Resource Center » Why Marketing Dollars are Always the First to be Cut in a Difficult Economy
Companies can remain successful if they find better ways to market themselves in tough economic times.
Throughout history, the marketing dollar is the first to go when economic crunch time hits. Many companies consider marketing the easiest budget to cut because it seems the least likely to impact operations, but this isn't always true. Not only is cutting marketing funds a bad idea, but it is a potentially crippling one!
Marketing in Difficult Times
According to a survey done by the Association of National Advertisers, most businesses predict at least a 10% cut in their marketing budgets, although some estimate nearly a 30% cut. Companies can remain successful if they find better ways to market themselves like other companies have in the past.
Ivory soap and Proctor and Gamble are good examples of marketing-savvy companies. During the Great Depression, many businesses were struggling and failing and most were cutting back on marketing and advertising. Ultimately, those who succeeded and gained market share were companies that did not make marketing cuts, like Proctor and Gamble. In fact, P&G went even further with their advertising and increased the marketing budget by sponsoring “soap operas” on the radio.
P&G was not the only company to find great success during the depression. Familiar brands such as Chevrolet and Camel also gained greater market share during this era and all the evidence points to increased marketing as the reason. These companies continued to operate as if nothing was wrong while all of their competitors were cutting marketing and advertising budgets. They kept their products in the public view throughout the depression and this strategy resulted in profit and new customers. Remember that the company that stays in view of the public will keep hold of its market share!
How to Market in a Down Economy
Marketing is essential to success in a tough economy, but that does not mean there is no room for improvement. Half of the battle during any economy is knowing where to spend marketing dollars, and this is even truer when the economic future appears to be grim. A company can make marketing dollars go further by making a few key changes.
Marketing Changes:
- Look at the current marketing strategy and determine areas in need of improvement
- Keep marketing dollars at the same amount or consider increasing them
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Assess and then reassess the budget to make sure every dollar counts
Know your customers inside and out. This may require spending some marketing money on market analysis, public relations, or sales promotional products.
Once your research is complete, then your business will know the needs of customers and use that information to more effectively target them.
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