Villing & Company

Catch the Wave: When a recovery comes, and it will, the companies that made smart marketing decisions will reap the benefits.

I’ll admit it. I have been reluctant to write this blog. It seems so self-serving for a marketing agency to talk about staying aggressive with promotional activities and spending when jobs are being lost and other painful cuts are being made to the budget. But history has proven that companies which continue marketing during a recession are usually rewarded by increased market share that translates to increased sales and profitability when the economy recovers.

As bad as things are, I have a sense that we are close to the bottom of this recession. There is upward movement in housing sales (if not home prices) and there are substantive indications of new hiring. If the wave of recovery is beginning, maybe this is the ideal time to untie your boat and get back out on the water.

The research firm, Meldrum & Fewsmith, has done studies about the impact of aggressive marketing during recessions since 1949. Here are a few of the examples they cite about promotional spending by major brands during downturns as quoted in

  • Kraft salad dressings and Jiff peanut butter both raised marketing budgets during the previous recession and increased sales by 70% and 57% respectively.
  • Pizza Hut increased their marketing budget and increased sales by 61%.
  • During the 1989-91 recessionary period, most of the beer industry cut budgets, but Coors Light and Bud Light increased theirs and saw sales jump 15% and 16% respectively.

Meldrum & Fewsmith report similar results for B2B companies.

Of course, businesses don’t have the luxury of printing more money or deficit spending strategies. Marketers have to be smart about their promotional spending. I believe the most important strategy at this time is one that emphasizes value. It’s no surprise McDonald’s and Wal-Mart are doing great. But one doesn’t have to be the low-price provider to make a value statement. In fact, premium-priced products and services may actually be well positioned to increase sales by reducing prices or bundling goods for added value. Many buyers are willing to trade up to premium items because they now perceive a small differential in price can provide a substantial increase in quality.

The same approach can be applied to your own acquisition of marketing and media services. Let’s face it. Marketing providers are hungry too. Many of them may be willing to negotiate the costs of their services. Whether it’s advertising time or space, printing, research services or whatever, the same value theories apply. You should be able to do more marketing than ever for less money.

While it may be true that a rising tide lifts all boats, some are more buoyant or have better hydrodynamics than others. Whether or not the wave of recovery is here or just ahead, it’s probably time to get on board.

Filed Under: general

Villing & Company

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South Bend IN 46601

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