Marketing: Surviving the Economic Downturn

It is true, we are now being faced with difficult economic times. This means it's even harder to get the attention of your consumer.

This week alone there were three advertising companies within my area that laid off workers. Is it because a major client pulled their marketing budget? Perhaps clients were not getting the results they desired. Fact is it's difficult in today's economy to come out ahead.

Whether you are an agency working for a major client or a small business trying to survive these difficult times today there has never been a more crucial time to know your consumer.

In an economic downturn you will see changes in three major areas. They include:

• Budget Changes
• Consumer Behavior
• Market Changes

How will you respond to budget changes?
When it comes to budget changes companies typically pull their advertising and marketing budget. Truth is by doing this and reducing communication you are only affecting short term sales, which in return negatively affects profit. Are you sure this is the course of action that you want to take? While this may give short-term relief you will risk losing market share once the economy begins to stabilize and recovery begins. Consider learning to be more cost efficient rather than reducing budgets, in the long run it will save you money.

How will consumer behavior change?
We all know that consumer behavior changes during a recession and in return this affects your bottom line. Your audience will spend less and delay major purchases and even trade down to cheaper alternatives. However, not all consumers stop spending. They will in fact alter their habits to better fit their financial situations, but they will never stop spending. They will lean more into cheaper brands and alternatives for the duration of the slow economic times, but if you maintain brand loyalty they will aspire to regain the ability to purchase the stronger brands in the future.

They will continue to listen and watch for your communication to them. Your communication gears them to justify and stimulate a purchase. If you can develop a lower cost solution, this may just be the time to do so to help maintain that relationship through these difficult times. This will keep them loyal and help to cultivate a stronger relationship in the future.

The majority of larger brands continue to advertise during a recision and continue to see strong sales and revenue. Many of them do not do price cutting, but will develop alternatives that fit more in line with the consumers budget. Consumers are looking for loyalty not a one-night stand. Will you create a solution for them during this difficult time?

How to find market opportunity during this time?
It's true our market changes. We come head to head with price wars, stronger competition and less money in the market. There are however opportunities as well. Consider that media revenue deflates during a recessions which means this may be the time to make your product or service known without the high media expenditure. Your competitors will be cutting their budget spend therefore reducing activity, perhaps it's time to punch yours up and gain a larger market share. The price may just be right.