- By John Rose
- Nov. 25 2008 00:00
There are three main opportunities for marketing during a recession.
Opportunity No. 1: Customers generally re-evaluate their brand loyalties during a recession. It is no longer business as usual. Many people will be looking for greater value as their buying power weakens. A recession breaks down barriers that make consumers otherwise resistant to new brand messages. This creates an opportunity for brands that have otherwise been unable to capture significant market share in a crowded category or one dominated by a larger competitor. If you are the No. 2, 3 or 4 brand in your market category and you have a good story to tell, this could be your best opportunity in years to relate your story and receive a positive reception. Reacting to the last financial crisis, Mobile TeleSystems continued advertising, while its competitor Beeline retreated. As a result, MTS substantially raised its subscriber base and overtook, Beeline, to become the top Russian mobile service provider. And MTS still retains the No. 1 spot today, despite Beeline's ubiquitous advertising campaign.
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Opportunity No. 3: Customers expect a deal during a recession. People know companies are under pressure and will expect them to react to the recession with superior products, special offers and better service to win their business or get them to buy. You don't want to disappoint them. But unless you run a volume business where you plan to always be the price leader, you shouldn't feel obliged to lower your prices to win business during a recession. Sure, discounts will move inventory today, but it may come at a high cost in the future through the loss of brand value. The key is to give your customers more rather than charge them less. Value is most important, not price. Expand product features, extend warranties, provide special financing terms and offer enticing rewards for becoming loyal to your superior brand. Electronics retailer M-Video owes much of its success to creative promotions it began during the last crisis to lure customers and build loyalty, which is a practice they continue to this day. Currently, together with Sony Ericsson, they are giving away a card that provides free cinema tickets for one year when you buy select mobile phones. Their customers will be escaping the Russian recession to Hollywood -- at least in their imaginations -- and will no doubt reward the company with loyalty and future purchases.
It's easier, of course, to follow the market and do what the other guys are doing during a crisis -- that is, very little. But with a better understanding of the short window of opportunity brought on by a crisis -- plus a little chutzpah -- your company could use this recession to build a stronger brand and a more profitable business in the near future, when Russia bounces back.
John Rose is founder of Rose Creative Strategies in Moscow.