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Rethinking Marketing:
Strategies In A Downturn
Presented By:
Jatin Vaid
Assistant Professor
MAIMS
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
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
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
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
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
The Challenge
     RETHINKING MARKETING

Jatin Vaid
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
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
Consumer Segments’ Changing Behavior




Jatin Vaid
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
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
Tailoring Your Tactics




Jatin Vaid
Strategies For Marketing Throughout A Recession




  Streamlining
                   Improving        Bolstering
    Product
                  Affordability       Trust
   Portfolios




Jatin Vaid
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
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
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
.




    “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
jatinvaid@gmail.com
     THANK YOU!!
     FOR BEING SUCH A WONDERFUL
     AUDIENCE
Jatin Vaid

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Marketing Strategies in 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
  • 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