Marketing in a Down Economy or downturn

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Marketing in a down economy, in a downturn, or in a recession. marketing communications and brand building communications are important...

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  • Marketing in a Down Economy or downturn

    1. 1. Marketing in the down economy Reinforce don’t reinvent By Barry Vucsko May 28, 2009 http://rblb.wordpress.com
    2. 2. Marketing in the down economy Marketing’s Fate Intention & Expectation Reinforce don’t reinvent How we process messages Reinforce Don’t reinvent Social Media
    3. 3. Marketing in the down economy.
    4. 4. In an Epsilon study, 94% of CMOs and other marketing execs agreed with the statement: “A tough economic period is precisely the time when marketing plays a key role”
    5. 5. Average tenure for a CMO: 18 months
    6. 6. Marketing’s Fate <ul><li>As unique as this recession/depression is, </li></ul><ul><li>Its result on marketing is, unfortunately, nothing new. </li></ul>
    7. 7. Marketing’s Fate
    8. 8. Marketing’s Fate <ul><li>Cutting back on “non-core” functions--anything that doesn’t </li></ul><ul><li>design, build or distribute the widget </li></ul>
    9. 9. Marketing’s Fate <ul><li>Cut backs on marketing communications (brand strategy, advertising, promotion,…) </li></ul>
    10. 10. Marketing’s Fate <ul><li>Marketing Communications is a lifeline </li></ul><ul><ul><li>How a company announces new products </li></ul></ul><ul><ul><li>How they converse </li></ul></ul><ul><ul><li>How they educate about their products </li></ul></ul><ul><ul><li>How they build their brand </li></ul></ul><ul><ul><li>How they create loyalists </li></ul></ul><ul><ul><li>How they understand their customers </li></ul></ul>
    11. 11. Marketing’s Fate <ul><ul><li>Marketing Communications is a conversation, cut it short and customers will forget what you were saying </li></ul></ul>
    12. 12. Intention and Expectation <ul><li>Intention: Your customer’s desire or need to </li></ul><ul><li>buy your products. </li></ul><ul><li>Expectation: What they think about, or expect </li></ul><ul><li>from, your product. Expectation is BRAND. </li></ul>
    13. 13. Intention is Waning <ul><li>This economy is killing or changing intent. </li></ul><ul><li>Customers are tuning off </li></ul><ul><li>They’re in saving mode </li></ul><ul><li>They’re looking for alternate (often cheaper) solutions </li></ul><ul><li>Putting things on hold (“wait and see” attitude) </li></ul>
    14. 14. Four Types of Intent <ul><li>Status Quo Intent </li></ul><ul><li>Price Competitive Intent </li></ul><ul><li>Postponed Intent </li></ul><ul><li>No Intent </li></ul>
    15. 15. Expectation is BRAND <ul><li>The more customers expect of a brand the more supported that brand becomes. </li></ul>
    16. 16. Expectation is BRAND <ul><li>Customers expect things based on: </li></ul><ul><ul><li>Brand History </li></ul></ul><ul><ul><li>Brand Promise </li></ul></ul><ul><ul><li>Brand’s relation to its competition </li></ul></ul><ul><ul><li>Marketing Communications </li></ul></ul>
    17. 17. Marketing Communications builds expectation <ul><li>Decreasing marketing communication </li></ul>Decreases expectation
    18. 18. Intention/Expectation Equation <ul><li>Waning Intention </li></ul><ul><li>+ </li></ul><ul><li>Reduced Expectation </li></ul><ul><li>= </li></ul><ul><li>-(I)+-(E)= </li></ul>
    19. 19. Intention/Expectation Equation -(I)+-(E) =
    20. 20. Reinforce don’t reinvent
    21. 21. How we process marketing messages <ul><li>Most psychologists and educators espouse that we learn new things by relating them to past things. </li></ul><ul><li>When brands reinforce their message, they are aligning past and present </li></ul><ul><li>This alignment strengthens the brand and creates reference points. </li></ul>
    22. 22. How we process marketing messages Brand Messaging Short-term Memory Long-term Memory Store Product Evaluation Beverage Soft Drink Coke Pepsi, 7Up Stored as “networks” of associations ST activates LT store based on frequency, recency and elaboration *Sternthal & Lee, 2005 Northwestern University Expectation
    23. 23. Our minds are like old buckets.
    24. 24. Brand communications fill those buckets
    25. 25. Customer expectation IS your brand. They increase expectation.
