How to take full advantage of the current recession

In these tough economic times whatever marketing decisions you make, you need to make sure that they’re based on the best information available. This is where sound consumer and media research can point the way for you. Good quality, up to date data is essential – as is research and planning software that will help you analyse the data, understand it and apply it to the creation of advertising campaigns that will yield you recession-beating results.

It’s important to keep ahead of the game in a recession, especially in your advertising and promotional efforts.

As a first step, it’s critical to understand consumer spending. According to marketing doyen Philip Kotler, as household incomes fall during the course of a recession, consumers go through several stages of adjustment, namely: Denial, Cut & Trim, Anger, Despair and Resignation. By keeping close to your customers, you’ll be in tune with their current psychological state and in an excellent position to tailor your advertising initiatives accordingly.

Should you cut advertising spend?
Here we draw on the experience of Tony Hillier and Marilyn Baxter who studied the business performance of 1 000 companies. They concluded that:

“The natural reaction of many businesses experiencing a downturn in their revenue is to cut costs in areas like advertising and promotion. Our findings prove that they should do exactly the opposite if they are to ride out a recession and thrive thereafter. “The data shows that businesses which increased marketing spend were not significantly less profitable during recession. However, their profits increased dramatically faster once recovery started – unlike cutters of marketing spend whose profitability actually fell when recovery began. “Furthermore, businesses which increased marketing spend in recession, gained market share three times as fast as cutters once recovery began.”

Making the most of the downturn
Dr Simon Broadbent advocates “taking advantage of tough times to turn the screw on your rivals”. Budget slashing is no answer – even maintaining your level of spend can give you a major competitive advantage. During bad times you can enjoy greater relative share of voice.

Effective actions can be taken to develop new media and new messages, attuning them to your consumer’s state of mind. It can also be a time to move media money into more cost-effective channels, for example from television into radio.

Taking well-informed marketing decisions
This is even more critical in a recession like the one we’re experiencing now. The good news is that Telmar can help you with marketing, advertising, media and research interpretation and expertise – in all major markets across Africa and around the world.