is a critical aspect of long-term success in branding and marketing.