    26. 26. If you don’t fill them they go dry The wood cracks They get kicked over People use them as a place to store mops, sponges and dirty rags Buckets leak.
    27. 27. <ul><li>It takes a lot to fix and fill that bucket. </li></ul>
    28. 28. <ul><li>Acquiring new customers can cost 5 times more than satisfying and retaining current ones. </li></ul>Murphy & Murphy, 2002, Leading on the Edge of Chaos
    29. 29. <ul><li>A 2% increase in customer retention has the same effect on profits as cutting costs by 10%. </li></ul>Murphy & Murphy, 2002, Leading on the Edge of Chaos
    30. 30. <ul><li>A 5% reduction in customer defection rate can increase profits by 25%-125%, depending on the industry. </li></ul>Murphy & Murphy, 2002, Leading on the Edge of Chaos
    31. 31. <ul><li>The average company loses 10% of its customers each year. </li></ul>*Murphy & Murphy, 2002, Leading on the Edge of Chaos
    32. 32. <ul><li>This is not a normal recession. </li></ul>
    33. 33. <ul><li>REINFORCE </li></ul>
    34. 34. Strategic Reinforcement <ul><li>Elaboration of recognizable </li></ul><ul><li>product characteristics and messaging. </li></ul>
    35. 35. Strategic Reinforcement <ul><li>Reinforce where needed most </li></ul><ul><li>Reinforce often </li></ul><ul><li>Reinforce in the same ways </li></ul>
    36. 36. Don’t Reinvent
    37. 37. Don’t Reinvent Waning intent, diminished budgets AND new messaging will harm your brand
    38. 38. NO Porsche Every Day Low Prices
    39. 39. NO Nike Orthopedic Shoes
    40. 40. NO Hershey’s Lager Beer
    41. 41. Don’t Reinvent Reinvention only as a last resort and as a corporate, rather than marketing, strategy
    42. 42. Don’t Reinvent…Unless Dying industries Dying brands Changing technology Changing generations
    43. 43. Stay Connected Don’t stop listening. Know the marketplace Know your customer--research to learn who they are and who they are becoming Know their worth--perform Customer Lifetime Value analysis These will tell you if you need to reinvent.
    44. 44. Tactical Reinforcement—Social Media <ul><li>Social Media </li></ul><ul><ul><li>Blogs </li></ul></ul><ul><ul><li>Networks (Facebook, Mixi, LinkedIn, Twitter etc) </li></ul></ul><ul><ul><li>Wikis </li></ul></ul><ul><ul><li>Forums on existing site </li></ul></ul>
    45. 45. <ul><li>Knowledge Networks survey: </li></ul><ul><li>“ Less than 5% of social media users regularly turn to these sites for guidance on purchase decisions in any of nine product/service categories.” </li></ul>
    46. 46. <ul><li>Knowledge networks survey: </li></ul><ul><li>“The largest percentage, 54%, said that </li></ul><ul><li>“staying connected” is what they like most about social networking sites.” </li></ul>
    47. 47. <ul><li>Bebo.com Blackplanet.com Cafemom.com Classmates.com ClubPenguin.com Del.icio.us Digg.com Facebook.com Flickr.com </li></ul><ul><li>Friendster.com Hi5.com </li></ul><ul><li>Imeem.com Last.fm </li></ul>Live.com LinkedIn.com Livejournal.com Myspace.com Myyearbook.com Ning.com Picasa.com Plaxo.com Reddit.com Reunion.com Tagged.com Twitter.com YouTube.com
    48. 48. How to use social media wisely
    49. 49. <ul><li>Don’t throw tactics at your customer </li></ul>
    50. 50. <ul><li>Social Media should NOT replace advertising. </li></ul><ul><li>It’s a PR tool </li></ul>
    51. 51. <ul><li>Figure out your marketing goals </li></ul>
    52. 52. <ul><li>Can Social Media help you meet these goals? </li></ul>
    53. 53. <ul><li>Know your Social Media users </li></ul><ul><li>Creators </li></ul><ul><li>Critics </li></ul><ul><li>Collectors </li></ul><ul><li>Joiners </li></ul><ul><li>Spectators </li></ul><ul><li>Inactive </li></ul>Li & Bernoff, Groundswell 2008
    54. 54. <ul><li>IF..social media is the right choice… </li></ul>
    55. 55. <ul><li>1. Use it for cheap, easy PR. </li></ul><ul><li>2. Keep the conversation going </li></ul><ul><li>3. Stay on brand </li></ul>How to use social media to reinforce
    56. 56. Right Brain/Left Brain Marketing http: //rblb . wordpress .com How to market in a downturn 2009, Quelch & Jocz for HBR Turning adversity into advantage: Does proactive marketing during a recession pay off? 2005, Srinivasan, Rangaswamy, Lilien Recapturing lost customers 2004, Thomas, Blattberg, Fox Further Reading

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