Cutting the luxuries in business depends on your interpretation of a luxury. In the credit crunch more and more essentials are getting misinterpreted for luxuries and are being removed from what is in essence an important survival strategy. Training and Marketing are prime examples of essentials. These budgets are often one of the first to be cut during hard times, but are actually key to ensuring a steady pipeline of business leads. Business cannot rely on existing customers alone.
So many businesses cut their marketing budget along with their Duchy Originals biscuits at meetings, committing potential brand suicide in an economic slowdown. History has shown that those brands who commit to pushing through recession with clear and consistent marketing campaigns emerge as the strongest survivors.
Tim Lindsay, Chief executive of advertising giant TBWA says, “There’s tons of evidence from the last 2 recessions showing that brands which continue to invest in marketing communications during a recession prosper mightily afterwards. The tea market is often cited as an example: PG continued to invest last time round and grew its share. Tetley and Typhoo didn’t, and are much diminished as a consequence.”
Robert Hall, founder of Loft Interiors, which supplies furnishings to buy-to-let landlords says, “It is companies that maintain a strong brand throughout a recession that emerge on the other end far stronger as a consequence. As their competitors melt into the background, businesses that have maintained visibility and credibility can steal market share once that market becomes buoyant again.”
Pepsi and Coke are another example of where handling a recession in the right way can make a huge impact. During the last recession, Pepsi massively increased its marketing during the downturn while Coke decreased its spending on advertising. As a result, Pepsi managed to increase its market share, and has held onto it.
Companies need to get creative. PR can be a cheap way of keeping your company profile high. Networking and online marketing come into their own, as outlay is minimal. With a sprinkling of creativity, the impact can be huge.