The global economy has already moved into recession. Reading business dailies has become akin to watching horror movies. Predictions about job losses and credit crunch makes one nervous about the near future.
Lot of bloodshed happening in United States, the reverberations of problems in the World's largest economy is bound to hurt many countries including India. Much of the problems are happening in the financial sectors but analysts are predicting that consumer markets are going to face the music in the near future.
The next three quarters are going to give marketers sleepless nights. For the past one decade, Indian marketers were facing a vibrant consumer markets which was heavily supported by an aggressive credit market. Banks were luring consumers with loans and prompting them to buy as if the world ends with in one year.
The euphoria is slowly dying down and the credit crunch is going to take a toll on the consumer market also. Housing markets are already facing the heat.
So what should a marketer do in times of recession.
Time to introspect :
Recession is a good period for marketers to take an objective look at their brand portfolio. When there is euphoria, value takes a backseat and consumers indulge. When the time goes tough, consumers tighten their purse strings and value comes to the driving seat.
This is the time to see which brand in your portfolio offers more value to the consumer. If your sales are going down like hell , its the time to re-engineer the brand's value proposition.
Invest in brands
Usually the initial reaction by marketers in respond to recession is to cut marketing cost. On the contrary its time to invest in brands. You will be heard when all others are shutting their marketing mouths . Bargain with the media for the rates and invest in building your brand.
Seth Godin says its an opportunity of a lifetime
Be a paranoid
India is not yet in a recession but this is the time marketers should be paranoid about recession. Only those brands will survive who is prepared for a recession even during the sunny days. So meet your brand managers and ask them what to do when India moves into recession. Have plan B, C D and E ready.
If India does not move into recession, thats a great news. If it does, then your brand will be ready.
Cut Costs
Even if you are selling a premium brand, cut costs like hell. Cut costs and not investments. Invest in your brand, put lot of advertisements but cut cost in media, raw materials etc. Strive to lower your brand's break-even points to new lows.
Partner your stakeholders
You may not be able to survive recession on your own. So partner your stakeholders be it your lenders or customers or employees or your channel partners. Create an ecosystem of trust and kinship and face the downturn together. It will be worth it.
Trade Up or down
Super Luxury brands are often less affected by the downturn. Those who can afford a Merc is not going to buy a Maruti 800. Its those brands aiming at the middleclass who are going to be hit by the downward slide.
So if your brand is somewhere in between super luxury and low-priced, its time to get into the drawing board. Remember Walmart makes more money during the recession than during good-times.
Listen to your customers
Your customers will tell you how to beat recession. Only thing is that you have to ask them. Atleast understand them . So when customers starts tightening their purse, you can do that too. Also they will tell you how much they can pay you. Listen to that and do it.
I agree that its more risky to invest in new products during recession times, if you cannot ,then cut your cost. If your company is the lowest cost producer then you have a better chance of survival.
Lot of bloodshed happening in United States, the reverberations of problems in the World's largest economy is bound to hurt many countries including India. Much of the problems are happening in the financial sectors but analysts are predicting that consumer markets are going to face the music in the near future.
The next three quarters are going to give marketers sleepless nights. For the past one decade, Indian marketers were facing a vibrant consumer markets which was heavily supported by an aggressive credit market. Banks were luring consumers with loans and prompting them to buy as if the world ends with in one year.
The euphoria is slowly dying down and the credit crunch is going to take a toll on the consumer market also. Housing markets are already facing the heat.
So what should a marketer do in times of recession.
Time to introspect :
Recession is a good period for marketers to take an objective look at their brand portfolio. When there is euphoria, value takes a backseat and consumers indulge. When the time goes tough, consumers tighten their purse strings and value comes to the driving seat.
This is the time to see which brand in your portfolio offers more value to the consumer. If your sales are going down like hell , its the time to re-engineer the brand's value proposition.
Invest in brands
Usually the initial reaction by marketers in respond to recession is to cut marketing cost. On the contrary its time to invest in brands. You will be heard when all others are shutting their marketing mouths . Bargain with the media for the rates and invest in building your brand.
Seth Godin says its an opportunity of a lifetime
Be a paranoid
India is not yet in a recession but this is the time marketers should be paranoid about recession. Only those brands will survive who is prepared for a recession even during the sunny days. So meet your brand managers and ask them what to do when India moves into recession. Have plan B, C D and E ready.
If India does not move into recession, thats a great news. If it does, then your brand will be ready.
Cut Costs
Even if you are selling a premium brand, cut costs like hell. Cut costs and not investments. Invest in your brand, put lot of advertisements but cut cost in media, raw materials etc. Strive to lower your brand's break-even points to new lows.
Partner your stakeholders
You may not be able to survive recession on your own. So partner your stakeholders be it your lenders or customers or employees or your channel partners. Create an ecosystem of trust and kinship and face the downturn together. It will be worth it.
Trade Up or down
Super Luxury brands are often less affected by the downturn. Those who can afford a Merc is not going to buy a Maruti 800. Its those brands aiming at the middleclass who are going to be hit by the downward slide.
So if your brand is somewhere in between super luxury and low-priced, its time to get into the drawing board. Remember Walmart makes more money during the recession than during good-times.
Listen to your customers
Your customers will tell you how to beat recession. Only thing is that you have to ask them. Atleast understand them . So when customers starts tightening their purse, you can do that too. Also they will tell you how much they can pay you. Listen to that and do it.
I agree that its more risky to invest in new products during recession times, if you cannot ,then cut your cost. If your company is the lowest cost producer then you have a better chance of survival.
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