Cutting marketing investments can often turn a short-term problem into a long-term issue
Use a “sniper” approach to cost cutting. Once companies understand exactly how the recession is affecting their core customers, they are in the position to identify with precision the kinds of marketing investment that generate value and should be protected, and those that may be dispensed with. Indiscriminate cuts across the board can destroy value in the long term and should be avoided. To understand what marketing activities may be scaled down and which ones should be strengthened, it may be necessary to focus on the two or three things that truly matter to customers (for instance product features, service, availability, price, et al).
Promotion and low pricing strategies should be employed wisely. Sales promotions and price cuts can be useful in a downturn to stimulate demand. However, they should be used only if they are consistent with the positioning of the brand. Short-terms sales volume and revenue should be balanced wisely against long-term brand strength. In the end, the best strategy for a strong brand might be to continue to reinforce the attributes that make it appealing and unique in the eyes of the consumers. A strong emotional bond between the customer and the brand, for example, can still provide the most effective defence from market forces.
Deal with the short-term challenges, but also manage for the long term. Reducing marketing spending aggressively, or ignoring the role of marketing in building long-term shareholder value is clearly not the way forward. Unfortunately, cutting marketing investments indiscriminately can often turn what may be a short-term problem into a long-term issue. Advertising for brand-building, for example, can take a long time to bear any fruit. The immediate benefits of a cut in marketing spend may hide the more insidious long-term effects if support is withdrawn from the brand. In the end, evidence suggests that the strongest brands are those that receive sustained support over time, even in times of crisis.
Use a “sniper” approach to cost cutting. Once companies understand exactly how the recession is affecting their core customers, they are in the position to identify with precision the kinds of marketing investment that generate value and should be protected, and those that may be dispensed with. Indiscriminate cuts across the board can destroy value in the long term and should be avoided. To understand what marketing activities may be scaled down and which ones should be strengthened, it may be necessary to focus on the two or three things that truly matter to customers (for instance product features, service, availability, price, et al).
Promotion and low pricing strategies should be employed wisely. Sales promotions and price cuts can be useful in a downturn to stimulate demand. However, they should be used only if they are consistent with the positioning of the brand. Short-terms sales volume and revenue should be balanced wisely against long-term brand strength. In the end, the best strategy for a strong brand might be to continue to reinforce the attributes that make it appealing and unique in the eyes of the consumers. A strong emotional bond between the customer and the brand, for example, can still provide the most effective defence from market forces.
Deal with the short-term challenges, but also manage for the long term. Reducing marketing spending aggressively, or ignoring the role of marketing in building long-term shareholder value is clearly not the way forward. Unfortunately, cutting marketing investments indiscriminately can often turn what may be a short-term problem into a long-term issue. Advertising for brand-building, for example, can take a long time to bear any fruit. The immediate benefits of a cut in marketing spend may hide the more insidious long-term effects if support is withdrawn from the brand. In the end, evidence suggests that the strongest brands are those that receive sustained support over time, even in times of crisis.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face
IIPM – FLP (Flexi Learning Program)
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face
IIPM – FLP (Flexi Learning Program)
