Burn Your Marketing Budget Through Recession!

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.

Honda OSM, a Very Bad Dejavu?

Honda and sport, two words that dominates the young guns throughout the 90’s. The Integra, the NSX, The S2000, the hot Type R’s… Boy… Those are the days… But currently, Honda wanted the world to see them as a green automaker, and very desperate at it if I might add. The FCX, the FCX clarity, the Insight, the CR-Z, the Civic/Accord Hybrid and the planned new global hybrid that is purposed built to rival Toyota’s hot Prius. Then, out of nowhere, Honda came up with OSM, a coupe sporting hybrid name tag, and one bad dejavu… Remember SSM? More witty comments and what is SSM after the click. Continue reading

The Combined Magic of Honda Insight and Brute Force

Insight headerBeing featured as an enforcer car on the Ultraman show in Japan really shows the futuristic if not cartoony design of Honda Insight. Honda’s first hybrid vehicle might not be as popular as Toyota Prius, but just what happens when you put a high output motor into a body of a purposed built efficient hybrid shell? Sheer unadulterated fun… More witty comments and pictures after the click. Continue reading

Accord 2008 Global Image Comparison

I might have been too harsh for my preview of the 2008 Honda Accord Asia version. The thing is that, Toyota as Honda main competitor tried very hard to differentiate products where different aesthetic taste is appreciated. Western stereotypes and Eastern stereotypes are very different like cats and dogs, especially when appreciating something visually. Simple and utilitarian are a perfect combination for Westerners while Easterners prefers “the blings”.

Toyota decided to change the face of Camry for American and Eastern market, creating an almost altogether different car (visually). You guys can check it out with the image below…

accord us front

Accord Asia front

Can you guess which Accord is for Asian and American market? (hint:you can’t, it’s the same)

Accord Asia Back

Accord America Back

Can you guess which Accord is for Asian and American market? (hint:you can, now it’s a bit different)

Now let’s take a look at US and Asian Toyota Camry…

Asian Camry

US Camry

Asian Camry (above) and US Camry (below)

As you guys can see, how starkingly different the US and Asian Camry are, while the Accord is just that… The same. As US market is utilitarian, they mostly didn’t care about the exclusion of projector headlight on the Accord, while the US Camry has them. This is once again, only a cosmetic as it is the bulb that is more important than the shape of the headlight. However, Asian market whores about silly cosmetics, and Accord doesn’t have it.

Management wise, Honda did the right thing. It’s cost saving measure to the highest degree, after all, what we need is basic transportation right? Wrong… Marketing wise it’s not the right thing to do. In marketing we have what we call customer focus, where one shaped a product based on what is the market demand. However, Honda has this penchant notion that Honda users are glad being shoved on what they need not what they want.

Truth be told, even though I’m rambling how the Accord looks, magazines and people love the new Accord. In America, the new Accord gains first place in many mid sedan comparisons (cars.com, edmunds.com, wheels.ca). Even though one publication rates the Accord third, at least three other publication rates the Accord at first.

So there you go, visually I loathe at the new Accord, but my friends told me… When you are sitting/driving in the new Accord you won’t see what’s on the outside, you drive the car, you enjoy the seating, you feel the raw power of the engine and bathe in the luxurious and cozy interior. They might be right… I am to cynical about how it looks, I forgot what makes a Honda a Honda… A sensible car. Because in the end, I guess it’s not how you look, but it’s what you have inside, that makes you as a person, that also applied to a car I guess.

(I’m watching 12 days of Christmas eve at Hallmark, and I guess it softens this bitter heart a bit)

Images are taken from Temple Of Vtec, Toyota Indonesia website, Honda Thailand website, and Edmunds.com, cropped to fit.

Accord finishes first at Edmunds comparison

Cars.com Accord comparison

Wheels Accord car of the year candidate