Marketing Strategies in a Tough Economy

Concern abounds about consumer confidence, spending patterns, and maintaing sales volumes. Add to that anxiety problems with rising costs of goods produced and transportation costs, and it is easy to understand why marketing budgets are prime candidates for trimming. No choice but to hold the line on expenses if sales are sluggish. Or is there a choice?

Conventional wisdom says be conservative or even cut back on marketing during down economic periods. That formuala works... if you subscribe to the view that marketing is an expense that follows business activity. On the other hand, if you view marketing as an investment that stimulates sales, should you not be exploring options for increasing marketing investments? Look at the recent performance announced by General Mills. It announced a 61% increase in earnings for the most recent quarter despite negative trends in the economy. The secret? One is increased spending on marketing (up 13%). The other is product innovation. Making products that consumers value often command price premiums, which is key to driving profits.

It would be an oversimplification to say spend more on marketing, expect earnings to increase. The challenge is identifying the optimal mix of marketing tools that will allow you to achieve business objectives. In the case of consumer packaged goods like those sold by General Mills, it was sampling, media advertising, and contests. For other companies, it may require appealing to customers using other tools. The point is: don't go into a shell when tough economic condidtions hit!