It surprises me how many businesses are complaining about the recession and how hard it is out there. When I dig a little deeper and ask, “How many routes to market do you have?” most say, “Well we are cutting back to be honest as it’s so tough”. Urmm, good thinking Batman. Let’s think about this for a second; business is especially tough at the moment, so restricting how many people find you is only going to make things worse. The companies that are doing well are generally picking up on their marketing, not cutting back. In fact the history books back this up nicely.
In 1974, one of the world's largest manufacturers of handtools, sensed a softening in demand for its consumer products. So, in the heart of the recession, they launched their biggest advertising campaign, aimed at driving home the Stanley name to the consumer market. Their handtool business has continued to grow at a rate of 8%, twice that of competitors.
And who are Post? Well, they were neck and neck in terms of market share with Kellogg’s. Post decided to tighten their belts and 'survive' the economic environment, Kellogg's however saw this situation as an opportunity to increase their market share. They doubled their advertising budget and launched a new product – Rice Krispies. Kellogg's profits increased by almost 30%, and became the market leader. Post never regained.
I know, I know, these are big brands, but they all started out small, and generally with the same mentality.
In 2001, The Billett Consultancy assessed the implications for advertisers within the then tough economic climate, post 9/11. The report included analysis of 127 brands from 46 product categories, finding that:
- "The highest-performing brands (in terms of market share) had increased their total TV advertising spend by 7%. Average market share rose by 1.1%"
- "The lowest-performing brands had reduced their total TV advertising spend by 8%. Average market share dropped by 1.6%"
So my question therefore is, why sit back and waste a great recession when you could be gaining market share?