Rethinking Marketing: Strategies In A DownturnRethinking Marketing: Strategies In A DownturnPresented By:

Jatin VaidAssistant ProfessorMAIMS

Jatin Vaid

Recession??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

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How organizations respond to patterns in Consumer Behavior?How organizations respond to patterns in Consumer Behavior?

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What’s Wrong in Cutting Costs?What’s Wrong in Cutting Costs?

Indiscriminate Cost Cutting

Employees approach decision making through a loss minimizing lens

Leads organizations to

aim Low

Inefficient Operations

Lower Quality

Reduced Customer

Satisfaction

Pessimism permeates the Organization

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The Elusive Balance 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.

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Understanding Recession PsychologyUnderstanding Recession Psychology

• Discretionary Disposable Income• Confidence about the future• Trust in Business and Economy• Lifestyles and values encouraging consumption

Consumer Buying

• Eroding Confidence and Buying Power• Fundamental and Permanent Adjustments in

Consumer Behavior

Bad Economic News

• Piles of bills• Stagnant or Falling Incomes• Corporate Scandals• Failures in Finance Sectors• Taxpayers’ Bailout of Mismanaged Business• Customer Distrust and Skepticism

Aftermaths

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RETHINKING MARKETINGRETHINKING MARKETINGThe Challenge

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Understand New Customer Segments(Considering customer’s Psychology and Reactions to economic environment)

Understand New Customer Segments(Considering customer’s Psychology and Reactions to economic environment)

• Most Vulnerable• Hardest hit financially• Reduce Spending

• Tend to be resilient and optimistic for long run

• Economize but less aggressively

• Largest Segment

• Feel secure• Consume at near pre-

recession levels• Little selective about

purchases• Top 5% Income

Bracket

• Carries on with purchases as usual

• Unconcerned about savings

• Urban and Young• More likely to rent

than to own• Spend on XP rather

on Stuffs

The Slam – on – the -Brakes

Pained But

Patient

Comfortably Well -

Off

Live for Today

Jatin Vaid

Product CategoriesProduct Categories

Essentials •Central to customer’s well-being

Treats •Indulgences, whose immediate purchase is justified

Postponables •Desired items, whose purchase can be reasonably put off

Expendables •Perceived as unnecessary or justified

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Consumer Segments’ Changing BehaviorConsumer Segments’ Changing Behavior

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Managing Marketing InvestmentsManaging 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

How to go about it?How to go about it?

• Strategic assessment of all brands• Customer segmentation• Maintain relevance to ‘Core Customers’

Assess Opportunities

• Don’t panic or alter a brand’s fundamental positioning

• Remind customers how the brand matters• Increase ‘Share of Voice”• Continue investing in ‘Marketing Research’

Allocate for the Long-Term

• Shrink advertising budget on broadcast media• Grow on media with more measurable results: Direct

Marketing campaigns, Online Ads and Point – of Purchase Marketing

• Customer’s migration to online social media: Facebook, Linkedin, Twitter.

Balance the Communication Budget

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Tailoring Your TacticsTailoring Your Tactics

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Strategies For Marketing Throughout A RecessionStrategies For Marketing Throughout A Recession

Streamlining Product Portfolios

Improving Affordability Bolstering Trust

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Strategy 1: Streamline Product PortfolioStrategy 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

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Strategy 2: Improve AffordabilityStrategy 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

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Strategy 3: Bolster TrustStrategy 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

..

“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

THANK YOU!!FOR BEING SUCH A WONDERFUL AUDIENCE

THANK YOU!!FOR BEING SUCH A WONDERFUL AUDIENCE

jatinvaid@gmail.com