Marketing during Recession

"Companies that have been looking at marketing as an investment, and not an expense, and have been running their business through customer knowledge are the ones that are going to come out of this [recession] really, really well."

Three common thngs one need to do marketing in this situation are:
1. Value Marketing: Knowledge of how to do it.
2. Confidence: Company culture to do it
3. Money: Offcourse without which you cannot do it, rt?

Example of value marketing during earlier recession kind of situation: Intel launching “Intel Inside” during the 1990-1991 recession.

As per the Harvard Business School professor John Quelch-Companies should bear eight factors in mind when making their marketing plans for 2008 and 2009:

1. Research the customer: Instead of cutting the market research budget, you need to know more than ever how consumers are redefining value and responding to the recession. Price elasticity curves are changing.

2. Focus on family values

3. Maintain marketing spending: It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times.

4. Adjust product portfolios

5. Support distributors: In uncertain times, no one wants to tie up working capital in excess inventories. Early-buy allowances, extended financing, and generous return policies motivate distributors to stock your full product line

6. Adjust pricing tactics. Customers will be shopping around for the best deals. You do not necessarily have to cut list prices, but you may need to offer more temporary price promotions, reduce thresholds for quantity discounts, extend credit to long-standing customers, and price smaller pack sizes more aggressively. In tough times, price cuts attract more consumer support than promotions such as sweepstakes and mail-in offers.

7. Stress market share

8. Emphasize core values. Although most companies are making employees redundant, chief executives can cement the loyalty of those who remain by assuring employees that the company has survived difficult times before, maintaining quality rather than cutting corners, and servicing existing customers rather than trying to be all things to all people.

The most likely route or the most-effective route one can take is to have a judicious mix of advertising, direct marketing, public relations and channel relations depending on the kind of customer one targets. Reducing the budget below a threshold level will prove to be counter productive and can actually favour competition by giving them a clear run of the market.

While there have been differences interms of opinion on the approach to be taken and components of that approach one aspect all the executives agreed on is that slowdown presents an excellent opportunity to showcase one’s offering in a cost-effective and focused manner using tools like PR, direct marketing and focused advertising, so that the brand is ready for the upswing when the recession is over