| How to market in tough times? Take advantage of | | | | the recession is or how long it lasts, it's the perfect |
| the opportunity! Economic downturns are Darwinian | | | | opportunity to become aggressive and grab market |
| events in the marketplace. The weak perish and the | | | | share as competitors scale back their marketing |
| strong and agile survive, even thrive. During downturns, | | | | efforts. |
| some companies disappear or are swallowed up by | | | | An aggressive approach will pay some dividends early |
| rivals. Others emerge stronger than ever. There are | | | | but down-the-road rewards are even greater. |
| basic principles which apply during all downturns. How | | | | Companies that gain share during downturns historically |
| those principles are dealt with determine which | | | | keep that increased share when the economy |
| companies will eat and which ones will be eaten. | | | | bounces back. Each share point gained during the |
| What's a marketer to do? Cut prices? Ask Detroit | | | | recession is worth incrementally more as the market |
| how rebates worked for them. When sales stalled, the | | | | eventually recovers. |
| three American car companies flooded the market | | | | A McGraw-Hill study showed that four years after a |
| with so many off-price deals that nobody would buy | | | | downturn, companies that maintained or increased |
| Detroit again without a big rebate or a 0% financing | | | | marketing communications during the economic |
| offer. Cut product quality or service? Remember | | | | slowdown typically experienced 14 times more growth |
| Schlitz? Just thirty years ago The Beer That Made | | | | than companies that cut back. As far as today's |
| Milwaukee Famous was America's second-best-selling | | | | overall gloomy consumer confidence, there is one thing |
| brew. Someone decided to trim costs by switching to | | | | that is emerging. Even though consumers are cutting |
| high-temperature fermentation. Customers wouldn't | | | | back, they're not doing so entirely. Consumers are |
| notice, right? Wrong. Six years later the company was | | | | finding ways to maintain their quality of life. |
| out of business. Cut advertising? When Netflix began | | | | Even in a time of belt-tightening, Americans are |
| making serious inroads into Blockbuster's customer | | | | demonstrating a strong reluctance to give up on |
| base in 2005, Blockbuster cut its $154.2 million | | | | everyday pleasures. According to on 7/15/2008, many |
| advertising budget to $44.7 million. No surprise that | | | | are leaving the car in the garage and staying home. A |
| Netflix grew from 4.2 million subscribers then to 7.1 | | | | whopping 50% of Americans plan to buy an HDTV in |
| million now. How'd the ad cut work for Blockbuster? In | | | | the next year. |
| 2007, they closed 500 stores and saw a $33.4 million | | | | Also, despite the expense, consumers are refusing to |
| profit turn into a $125 million loss through the third | | | | give up entirely on vacationing. Even in these tough |
| quarter. | | | | times, 59% of Americans plan to take a trip of 100+ |
| The Opportunity? Absolutely! Advertisers should go all | | | | miles in the next six months. To grapple with fuel costs, |
| out in the media that produce quantifiable results, | | | | they just plan on closer-to-home trips: Epcot instead of |
| especially since their messages will be more prominent | | | | Europe. |
| as competitors reduce spending. No matter how deep | | | | |