Marketing for Business Success in a Recession

in General Business Marketing

During the late 1920’s Kellogg and Post dominated the packaged cereal market.  Both companies were of similar size and market share.  Because packaged cereal was a relatively new market no one really knew what would happen to demand when the Depression hit.  Post followed the typical accounting management mindset and cut expenses including marketing and advertising.  Kellogg on the other hand made aggressive investments in marketing, advertising and new product development (Rice Krispies) and saw profits increase 30% during the Depression.  Kellogg became the all-time industry leader based on that strategy.

There are many other case studies and examples like this of companies seizing the opportunity to invest during an economic downturn to become the dominant player in their industry.  However, more companies act like Post, cutting back on marketing, advertising, R&D and other expenses to supposedly preserve what they have.  We see it again today in the 2008-?? recession that smart, market-driven companies are investing in marketing, R&D and making acquisitions at bargain prices.  Economic downturns have proven to be excellent times for launching new companies or product lines to take advantage of the market opportunities created by weak-minded companies retrenching from the market.

Deciding whether to retrench or invest during an economic downturn is tough.  Determining the risk of possible outcomes is always important, but economic downturns add uncertainty which cause more companies to rather cut back.  It’s a matter of short-term preservation versus long-term potential.

How to use this information to benefit your business

  • Recessions create unprecedented opportunities to seize market share from competitors.
  • As always, you need a solid business strategy to direct your investments in marketing and R&D.
  • When weaker companies or weak-minded companies scale back on marketing, it opens up more potential impact and better performance for your marketing campaigns.
  • Watch what your competitors are doing and seize the market opportunities they may create for you.  Don’t just focus on your largest competitors; this may be an ideal opportunity to take significant market share from multiple smaller or weaker competitors.
  • Internet marketing can give you “more bang for the buck” to seize opportunities during this recession and accelerate your business growth and profitability.
  • Reassess your marketing budget to determine which programs no longer produce effective results.
  • Use innovative social media technologies such as Blogs, Facebook, LinkedIn, Twitter, YouTube, etc. to do more with less marketing budget.
  • Many companies have seen great results from redirecting marketing budgets for trade shows, live seminars and other events to Internet and social media marketing programs.

While there may be some positive signs of an improving economy, many business still face tough economic and market conditions. Smart companies that make the right strategic investments in marketing, R&D and possible acquisitions will thrive during the downturn and take off like rockets when the economy improves and buyer confidence returns.
Copyright © 2009 Ingistics LLC and Marketance™ www.marketance.com

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