Harvard Business School Professor John Quelch suggests — in a recent issue of the school’s “Working Knowledge for Business Leaders” online newsletter — several factors for companies to keep in mind regarding marketing plans for this year and next.
Three of particular interest to retailers are:
1. Research the customer. More than ever, Quelch says, it is important to know how consumers are responding to the economic downturn . “Consumers take more time searching for durable goods and negotiate harder at the point of sale. They are more willing to postpone purchases, trade down, or buy less. Must-have features of yesterday are today’s can-live-withouts,” he writes. Bottom line: Conspicuous consumption becomes less prevalent.
2. Focus on family values. When economic times are tough, Quelch says, people tend to retreat to their villages. So, he advises, “Look for cozy hearth-and-home family scenes in advertising to replace images of extreme sports, adventure, and rugged individualism.” On the outs, he says, are zany humor and appeals on the basis of fear.
3. Maintain marketing spending. In other words, Quelch says, do not cut your advertising budget. “It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times.” If you must cut marketing spending, Quelch recommends that you try to maintain the frequency of advertisements by shifting from 30-second to 15-second advertisements, substituting radio for television advertising, or increasing the use of direct marketing, which gives more immediate sales impact.