Marketing during a recession in a few words
At the time of crisis, most companies, looking for savings, begin budget cuts with marketing activities. Is business policy understood in this way correct? Let’s examine the issue.
Aspect 1: Attempt to define
Let’s start with the basics – what is marketing? This term, commonly used and repeated, is in fact usually misunderstood. The worst if we put an equal sign between the term marketing and advertising without looking for a broader context. It seems to us that marketing is nothing more than promotion, and that’s where we end our divagations. It’s a bit better if we realize that this concept is more capacious and it’s a combination of various communication-oriented activities. Nevertheless – it is still not enough.
Remember that there is no single, precise definition of marketing, also the scientific community is not consistent in this topic. This is primarily due to the changing business environment and consumer expectations. Therefore, we treat marketing as a process of dynamic relations between the company and its environment, as a philosophy of creating consumer needs and responding to these needs, as well as a system of social, psychological and economic conditions that anchor and authenticate the company on the market in which it operates. The sum of the above creates the concept of marketing, and in addition – all components, together and separately, are relevant and directly affect each other.
In my opinion, an important word (maybe even the most important one) that we should associate, connect and juxtapose with the term marketing is communication. There is no relationship without communication, no information, no advertising, no identification, no results or identity, no modern tools enabling the existence of a company in the minds of recipients. We should also remember that marketing is a field strictly dependent on current trends and must always respond flexibly to them. Without it, it’s hard to talk about development and credibility. Lack of these two elements may lead to very bad results – it is very easy to fall out of the market, even without a global recession. To make matters worse… the crisis is also a trend that needs our reaction.
Aspect 2: Cost cutting
Since we’ve tried to understand what marketing really is – we already know that the topic is less obvious and much deeper than one might have thought. The multithreading of the issue means that we can make an unambiguous and resolute diagnosis: no matter what definition we use – we should absolutely not give up marketing, especially at the time of crisis. This is the kind of situation where you need marketing the most! If you want to fight for your business, then you can’t afford to give up marketing activities!
However, in a situation of recession, companies uncompromisingly cut the budgets of marketing departments. Why? Because many of them still limit their activities only to advertising and promotion (they also think short-sightedly, but this is a topic for separate analysis). Interestingly, even if we focus our observations only on cutting advertising costs – this is still the wrong way. History knows many examples that confirm that corporations that did not save on advertising emerged unscathed from the crisis. Let’s mention the American company Kellogg, which produces breakfast cereals.
In the era of the Great Depression, Kellogg doubled its spending on advertising, while its biggest competitor – Post, did the opposite and cut costs as much as possible. A moment later, Kellogg increased profits by 30% and became the undisputed market leader. In the 70s, the same happened with Volkswagen and Toyota (for the benefit of Toyota), in the 90s Pizza Hut discredited McDonalds, and the crisis of 2009 did not stop the development and growth of Amazon on the market.
Aspect 3: Crisis as a chance
Of course, the crisis is a real danger to your business, not everyone will overcome it. Some industries will use their natural predispositions and not only survive, but will take benefits from recession. Others will have to reorganize their current business structure, and perhaps also its scope. Proper risk analysis and new business strategy will help you think of the crisis as a new opportunity. But to implement it you will also need a marketing strategy, understood as a set of responses to current reality.
What’s the matter? Let’s go back to the previously defined area, which is the concept of marketing, and think about how it should work in practice:
- marketing as a process of dynamic relations between a company and its environment, i.e. right now you need to focus on customer relations, maintain contacts, build a sense of connection, ensure the right flow of information, but also go beyond the relationship between the company and the recipient and support local initiatives that respond for a pandemic – get involved in a way that you can (e.g. use your know-how, share storage space, provide logistical support, etc.),
- marketing as a philosophy of creating consumer needs and responding to these needs – maybe it’s time to change the industry, maybe your clients currently need something else, and you can give it to them,
- marketing as a system of social, psychological and economic conditions – this is a more complex topic, let’s look at aspect 4.
Aspect 4: What’s next?
Crisis is a situation that affects all of us, or most of us, which is why building a strategy based on empathy, understanding and cooperation is extremely important in building a marketing strategy. In modern business, conscious and socially engaged brands will win in the long-term settlement.
It can be said that the current crisis also closes a certain corporate stage and the current commercial model. Many experts point out that we have saturated capitalism to the limit. What will the world look like after a pandemic? For now, it’s just a prediction, but for sure you will not succeed without effective marketing.
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