Recessions are not new and this is not the first time companies of all sizes and in all industries have to face into difficult economic times. Research from many sources including Bain & Co. and Harvard Business School continues to show businesses are self-destructing when they cut back on marketing in downturns. If implemented and evaluated properly, marketing creates a return on investment in multiple ways.
Recession or not, a good marketing approach requires intensity and is based on thought leadership about every facet from social media to internal company communications. And marketing, of course, includes strong public relations. If anything in difficult times, maintain your marketing investment and expand your PR efforts.
"Though this strategy might seem to make common sense, recessions are times that call for uncommon business wisdom," wrote Ms. Blaine, president and CEO of the The Blaine Group, Inc. in Los Angeles. "Recessions reward the aggressive marketer and penalize the timid one."
Authoritative Study
Ms. Blaine cited a noteworthy study, "Advertising & Marketing During An Economic Downturn," by David Stanley of Industrial Equipment News. It analyzed the situations of more than 1,000 manufacturers in what's called "Profit Impact of Market Strategy" (PIMS).
Far too often, studies appear to be self-serving for special interests. But this study, Marketing in a Downturn is objective and unique (Click link). It is from The Strategic Planning Institute in Cambridge, MA, www.pimsonline.com, originated as an internal planning project at General Electric. Then, from 1972 to 1974, it evolved into a Harvard Business School project.
The PIMS study concluded that bold marketing in a downturn resulted in strong performance while tepid marketing had undesirable consequences. In addition, the higher marketing investments did not hurt profits for the short-term.
"Penton Research Services reports that shortly after the 1990-91 recession, Coopers & Lybrand, in conjunction with Business Science International, surveyed CEOs from growth companies about the effect the recession had on their profit growth and the actions they had taken in response," cited Ms. Blaine.
"A strong marketing program enables a firm to solidify its customer base, take business away from less aggressive competitors, and position itself for future growth during the recovery," she concluded.
Companies that view marketing strictly as a percentage of their budgets miss opportunities for growth. Successful companies look at the short and long-term ramifications.
During downturns, good companies that cut marketing budgets soon learn they do not retain dominance in their marketplace, and they will learn they have lost market share once the upturn begins.
