Don’t cut your marketing budget during a recession.
October 27th, 2009 // 2:00 pm @ admin
I understand that you are accountable and your company has to show cash flow and be profitable. It’s also clear that expense/cost cutting as well as budget reduction during a recession is one of the best ways to cope with the down turn of the economy in order to show profitability.
Due to the fact that marketing is more of a long term commitment and results from marketing efforts can only be measured in the long run, companies consider marketing as an expense and a cost rather than an investment. Marketing budgets are one of the first to be evaluated and reduced.
During a recession it’s not the time to reduce marketing budgets. It’s a time to get ahead of your competitors by carefully investing in your marketing. Marketing is always a long term plan and investing in marketing should not be considered an expense, more so an investment. A study has shown that companies that increased their advertising and marketing expenditure during the 1981-82 recession significantly grew their sales in comparison to those that reduced and eliminated their marketing and advertising budgets.
During times of catastrophe and recession customers look for trust. They look for brands that they can trust and we all know that brands are all about trust. If the customers feel and see that a brand is here today and gone tomorrow, then this shows that the brand is all about its own personal gain and not concerned about the customers’ needs. They will lose their trust in the brand itself and of course, once customers lose trust, the end is nigh.
Companies need to balance their short term considerations of strategies to cope with the economy and recession with the long term goals of strengthening their brand and creating brand equity.
Also, during recession it’s not the time to get experimental with your brand. It’s the time to focus on the core strengths of your brand and such strength comes from two things:
1- Unique and favorable associations that customers have of your brand.
2- Knowledge and awareness of your brand.
Both of these strengths can only be emphasized with gaining trust in your brand.
Category : branding
