Published in Philippine Daily Inquirer Business Friday, July 18, 2008
BUSINESS CASE STUDIES have documented how marketing remains important not only during periods of abundance but more so, in periods of shortages. However, the challenge remains with the marketer to communicate the right message for the opportunity.
Below are eight ways to market during inflation.
Choose your target market and stay with them
Economic shortage is a period of restriction for all â€“ the business owner and the consumer. Thus, both parties need to prioritize. The business owner is compelled to allocate and prioritize resources well and manage these efficiently. The consumer allocates limited cash and credit resources to what is perceived to be important and of value. The business owner should devote the limited resources to a market that it can best serve while remaining a profitable segment. The consumer makes the choice for a company that best understands and serves his needs in uptimes and most specially, in downtimes.
Focus on your user market
Now is the best time to know and serve well your loyal customers, assuming there is sufficient critical mass to sustain your business during the shortage. When marketing resources are severely restricted and expansion is not a viable option, knowing and understanding what incremental value is among your loyal customers can go a long way in sustaining demand.
Develop an economic story behind your brand
An economic story need not be limited to a price reduction. Other substantive ways that generally build consumer goodwill include emphasizing the productâ€™s value, extending product usage and communicating efficiency of use. For example, the increase in fuel price has led most consumers to resort to extensive use of public transportation, walking, cycling, etc â€“ all resulting in less use of petroleum. Fuel companies react by immediately dropping the local rate when global markets permit but the change in pricing is not enough to regain demand from lost customers unless fuel efficiency can be communicated in more meaningful consumer terms.
Market brands as an economic investment
Beauty, health and personal care products remain a priority in the wish list of consumers. To convert this wish list into consumer action despite economic adversity is a challenge for the marketer. What is telling is however, based on a February 28 Global Nielsen Consumer Report on Consumer confidence, concerns and spending intentions is how economy (1), health (2) and job security (3) are the three biggest areas of concern for consumers globally. Directionally, beauty, health and personal care products can be marketed as an economic investment i.e. if one is flawless, one has better chances over another assuming physical appearance is a major criteria for recruitment; if one is healthy, then one is likely to be more productive, etc.
Capitalize on opportunity loss
Whether habitual or occasional, people are generally self-indulgent.
Nonetheless, if one is marketing an indulgent product in a period of economic crisis, this does not mean that one can only expect a business decline. It is also unwise to assume that the business will be unaffected due to the likelihood that majority of its present consumers are from the affluent market. In a period of economic crisis, even the rich will think twice about conspicuous spending. Thus, emotional messages can establish a powerful connection with indulgent consumers. For example, a sense of lost opportunity may be a strong call of action. Losing the opportunity to buy can become devastating for indulgent consumers. Sometimes it can be a perpetually regrettable decision. But the joy that one can derive from the indulgent action is immeasurable. Or one can bank on socially responsible messages while encouraging consumption among the wealthy.
Grab the economic opportunity
In an economic crunch, some turn out losers, others are automatic winners. Such is the opportunity presented by a changing environment. Small, fuel-efficient cars suddenly become the obvious choice over gas-guzzling luxury cars; canned seafood and vegetables over fresh, meat, pork and chicken; mass transportation over private transportation, among others.
Cut the losses with ineffective trade channels
The economic downturn is perfect timing to cut down trade channels that have not been working even during good times. Cutting down what has been a losing proposition anyway can divert resources to more substantive marketing investments that is likely to help the company once the economic slump has been hurdled.
Maintain if not expand marketing communications
The more successful marketing companies have maintained if not grown their marketing communications investments during periods of economic crisis. Provided these brands have a real, good story to tell, the more progressive companies continue to put in their investment, reaping the benefits not only during downtimes but also when economic stability returns. This is because the brand remains in the consciousness of consumers not only in the present turbulent times but when
favorable economic activity is back in place.
Economic shortages are times of trial for many marketers. But it also presents an opportunity for more progressive-thinking, resourceful and enterprising business owners and marketers.
Eight ways to market during inflation
1. Choose your target market and stay with them.
2. Focus on your user market.
3. Develop an economic story behind your brand.
4. Market brands as an economic investment.
5. Capitalize on opportunity loss.
6. Grab the economic opportunity.
7. Cut the losses with ineffective trade channels.
8. Maintain, if not expand, marketing communications.