If you hear a loud rumbling, it is likely the growing group of economists and analysts deeming the U.S. economy in recession or facing an impending recession. Periods of economic decline are nothing new, but how marketers manage their brands and their businesses will not only determine how they fare during a recession but later on when the economy improves.
An article on the web site of Advertising Age magazine addresses the issue by asking 10 experts their opinion about the effects of a recession on the advertising industry. Brian Niccol, Chief Marketing Officer for Pizza Hut, identified a key response marketers should have to economic downturns: search out ideas that deliver value to customers whose value judgments are impacted by changing economic condidtions. Niccol said "The current situation requires Pizza Hut to redefine how the consumer obtains value solutions. We've acted quickly to create an everyday value pizza solution, Pizza Mia, which is just five bucks with superior taste." Just as opportunities exist to move into upscale segments during strong economic conditions, marketers must look to value segments to create business in lean times.
Another pearl of wisdom in the article came from Mark-Hans Richer, Chief Marketing Officer for Harley Davidson. He dismisses the tendency to cut marketing expenditures when the economy is weak. According to Richer, "Our belief is that spending through a market downturn creates competitive advantage for the market upturn, and an extra dollar spent today has extra dividends for tomorrow." In other words, "saving" money on marketing during a weak economy is not saving at all. Building a brand is a long-term process, not a short-term tactic. The intestinal fortitude needed to stay the course and continue marketing investments during a recession is great, though. Link
Labels: Marketing Environment, Marketing Strategy