How to market in a downturn/ 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