As the economy continues to fluctuate, it's important for brands to consider their marketing strategies and adjust as necessary. During a recession, many businesses may be tempted to cut back on their marketing efforts in an effort to save money. However, this can be a big mistake. In fact, research has shown that companies that increase their marketing efforts during a recession tend to come out stronger on the other side.
One study, conducted by Marketing Management Analytics, looked at the performance of companies during the Great Recession of 2008-2009. The study found that companies that maintained or increased their advertising spending during the recession saw significantly higher sales and market share growth compared to those that cut back on their advertising. Furthermore, these companies also had higher stock prices and better overall financial performance.
Another study, published in the Journal of Marketing, found similar results. The study looked at the advertising spending of more than 600 companies during the 1991-1992 recession and found that companies that increased their advertising spending during the recession had higher sales and market share growth compared to those that cut back.
So why do companies that increase their marketing during a recession tend to perform better? There are a few reasons. First, a recession can actually be a great time for companies to increase their market share. With many businesses cutting back on their marketing, there is less competition for consumers' attention. This can give companies the opportunity to reach more potential customers and potentially steal market share from their competitors.
Second, marketing during a recession can help to build brand loyalty. Consumers are often looking for value during a recession, and companies that continue to market themselves and offer good deals and promotions can earn the loyalty of consumers who are looking to stretch their budgets. This can lead to long-term customer relationships that can pay off even after the recession is over.
Finally, marketing during a recession can help to maintain a company's presence in the market, small or large. Even if a company is not able to increase its sales during a recession, maintaining a consistent marketing presence can help to keep the brand top of mind with consumers. This can make it easier for the company to bounce back once the economy recovers.
In conclusion, while it may be tempting to cut back on marketing during a recession, research has shown that this can be a mistake. Companies that maintain or increase their marketing efforts during a recession tend to perform better in the long run, with higher sales and market share growth. So, if your brand is facing a downturn in the economy, now may be the time to ramp up your marketing efforts and position yourself for success in the future.
Check back for Part 2 next Wednesday!
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