Marketing Strategies in Recession

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How to market in a downturn/ recession

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Marketing Strategies in Recession

  1. 1. Rethinking Marketing:Strategies In A DownturnPresented By:Jatin VaidAssistant ProfessorMAIMS
  2. 2. Recession??“Great leaders know that how they fight a waroften 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 thatthe future is obscured by the fog of warJatin Vaid
  3. 3. How organizations respond to patterns inConsumer Behavior? Patterns in Consumer Behavior Strict Priorities Reduce Spending Firm‟s Strategy Cut Costs Reduce Prices Postpone fresh investments in Research and Development Lower Head Count Shrink ExpenditureJatin Vaid
  4. 4. What’s Wrong in Cutting Costs? Employees Indiscriminate Cost approach decision Leads organizations Cutting making through a to aim Low loss minimizing lens Inefficient Reduced Customer Lower Quality Operations Satisfaction Pessimism permeates the OrganizationJatin Vaid
  5. 5. 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
  6. 6. Understanding Recession Psychology • Discretionary Disposable Income Consumer • Confidence about the future • Trust in Business and Economy Buying • Lifestyles and values encouraging consumption Bad • Eroding Confidence and Buying Power • Fundamental and Permanent Adjustments in Economic Consumer Behavior News • Piles of bills • Stagnant or Falling Incomes • Corporate Scandals Aftermaths • Failures in Finance Sectors • Taxpayers‟ Bailout of Mismanaged Business • Customer Distrust and SkepticismJatin Vaid
  7. 7. The Challenge RETHINKING MARKETINGJatin Vaid
  8. 8. Understand New Customer Segments(Considering customer’s Psychology and Reactions to economicenvironment) • Most Vulnerable • Tend to be resilient • Hardest hit and optimistic for financially long run • Reduce Spending • Economize but less The Slam – aggressively Pained But on – the - • Largest Segment Patient Brakes Live for Comfortably Today Well - Off • Carries on with purchases as usual • Feel secure • Unconcerned about • Consume at near pre- savings recession levels • Urban and Young • Little selective about • More likely to rent purchases than to own • Top 5% Income Bracket • Spend on XP rather on StuffsJatin Vaid
  9. 9. Product Categories • Central to customer‟s well-being Essentials • Indulgences, whose immediate Treats purchase is justified • Desired items, whose purchase can Postponables be reasonably put off • Perceived as unnecessary or justified ExpendablesJatin Vaid
  10. 10. Consumer Segments’ Changing BehaviorJatin Vaid
  11. 11. Managing 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
  12. 12. How to go about it? • Strategic assessment of all brands Assess • Customer segmentation Opportunities • Maintain relevance to „Core Customers‟ • Don‟t panic or alter a brand‟s fundamental positioning Allocate for the • Remind customers how the brand matters Long-Term • Increase „Share of Voice” • Continue investing in „Marketing Research‟ • Shrink advertising budget on broadcast media Balance the • Grow on media with more measurable results: Direct Marketing campaigns, Online Ads and Point – Communication of Purchase Marketing Budget • Customer‟s migration to online social media: Facebook, Linkedin, Twitter.Jatin Vaid
  13. 13. Tailoring Your TacticsJatin Vaid
  14. 14. Strategies For Marketing Throughout A Recession Streamlining Improving Bolstering Product Affordability Trust PortfoliosJatin Vaid
  15. 15. Strategy 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 costsJatin Vaid
  16. 16. Strategy 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 sizesJatin Vaid
  17. 17. Strategy 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 moneyJatin Vaid
  18. 18. . “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
  19. 19. jatinvaid@gmail.com THANK YOU!! FOR BEING SUCH A WONDERFUL AUDIENCEJatin Vaid

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