marketing strategies in recession
DESCRIPTION
How to market in a downturn/ recessionTRANSCRIPT
Rethinking Marketing: Strategies In A DownturnRethinking Marketing: Strategies In A DownturnPresented By:
Jatin VaidAssistant ProfessorMAIMS
Jatin Vaid
Recession??Recession??
“Great leaders know that how they fight a war often decides whether they will win the peace”
• Crisis marks an inflection point: The world after it is unlikely to resemble the one before it. Marketers must remake their organizations to cope with the “New Normal”
CEOs are like generals in the heat of battle, are so busy tackling short term priorities that the future is obscured by the fog of war
Jatin Vaid
How organizations respond to patterns in Consumer Behavior?How organizations respond to patterns in Consumer Behavior?
Jatin Vaid
What’s Wrong in Cutting Costs?What’s Wrong in Cutting Costs?
Indiscriminate Cost Cutting
Employees approach decision making through a loss minimizing lens
Leads organizations to
aim Low
Inefficient Operations
Lower Quality
Reduced Customer
Satisfaction
Pessimism permeates the Organization
Jatin Vaid
The Elusive Balance The Elusive Balance
Put Customer Needs Under The Microscope
Take a Scalpel rather than a Cleaver to Marketing Budget
Nimbly adjust strategies and product offerings.
Jatin Vaid
Understanding Recession PsychologyUnderstanding Recession Psychology
• Discretionary Disposable Income• Confidence about the future• Trust in Business and Economy• Lifestyles and values encouraging consumption
Consumer Buying
• Eroding Confidence and Buying Power• Fundamental and Permanent Adjustments in
Consumer Behavior
Bad Economic News
• Piles of bills• Stagnant or Falling Incomes• Corporate Scandals• Failures in Finance Sectors• Taxpayers’ Bailout of Mismanaged Business• Customer Distrust and Skepticism
Aftermaths
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RETHINKING MARKETINGRETHINKING MARKETINGThe Challenge
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Understand New Customer Segments(Considering customer’s Psychology and Reactions to economic environment)
Understand New Customer Segments(Considering customer’s Psychology and Reactions to economic environment)
• Most Vulnerable• Hardest hit financially• Reduce Spending
• Tend to be resilient and optimistic for long run
• Economize but less aggressively
• Largest Segment
• Feel secure• Consume at near pre-
recession levels• Little selective about
purchases• Top 5% Income
Bracket
• Carries on with purchases as usual
• Unconcerned about savings
• Urban and Young• More likely to rent
than to own• Spend on XP rather
on Stuffs
The Slam – on – the -Brakes
Pained But
Patient
Comfortably Well -
Off
Live for Today
Jatin Vaid
Product CategoriesProduct Categories
Essentials •Central to customer’s well-being
Treats •Indulgences, whose immediate purchase is justified
Postponables •Desired items, whose purchase can be reasonably put off
Expendables •Perceived as unnecessary or justified
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Consumer Segments’ Changing BehaviorConsumer Segments’ Changing Behavior
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Managing Marketing InvestmentsManaging Marketing Investments
Loyal customers are the primary source of cash flow and organic growth
Marketing isn’t optional, it is essential to revenue generation
Distinguishing between necessary and wasteful
Build and maintain STRONG BRANDS – ones that customers recognize and trust
Cut loose poor performers and eliminate low – yield tactics
Case by case Recommendations to Cut, Hold Steady or Increase.
Jatin Vaid
How to go about it?How to go about it?
• Strategic assessment of all brands• Customer segmentation• Maintain relevance to ‘Core Customers’
Assess Opportunities
• Don’t panic or alter a brand’s fundamental positioning
• Remind customers how the brand matters• Increase ‘Share of Voice”• Continue investing in ‘Marketing Research’
Allocate for the Long-Term
• Shrink advertising budget on broadcast media• Grow on media with more measurable results: Direct
Marketing campaigns, Online Ads and Point – of Purchase Marketing
• Customer’s migration to online social media: Facebook, Linkedin, Twitter.
Balance the Communication Budget
Jatin Vaid
Tailoring Your TacticsTailoring Your Tactics
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Strategies For Marketing Throughout A RecessionStrategies For Marketing Throughout A Recession
Streamlining Product Portfolios
Improving Affordability Bolstering Trust
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Strategy 1: Streamline Product PortfolioStrategy 1: Streamline Product Portfolio
Reduce complexity in product lines featuring too many marginally performing sizes and flavours
Encourage innovations in core product improvement
Realignment with market conditions
Efficient allocation of marketing costs
Jatin Vaid
Strategy 2: Improve AffordabilityStrategy 2: Improve Affordability
Businesses compete on price
Discounts, cash-backs at POS, better than delayed value propositions
Carefully monitor consumer’s perception of ‘normal price levels’
Premium brands shouldn’t move down market; rather introduce a “Fighter Brand”
Configure “Key Retail Price Points”
Reducing item or serving sizes
Jatin Vaid
Strategy 3: Bolster TrustStrategy 3: Bolster Trust
Customers seek familiar, trusted brands as a safe choice in trying times
Reassuring messages, reinforcing an emotional connect with the brand
Demonstrate empathy
Loyalty programs rewarding small but frequent purchasers
Educate customers on how to shop smart and save money
Jatin Vaid
..
“It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change”- Charles Darwin.
Jatin Vaid
THANK YOU!!FOR BEING SUCH A WONDERFUL AUDIENCE
THANK YOU!!FOR BEING SUCH A WONDERFUL AUDIENCE