Prospering in a Down Economy, Part 2
Posted on March 6, 2009 | Permalink
BY Lane Casteix
When the economy goes bad often the first thing that businesses do is reduce advertising and marketing budgets, which is about the worst move they can make. A down economy is a time of opportunity, a chance to steal business from your competitors who are reducing their marketing efforts. It is a chance for you to improve your position in the market.
Diageo, a world leader in beverage alcohol, is indeed downsizing and reducing waste, but they see this economy as a chance to build share of market. They are indicating that they do not intend to reduce marketing efforts for their brands but will seize the moment to build an even stronger market position. I suspect other savvy bev/alc producers will do the same.
Yes, I have heard the old saw that beverage alcohol is immune to a bad economy, but that is not really true. Consumers will reduce their consumption and shift to lower priced products as they tighten their own economic belts. That means beverage alcohol producers are at risk of losing business if their portfolios are too reliant on the very high end of the scale, or if they withdraw marketing efforts and allow competition to steal business.
This same principle applies to other businesses. Indeed, businesses need to carefully watch spends and reduce costs wherever possible, but withdrawing marketing efforts is a recipe for disaster.