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Now is the time to separate myth from fact on what it takes to survive and thrive in a downturn. We’ll call on recessionary marketing research from the 1920’s to the 1990’s to glean insights on how successful marketers innovated, changed and thrived to emerge stronger and with greater market share than ever.
Citation preview
The Value of Marketing During a Downturn
January 27th, 2009
Agenda
7:45-8:30am
Registration And Networking
8:30 - 9:15am
Facts On The Value Of Marketing During A Downturn
9:15 - 9:45am
The New Playbook For Marketing In A Recession
9:45-10:00am Break
10:00-11:00pm
How To Think About Pricing And Budgeting In A Downturn
11:00-12:00pm
Digital And Emerging Marketing Strategies In A Downturn
12:00- 12:45pm Networking Lunch
Agenda
12:00- 12:45pm Networking Lunch
12:45-2:45pm
Recessionary Survival Tactics: What‟s Working And What‟s Next
2:45-3:00pm Break
3:00-3:45pm
Offbeat Marketing: Frugal And Creative Ways To Gain Market
Share In A Recession
3:45-4:30pm
Putting It All Together: The Recessionary Marketing Roadmap
4:30-4:45pm
Reflections On Marketing In A Downturn: Discussion And Q&A
4:45pm Event End
After-Event Slides & Resources
The slides and resource links are available electronically after the event:
events.marketingsavant.com/stimulus
password: stimulus
Your challenges
Marketing on a significantly reduced marketing budget.
Building brand identity during a decreasing economic market. Expanding and maintaining brand quality control while moving toward
more digital and social networking opportunities.
Competition.
Maintaining Trade Show costs
I think our most significant marketing challenge is to convince our patients that their treatment plan is necessary despite their perceived
"high cost" of it.
get more people to know about us so we can increase top line revenue from 2008
Owning our thought leadership position and gaining access to target market account leaders.
Creating similar veined materials for greatly varied audiences
New ways to reach the younger generation that savvy and relatively inexpensive
Raise familiarity of the Club to drive support. The audiences are diverse (alumni to top level donors). Limited resources.
What can I do different, but within budget
Where can I get the most bang for the buck.
#1 Maintain volume with current customers. #2 Find and win new customers.
Enrollment - marketing to the 18 year old audience and their parents
Increasing customer base during a sluggish economy.
Not loosing market share from 08'
Recession Slogans
1932: “More than one advertising executive has publicly
acknowledged his debt to the Depression, admitting that it
was not until the pressure of necessity exerted itself that
he really found out how to get 100 cents' worth of value
from the expenditure of every advertising dollar,”
- Advertising Age Editorial on Oct. 29, 1932.
The Great Depression of the 1930s eliminated over
50% of the retailing businesses in the U.S.
An example: In 1930, Scott Paper promoted the high
quality of its toilet paper, saying it was better than
competing brands, which its research had found were
"chemically impure."
By the first 10 months of 1930, Scott's overall sales were
up 14% vs. the same time period in 1929, says Bradley
Johnson, Advertising Age director of data analytics.
Even in the depths of the Depression, Scott persuaded
consumers to spend more on the "ultimate disposable
product," Johnson says.
In 1933, Scott took another bold approach with ads
that touted paper towels as a kitchen necessity. While
consumers were watching their cash, Scott was
able to sell "convenience," Johnson says.
The Depression "was a horrific time, yet consumers
still consumed, advertisers still advertised and
commerce went on," Johnson says. "That's a pretty
positive message for looking at 2009. Things will be
rough, but there will be opportunities."
1970 recession year - American Business Press
(ABP) and Meldrum & Fewsmith study showed that
"sales and profits can be maintained and
increased in recession years and [in the years]
immediately following by those who are willing to
maintain an aggressive marketing posture, while
others adopt the philosophy of cutting back on
promotional efforts when sales appear to be harder to
get."
1974-1975 recession years - ABP/Meldurm &
Fewsmith 1979 study covering 1974/1975 and its post-
recession years found that "Companies which did not
cut marketing expenditures experienced higher sales
and net income during those two years and the
two years following than those companies which cut
in either or both recession years."
1975 RecessionGeneral Motors
In 1975, during a
deep recession in the
automotive industry,
GM introduced Mr.
Goodwrench as the
“smiling, balding
mechanic (with clean
hands)” to help sell
their profitable
services and parts.
1981-1982 recession years - McGraw-Hill Research's
Laboratory of Advertising Performance studied recessions in the
United States. Following the 1981-1982 recessions, it analyzed
the performance of some 600 industrial companies during that
economic downturn. It found that "business-to-business firms
that maintained or increased their marketing expenditures
during the 1981-1982 recession averaged significantly
higher sales growth both during the recession and for the
following three years than those which eliminated or decreased
marketing.”
1980’s Recession
Softsoap out-innovated
giant Colgate-Palmolive in
1980 with “revolutionary”
liquid soap and was later
bought by C-P in „87.
Absolut vodka was brought
to the US in 1981 and had
#1 market share by 1985
Carnation pioneered
premium cat food in 1980
Loyalty marketing was
launched with the first-ever
frequent flier program by
American Airlines
1990-1991 recession years - "Fortune follows the brave,“
announced the AMA, noting that the data showed that most
firms that raised their marketing budgets enjoyed gains in
market share. Among the sample, 15 percent reported "greatly
decreased” ad budgets. Advertising was "somewhat cut" by 29
percent. "The keys to gaining market share in a recession,"
concluded Management Review" seem to be spending
money and adding to staff. Firms that increased their
budgets and took on new people were twice as likely to
pick up market share.
Thought Leadership in the 1990-1991recession
From July 1990 to March 1991, the U.S. economy was in the grips
of a deep recession. Economic growth hadn‟t been as slow since
the Great Depression. American companies severely cut spending
on consulting, information technology and IT services – except in
one area: on firms that could help them reengineer their
operations.
Reengineering was powerful in showing how companies used IT to
make dramatic productivity improvements. But it also
demonstrated to consulting, IT, and IT services firms how they could
greatly increase demand for their offerings: by creating thought
leadership. In the consulting and IT industries, reengineering was
the blockbuster management concept of the 1990s.
More recession marketing facts
Businesses that increase marketing expenditures in
recessions gain an average of 1.5 points of share
Businesses that cut marketing do so at an average
rate of 23% in recessionary periods
Those increasing budgets do so at a rate of 17%
1/3 of retailers shift ad agencies during recessionary
periods
Firms that hire marketers and increase budgets are
2X as likely to pick up market share
Firms that changed agencies were 5X as likely to pick
up market share!
Why the recession works in your favor
The relationship between SOM and SOV
The relationship between brand size and profit
margins
Reduced noise during recessions provides
opportunities
The relationship between SOM and SOV
Share of Voice leads to Share of Market
Increase SOV in year 1, realize SOM in year 2
Depends on competitor SOV reduction
The relationship between brand size
and profit margins
Increasing SOB (size of brand) footprint increases
ROC (return on customer) over time
Increase in ROMI (return on marketing investment)
over mid-term (lower marketing rates + new
customers + retention = >ROMI)
“Bigger brands” enjoy great scale
Reduced noise during recessions
provides opportunities
New product/service launches often have greater
impact in recessions
Lower „volume‟ in the marketplace makes SOV &
SOM easier to capture
Stay away from safe “me-too” offerings
A.G. LafleyCEO, Procter & Gamble
“We have a
philosophy
and a strategy.
When times are
tough, you build
share.”
Facts on the Value of Marketing During a Downturn
Q & A
Need help after the presentation? Email [email protected]