Recession is here whether we want to accept that fact or not. Customers spending lowers, tertiary product prices gone up, massive financial institution layoff, undulating stock charts, and everything in between. So what should we, as a marketer has to do to face the crisis? The one thing big companies do when sales are down usually is to cut marketing budget outright, citing that sales makes the money, not advertising. Well, couldn’t be truer than that… Hell, as a marketing manager, I consider myself a second child to the product/sales manager as what they did is to sell products and create income for the company… Me? I’m spending that hard earned money to gain something that cannot be quantifiable in literal sense.
So what should we do? Well, I don’t know about you, but for me, its business as usual. Some seminars I attended about marketing cited that today is the best day to spend that marketing budget like crazy. Because everybody thinks just like what I wrote on the opening paragraph… Companies are afraid to spend money on unquantifiable things and are saving more for rainy days. That means, your competitors are likely to do the same. If your competitor cut their marketing spending, it means less noise on the market place now, so you can scream to your heart content in the middle of the market and net some considerable market share, at least if that market share doesn’t have the money to buy your product, you get some mind share and can reap the benefit at later date when the economy has recover.
However, maintaining that marketing budget is not the be all end all solution to maintain the needed market share today, especially in recession time. Customers just don’t have the money to spend, period. So rather than buying the unneeded tertiary products, people will opt to primary goods just to pass daily affairs. If you are let say… A fancy hair shampoo brand, you don’t spam advertising about fancy-all-natural-after-shower-anti-frizz-hair-conditioner-hair-coloring-combo, that costs a lot and is considered as tertiary product, you scale down and advertise about the basic necessity shampoo. At least you scale down the exposure level to that of your most mainstream product. It keeps your brand exposure level high enough with constant media frequency (if that marketing budget is maintained) and actually advertise something that people can still afford.
But what about companies that solely produce expensive tertiary products, like the automotive company? After all, car prices are going up especially for those countries which mainly import their products. Well, the mantra is still the same, you still burn that advertising budget, but with a little twist. You don’t allocate the entire budget into advertising, but move back a level and spend it on promotion mix level.
Remember the promotion mix? Advertising, Personal Selling, Public Relation and Promotion? Well, big companies often forget that a successful marketing campaign consists of all four of promotion mix elements. This is critical because when homogeneity is achieved especially as technology advances, there will be no more Honda’s i-VTEC, no more Toyota’s VVT-i, it would only be a car with variable valve timing technology. Thus, burning your marketing budget on expensive advertising about how advance your product is becoming a moot point. You can still advertise the expected perceived difference and market segmentation of your product, but not about its advancement anymore… Unless it’s very unique in a way no other competitor has something even remotely similar.
Then, you twist that marketing budget to leverage other key success factor of the company. Invest in Personal Selling, increase the training level and make sure that any people came in contact with your sales force immediately make your product as their point of reference. No need for sales to happen yet especially in this tough time, but do remember, for this to be successful you need to employ a super salesman. Spend on your Promotion, pull strategy is no longer working especially when dealers have exhausted their shared marketing budget. You push your marketing effort towards the customer, award your customers by buying your products with enticing yet attainable prizes… Not “buy a moose get (draw lottery ticket to get another) a moose“. It’s gambling! And not true marketing effort some say, and even I actually. Then, do some Publicity Stunt, make future customers literally fall in love with your company. In this tough time, nobody wants to part with their hard earned money especially to some jack ass company whose only purpose is to make their CEOs and owners fat. But if your company is the people’s company, giving out scholarship, increasing the livelihood of the surrounding community… People will literally threw money at you! Off course, there’s buzz marketing effect, do a perfect publicity stunt and watch how people will talk about your company and watch the the positive wind picking up.
Together, if you just came back towards your roots in the marketing front, I guarantee you will survive the crisis… Disclaimer: If your competitors doesn’t read this blog entry and have bigger marketing budget than you… All in all, just do that integrated marketing stuff marketing people are raving about nowadays.
And… You’re still here… Which means, your boss still didn’t approve to maintain the marketing budget right? Don’t worry, there is still another potent way (read silently: cheap) to do marketing effort in this tough time. Embrace… The Internet.
Hell, there’s too much channel today that is free and targets effectively to groups of scrumptious target market on the internet. You can post free on interest group emails, forums, your own website, and every conceivable Internet channels. There’s them tube, that book of faces, that other social networking that used to be famous before that book of faces came, that multiplication thing, and many others… Fancy words for youtube, facebook, friendster, and multiply.
What is more important than all of the tactics used in this article is clearly your head and quoting Spongebob Squarepants, “a little bit of eee-magin-nation”. What’s written in this article is the basics of basics, you still can screw it up by following it blindly. Every company faces different sets of problems, and not every trick in the book is applicable, there’s still a mix and matching that needs to be done on reality side of things.
So… Research your customer/competitors, get back to SWOT analysis, adapt your strategy and like Takeo Fukui san, ex Honda President said and I would like to quote “Toward this end, Honda will closely monitor the marketplace and then carefully determine what actions need to be taken. Once decisions are made, Honda will take quick action as the company realizes the situation is very urgent and a slight delay in making management decisions could be critical“. So, if a multi[B]illion dollar company is doing it, so should your company.
So what I do then on my company? Did I get to maintain my marketing budget? Did I employ all this ridiculously basic marketing principle? Well, like I said above, every company faces their own set of problems… And with my imagination… Even children does not need to cry and scream for their parents to be noticed… It’s wordplay, if you know where I work… then that bolded sentence would mean everything.
P.S. Sorry for the lack of reference, I base it off my experience and from a marketing seminar which I couldn’t or don’t know how to refer here. However, the marketing term here are all basic marketing principle anyway.