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HOW WILL SHOPPING CHANGE BETWEEN NOW AND 2015?

INCREASED MARKETING SPEND IN A RECESSION?

WHY DO SHOPPERS WASTE 80% OF THEIR TIME INSTORE?

FEATURED INSTORE MEDIA


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THE VOICE OF INSTORE
August 2008

	SHOULD YOU INCREASE YOUR MARKETING BUDGET IN A RECESSION?

79% of FMCG companies whose turnovers are greater than $1billion maintained their budgets in 2008 with close on 50% increasing their budgets for this period.

82% intend to maintain these increased budgets in 2009: 34% of them intend increasing their budgets even more, whilst 49% intend to keep their budgets as is.

This is according to the International 2009 Trends Report (www.instoremarketer.org) which asked marketers about the role of POP in their budgetary planning, their reasons for using POP and of course, the sort of research insights shaping their activities instore.

Insights gained from reviewing Advertising on the Edge by The Economist clearly answers this question for us. Most of us are inclined to cut budgets during tight times, assuming of course that this is a good short-term fix and that no lasting damage will come out of this budget cut. The sad reality, though, is that this is not true.

With budget cuts, there are lasting damages and marketing during the economic downturn is in fact part of the solution, NOT the problem.

Secondly, what you sacrifice now with budget cuts, you pay for later. CMO of Tata Sky, Vikram Mehra, said: “If I stop advertising for two months, sales won’t drop, but they will be hit three or four months down the line. People tend to make this mistake in recession. IT IS THE WRONG TIME TO CUT.”

Could this be proven? Definitely.

Long Term Case Study

So, in effect, short-term benefits do have long-term risks. We love the analogy of M&C Saatchi Europe’s Worldwide CEO Moray MacLennan,who said in How to get ahead in a recession, “If you turn off the engines of a plane flying at 36 000 ft, it does not drop out of the sky. Indeed, as far as the pilot and passengers are concerned, life continues as normal with the plane gradually losing altitude…It’s exactly the same with brands…”

If they are not reminded of the intrinsics of your brand which are in their selection criteria, how will they remember to buy your brand?

It is for this reason that there are brand owners who have increased advertising of their brands in times of recession, when competitors are cutting back. These brand owners invariably improved their market share as well as ROI at lower cost during good economic times.

Take good ol’ WK Kellogg, who continued to market cereals whilst all his rivals were cutting back during the Great Depression. Results? He pulled ahead of “Post Cereals in sales, a change that has never been reversed” globally. (The Economist – Advertising on the Edge)

It does start with a budget though…the question is which strategy will you follow? Will you cut now and suffer later, or increase now and reap the rewards BOTH NOW and LATER!

To find out more about 2009 POP Trends

Vegas

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