Marketing Strategies in Recession
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[1] It outlines three key strategies: streamlining product portfolios, improving affordability, and bolstering customer trust. [2] Some recommendations include reducing complex product lines, offering discounts and loyalty programs, and reassuring customers through empathetic messaging. [3] The presentation argues that cutting costs indiscriminately can be counterproductive, and that marketers must understand shifting consumer behaviors and priorities to respond effectively to the "New Normal" brought on by recessions.
Marketing Strategies in Recession
- 1. Rethinking Marketing: Strategies In A Downturn Presented By: Jatin Vaid Assistant Professor MAIMS
- 2. 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
- 3. How organizations respond to patterns in Consumer 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 Expenditure Jatin Vaid
- 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 Organization Jatin Vaid
- 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. 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 Skepticism Jatin Vaid
- 7. The Challenge RETHINKING MARKETING Jatin Vaid
- 8. Understand New Customer Segments (Considering customer’s Psychology and Reactions to economic environment) • 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 Stuffs Jatin Vaid
- 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 Expendables Jatin Vaid
- 10. Consumer Segments’ Changing Behavior Jatin Vaid
- 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. 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. Tailoring Your Tactics Jatin Vaid
- 14. Strategies For Marketing Throughout A Recession Streamlining Improving Bolstering Product Affordability Trust Portfolios Jatin Vaid
- 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 costs Jatin Vaid
- 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 sizes Jatin Vaid
- 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 money Jatin Vaid
- 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. jatinvaid@gmail.com THANK YOU!! FOR BEING SUCH A WONDERFUL AUDIENCE Jatin Vaid