Monday, November 17, 2008

Marketing in Challenging Times

Many companies seem to be wrestling with the same question today: “In these troubled times, should we be cutting back on our marketing initiatives?”

If you listen to Advertising Age, you won’t cut your marketing budget … at all … ever!

As editor Jack Neff wrote earlier this year: “Don’t cut that budget. Recessions offer what may be unprecedented opportunities to market in an environment of relatively less noise, as others cut back.”

Of course, AdAge may not be the most neutral authority when it comes to the value of marketing. What do the academics and social scientists have to say?

Harvard Business School Professor John Quelch; Gary Lilien and Arvind Rangaswamy, professors at Penn State's Smeal College of Business; McGraw-Hill and a research firm called Meldrum & Fewsmith all agree that increasing marketing and/or advertising expenditures in a recession yields powerful benefits, including better business performance, increased sales, higher profits and a dramatic positive change in market position.

The McGraw-Hill study of 600 industrial companies, for example, found that B2B firms that maintained or increased their advertising expenditures during the recession “grew their sales 275% from 1980-1985. Sales of those that cut their ad spending averaged only 19% growth during the same period.”

According to Anna Maria Virzi, executive editor of The ClickZ Network , during the 2001 recession, Dell and Wal-Mart saw the downturn as an opportunity to invest more than weaker rivals in marketing. They were following the path laid during the Great Depression, when Camel cigarettes and Chevrolet were known for their aggressive marketing and grabbing market share from rivals.

And remember: PR is significantly less expensive than advertising and much more credible. We’re talking about a modest investment in time and money that delivers a major return on investment.

When pondering the future, think of yourself as a distance runner — if you’re strong already, when you hit the hill, you’re going to speed up a little. You need more than just strength, you need the strategy and nerve to exploit your strength.

Technorati Tags: marketing, advertising, recession, Advertising Age, Jack Neff, John Quelch, Gary Lilien, Arvind Rangaswamy, McGraw-Hill, Meldrum & Fewsmith, Anna Maria Virzi, The ClickZ Network, advertising expenditures, business, communications, public relations


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