Marketing in a Recession

Singapore is in a recession, as are most of the top twenty developed nations of the world. In most organisations, the reaction is predictable. Cut marketing budgets - every one else is. Yet, doing so could be one of the most myopic decisions a business could make.

Why?

When a market is down, prices are too
Marketing any product or service involves a cost. When times are good and economies are booming, this cost is higher than normal. The reason is simple. There are a far greater number of firms competing for the attention of the customer. For a marketer to stand out - or simply be heard - they must put a lot more weight behind their media spend.

In a market that's down, however, many competitors withdraw completely from the market or significantly lower their media spend. This presents the astute marketer with a priceless opportunity to buy media impact at a fraction of what it would normally cost.

Let's illustrate the point with a simple mathematical example.

Let's assume the the total media spend in the banking industry in Singapore in 2008 was 50 million dollars. Bank A's budget was 10 million dollars. What this means is that its category share of voice is 20%.

Let's assume in 2009, all the major banks cut their media spend which drops the total category spend to 40 million dollars. If Bank A maintains its budget of 10 million dollars, its share of voice has increased. It has moved from 20% to 25% - without any additional expense or outlay of funds.

In this situation, the marketer has gained at least in media terms.

The next question though is how to use these gains for strategic impact and advantage
Sure you have an opportunity to buy media (or more specifically the opportunity to be heard) at a lower price. But the real question is what are you going to do with your buy, what are you going to invest it in?

The choices are many. You could use your low cost media space for promotional purposes - to try and sell more products during the recession and stimulate short term demand - or you could use it to build your brand and create equity for the long term.

Many marketers will go for the short term solution and try and stimulate sales demand during the recession itself through incentives and price-off's. Changing market sentiment is difficult enough for Governments though, leave alone a single brand. In all likelihood - you will find it proves an uphill task depending on the product category that you're in.

Then more appropriate solution in my view is to focus on the long term and use your media investment to build your brand. To take the time to understand what it means (if you haven't done that already), what makes it unique, different and compelling to your audience and then convey this difference to them in the most impactful manner possible.

What this approach will do is prepare you and your brand for success when the market turns. When the ice of the recession shows its first signs of retreat giving way to the first buds of recovery and growth.

If you have used the recession to build your brand, then you will have gained during this period of uncharateristically low marketing activity a strong lead over your competitors in terms of your brand's awareness, knowledge and preference - factors that ultimately lead to higher sales, growth and profit.

Recession. Crisis or opportunity?
The recession is here. And it's both a crisis and opportunity. The question is how you are going to use it to build your brand's future benefit, advantage and success.