By Susan Akbarpour
Fall 2002

Advertising in Recesion

One of the most valuable things in our society is knowledge. Knowledge is what makes one different from the other.  But the other side of the "knowledge" coin is "how can you teach me?"   In today’s competitive market, advertising is the way that you teach people to look at your product, services or even your brand. The more aggressioipve you are in marketing and advertising, the more graduates you will have from your “school”.

Is it Cake or icing? In many business circumstances, advertisements are like icing and deals are like sour cakes. In the other words, sweet words water your mouth and that makes you sign the order. Do we look at the icing or are we more concerned about the cakes? Customers are sometimes agitated with icings more - that is why advertisement sells! Some second-class products sell better than award winning inventions because of the icing. That is what marketing is for. The dilemma is that the average person on the street is willing to pay a premium for an ordinary cake with beautiful icing on it. That is life! On the other hand, you must ask yourself how your customers to know you have an award winning product. Did you give them that “knowledge” or are you waiting that your product to sell itself? Don’t let them to sell their icing while your cake is growing mildew!

But, what should our reaction be to the recession? Should we cut our advertising budgets? Should we wait to see what will happen to this damn market? How about our competitors? Do they continue pushing the market to substitute our products with theirs?

In a study of U.S. recessions, McGraw-Hill Research analyzed 600 companies from 1980 to 1985 and concluded that at the end of 1985, "…firms that had maintained or increased their advertising during the 1981-1982 recession could boast an average sales growth of275%over the preceding five years. Those who cut advertising realized a paltry increase of only 14%."

In spite of this overwhelming evidence, many companies are still tightening their belts, and the marketing budget is typically an early casualty. This is a mistake for two primary reasons:
First, if you reduce spending on marketing, you will reduce the number of new customers. Direct marketing in niche markets drives direct sales and it’s cheaper and more effective. And consistent brand presence is critical to keeping - and increasing - customer loyalty and prospect awareness. Fewer customers' equals  less  income.

Second, it is much easier to gain ground against competitors who have cut back on marketing, who drop below buyer radar as a result of decreased market presence. If you and your current competitors scale back your marketing, you may find a competitor you didn't know existed come from behind to take over your market. 

Don’t let your competitor sell. Your  " cutback "  refrigerator can’t keep the cake forever!

Susan Akbarpour
Fall -2002