Marketing during recession - are you smart enough?

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Bikky Khosla | 21 Apr, 2009
Even during the best of times companies, particularly small and medium enterprises (SMEs), find it difficult to market their products. But now that the economy is in recession, things have become even more difficult. Demand for products is at an all-time low and finding buyers is also becoming fast difficult.

However, smart companies still have their hands full with orders. Many SME holders I have met in the last couple of months have asked me the same question: How are they getting orders while we are not? And the answer is simple. They have acted smartly and made adjustments in their marketing plan in accordance with the changing market demand. They know that marketing during recession calls for the realisation that the needs of customers or buyers change and thus strategies suited to the new reality should be adopted.

During recession it becomes a necessity for any company to thoroughly research the customer. Instead of cutting the market research budget, one needs to know how buyers are redefining value and responding to the recession.

Contrary to what people might say, recession is not the time to cut advertising. It is a fact that companies that increase advertising during recession, when competitors are cutting back, can improve their market share and returns on their investment than during good economic times.

It is also essential to make adjustments in one's product portfolios while marketing during recession. Tough times usually favour multi-purpose goods over specialized products. So weaker items in product lines should be pruned or should take the backseat while preparing a marketing strategy.

Pricing tactics too need to be made according to market realities. Buyers during recession will be looking for the best deals. Although marketing during recession does not necessarily mean cutting down prices, one may need to offer more price promotions, extend credit to long-standing customers, and market value-added after-sales services or warranties more aggressively.

In tough times, price cuts attract more consumers and a price elasticity can help. Buyers during recession take more time searching for the products and will also negotiate harder to get the best deals. They are more willing to postpone purchases, or even buy less. So SMEs need to give them a price that they can't resist.

I think it is a good period for us to take an objective look at our marketing plan and the products line before we approach a buyer.