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Capturing Opportunities in Chalenging Times

Capturing Opportunities in Chalenging Times

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09/15/2010

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The YellowPapers Series
Capturing Opportunitiesin Challenging Times
Marketing and Advertising in a Recession
 
Our seventeen years of largelyuninterrupted growth have leftmany businesses ill-prepared tomake the decisions necessary toensure survival, let alone grow inthe marketplace today.
The current global financial crisishas hit with such speed and severitythat it appears entirely unique. Evenwith the various economic downturnsexperienced in 1990-91, 1997, 2000-01,and 2003, our seventeen years of largelyuninterrupted growth have left manybusinesses ill-prepared to make thedecisions necessary to ensure survival,let alone grow in the marketplace today.In these previous downturns, wemust credit the undaunted consumeras the hero who came to the rescuewith largely unaltered spending andoptimism. The current situation ismuch more challenging because it isglobal and the impact falls directly onthe consumer. Home prices are facingsteep declines, falling share priceshave dramatically reduced nest eggs,unemployment is increasing, and pricesare rising faster than wages. Tighteraccess to credit has hit consumers aswell as business, impacting industriesseen as the engines of the globaleconomy.The situation has forcedconsumers to re-evaluate theirspending along the fundamentallines of “wants” and “needs.” In fact,they are being counseled to do so.ING Direct recently sent an e-mail toits customers with the instructionsto “avoid splurging; identify and cutout unnecessary expenses and savefor what’s essential.” The daily newsand these types of communicationshave undeniable impact on consumermindset and behavior.But the plain fact is every economybrings opportunity for those who makebrave and intelligent decisions. Forcompanies the critical question nowis: Are we proactively managing ourbrands as long-term assets through thisdownturn and beyond? For consumersthe question is: What factors influencemy purchase decisions in tough times?This paper explores those questionsin four sections: the cut versus investdebate in marketing and advertising,brands as long-term assets, theconsumer price/value equation, andsteps to take in managing brandsin a downturn. The objective is toclearly establish the challenges andopportunities that are available tobrands in severe market conditions.
Capturing Opportunities in Challenging TimesThe YellowPaper Series02
 
03
Cut versus Invest
 There is ample empirical evidence that budget cuts during recessions in marketing andadvertising have both short- and long-term negative impact. It makes sound business senseto evaluate all expenditures to determine their return at any time. And every recession putsmarketing and advertising under the microscope, often labeling those activities as “nice tohave.” But the evidence shows that budget cuts in these areas actually depress sales, reducemarket share and income, and erode profits:

marketing and advertising versus those that did not.

Les Binet

 les.binet@ddblondon.com
Capturing Opportunities in Challenging TimesThe YellowPaper Series Jeff Swystun
is

brand including intellectual capital, marketing,internal communications, and knowledge

and author of numerous books, papers and reports

Dan Miller


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