October 6, 2014
As chaos looms during an economic recession, companies are forced into making knee-jerk reactions on which costs to cut and keep. While cutting marketing and PR programs may appear as a quick fix for your budget, it is essential to remember that sustaining a competitive, long-term perspective for your business is the foundation for success. How can a company optimize its resources to create a competitive advantage in an abysmal economy?
CUTTING THE RIGHT COSTS: According to www.adweek.com, companies that cut marketing programs during a recession typically see sales and income fall by 20-30 percent over the next two years. Reducing the marketing budget for your company can create new opportunities for other competitors; if your company’s name isn’t out there, how can the consumer be drawn in? Cutting funds from the marketing budget decreases consumer traffic, thus decreasing sales and the overall profits for your business. It is important to cut unnecessary costs that will not damage your company in the long-run. Firms that cut spare capacity along with manufacturing and administrative costs tend to be more successful.
SUSTAINING YOUR BRAND AND COMPANY NAME: Marketing in a recession can actually create an opportunity for a competitive advantage. Competitors who are suffering financially may cut back on their marketing budget, which can create an opportunity for your company to reach out to consumers that your competitors are not able to. If the consumer notices that your company’s brand and company name is no longer prevalent, they may associate your absence with an unstable company. Implementing marketing in a diminished economy allows your brand and company name to be amplified over your competitors, which is crucial to both your business and the consumer.
THE TAKEAWAY: Marketing isn’t just an expense, it’s an investment. Companies that cut back in a recession lose market share while those who continue to advertise gain market share at a lower cost. Even in a recession, the consumer is always looking for the best deal and a consistent product. Marketing in a downed economy gives your company the opportunity to establish itself over its competitors in an ominous, uncertain, fiscal time.