It looks like the worst of the economic slowdown is behind us. Some economists have predicted the beginning of a recovery early next year. Agreed, economists get it wrong most of the time. As they say, economists correctly predicted ten of the last three recessions! Let’s hope, for our sake, they are right about recovery.
Everyone and his mistress have talked about the pains and problems with economic slowdowns. Every cloud has the proverbial silver lining. Is there anything for us marketers to learn from this slowdown? I think there is. And here are three.
1. To begin with, most of us were referring to this lull as recession. By God, at least this country of ours was far from it. We were actually growing albeit much lower than last year. We had been growing so fast and so fine all these last ten years or so that most of us were not happy when the growth slowed down. The slowdown made one thing clear to everyone, if ever clarity was needed: ‘We Indians want growth; and growth at a galloping pace. Anything slow and we are not willing to accept.’ For a poor and illiterate country that has just started to embrace open markets and globalization, it’s a heartening thing to note.
2. Premium brands are the ones that seem to take a pounding during economic slowdowns. Honda was hammered. Toyota was traumatized. Mercedes Benz was murdered. But did you notice Maruti managed! While their premium brands slowed down, the company sales itself didn’t. The company’s mass brands grew even if not by much. It clearly shows and comprehensively proves: Don’t put all the eggs in one basket. If you have premium brands in your portfolio, try having mid-sized ones and low-priced warriors too as part of your product mix. Come slowdown, your premium brands would wobble; but your mass brands will wiggle you out.
3. Come an economic slowdown and marketers seem to cut costs – and that includes cutting down on the easiest one to cut – advertising. A study by Business Line has proved that all those companies that actually bucked the slowdown and increased their advertising spend were the ones that actually grew during this slowdown. Makes sense, doesn’t it? When everyone cuts down their noise levels, even if you whisper you are heard loud, by the ones that matter most – customers. Remember, tightening your belt during a slowdown is fine; but too much of a tightening and you start suffocating. Loosen it a bit during a lull and you might well laugh all the way to the bank.
For the sake of all of us and this country, here’ hoping for an early and speedy recovery: Three cheers to the economy, up up hooray!
7 comments:
Hello Sir,
I liked the article. I would like to make few points
1. I think in downturn "Customer Retention" should be the primary Focus rather than new customer acquisition, since in downturn people search for alternatives (may be lowcost/affordable). Companies should provide new variants of the same products, for example 200 ml of cold drink instead of 330 ml pack.
2. Marketing budget is also a cost, so when a company goes for cost cutting, it's obvious that marketing cost also be considered, but companies can go for alternate low budget advertising. for example mailers/online marketing instead of direct marketing.
3. We have noticed that for last few months retail stores are promoting there own brands, since customer are looking for low cost alternatives.. this is the right time for retailers to increase the revenues through there own brand by keeping their own product with the branded stuffs.
As u said.. when there is a silence whisper also makes a noise... it is the right time for companies to make there products visible, if they can afford to keep marketing budget intact.
Agree with three cheers Boss. Compare to others, BMW managed recession very well in premium segment. The third cheer can be well depicted from the growth of FMCG products in this so called recession due to their ad spend.
Hello Sir,
All the three lessons were relevant to the current scenario and I think its high time that companies start taking actions in terms of recession proof marketing practices. This can help them in combating the ups and downs of the economy, finance and markets.
Regards,
Vijay
hello Sir.,
its really a good post by you.,but we will be thankful to you if you dont use more jargons in your posts.
regards
deepika
Dear Vijay,
Kindly explain some " Recession Proof Marketing Practices".
"try having mid-sized ones and low-priced warriors too as part of your product mix". The quote is too superficial & i beg t differ. It depends on the vision of the company.ur posts are beautiful if u use less of jargons
dear Ms/Mr.anonymous and Ms.Deepika Sir's post always goes great with the jargons and the language he uses in his post.. once u start reading his posts you'll admire it.. yar...
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