Case study out of Real Experiences!
On the outbreak of the Corona Virus, there has been a lot of talk and chaos about the economic recession. After the great recession ended about a decade ago, this is said to be the worst hit. Many companies lose their revenue and in the process of cost-cutting, they begin to cut back on their marketing budgets inadvertently. The post results of the 2008 recession showed a cut down in marketing and advertising budgets across different media.
With this said, the popular quote says that Businesses must advertise irrespective of the time being good or bad.
Let us see some strategic reasons why businesses should invest in marketing after a recession.
1. Make the noise:
All your competitors might have cut down on marketing. This gives a good chance to launch a new product or reposition your brand and make your voice heard and set your brand positioning right in the minds of your customers.
2. Reduction of costs:
There are different forms of marketing that comes at a low cost because of recession. Marketing methods like direct emailing may result in greater short term growth for your business. Find out which works for your business better by talking to us.
3. Be heard:
Due to the cut down in ad spend, businesses may be forgotten by the consumers. This gives a perfect opportunity to register your brand in the minds of your consumers. This typically gives a chance to increase your market share and ultimately your profits.
Brand Experiences during Recession:
Let us see some short stories of brands and how they have benefitted by strategically spending on marketing and advertising during the time of recession.
1. Mc Donald’s VS Taco Bell & Pizza Hut:
The 1990-91 recession was caused due to a war in the Middle East, increased prices, and a low market of real estate. Unemployment rose hugely.
The burger giant Mc Donald’s has followed a common strategy during the market downturn – Cutting marketing and advertising costs. On the other hand, its rivals Taco Bell and Pizza Hut have maintained budgets. As a result, There was an increase in sales by 61% for Pizza Hut, 40% by Taco Bell, and a decrease of Mc Donald’s sales by 28%.
2. Post Vs Kellogg’s:
The Post was a leader in the dry cereal market during 1920. In 1933, during the great depression, it has cut down on its spend on marketing. Whereas, its competitor Kellogg’s doubled the marketing budget. They have also introduced a new product “Rice Crispies”. It has become easy to gain the market and a brand image for its products. As a result, Kellogg’s has grown its profits by 30% and has maintained its position as a category leader for decades.
During the recession in 2008-09, Amazon has increased its profits by 28%. This is the result of the company by not only maintaining its marketing budgets, but also innovating new Kindle products. It has gained the customers by being an affordable alternative to books and since maintained its position.
Due to an energy crisis, a recession was triggered in 1973. The US has issued a report on the fuel efficiency of cars in which Toyota Corolla was after Honda Civic. As Toyota had good sales before the recession hit, they resisted their temptation of cutting down marketing budgets and continued. As a result, they have even surpassed Volkswagen in the imported car market in 1976.
There are a number of strategies that businesses may choose from giving discounts to go easy on the pockets of customers to keeping the standard pricing by changing the way it is communicated.
Get in touch with us to find out what is best for your business and sail through this recession smoothly with increased revenue and profits.