In contrast to popular thought, ‘doing more with less’ is as much about innovative thinking as it is analytics.

– Ruth Saunders, partner, Galleon Blue

Economic slowdown, recession, depression – this evil has many names. But, the question worth pondering is, is it really vicious? It is the time when the credibility of major companies has been shattered. There’s a lot of cynicism and distrust in the world of big institutions, and companies feel the urge to share with people what they really care about.

Marketing activities, in a way sphere head the profit-generating regime of organizations owing to them being the most crucial and at times the only revenue generating department.

In such a scenario, it is imperative to identify and analyse the effects of an economic slowdown on the marketing activities of business houses so as to ameliorate their positions in the market. Now, as far as marketing is concerned, we have come a long way from a ‘caveat emptor’ to a ‘caveat venditor’ phase. In today’s world, where ‘Consumers’ are the ones who rule the roost, an economic slowdown literally means reduction in the purchasing power in the hands of the consumers, ultimately leading to a somewhat slackening in the average spending rate per consumer. Now, the effect that this might have on organizations, is contingent upon factors like the structure, culture, authority, the type of products produced, the industry in which they exist etc. In order to thrive in the industry, companies with a flat growth rate have to adopt a stringent and intense cropping strategies by cutting down on prices, promotions and personnel, heavily. On the other hand, the highly ambitious companies have to diminish their spending on extravagant projects for the time-being, if not permanently. Marketing department is directly dependant on people and hence, any excess spending on innovating new products and services and on R&D should be put on hold. It is advisable for companies to concentrate on their ‘core competencies’ by adopting the tried & tested ways rather than venturing into strange waters. High spending marketing activities including trade shows, hiring high-fi celebrities for advertisements need to be cut down and emphasis should be laid on using online marketing mediums like Twitter.

It is a vicious cycle during recession –



Brands are built over decades and generations. Think long term—make your competition chase you.

Recession has the eerie ability to convert even the best-off consumers frugal and cautious in their expenditures. In these tough times, the survival or growth of an organization is dictated hugely by how consumers value their brand and the limit to which they are ready to spend on it despite the grim market conditions.

Recession does not prove to be counter-productive for all organizations alike. Historically, it has been observed that in some cases, certain organizations have been successful in garnering new audiences, retaining loyal customers and ultimately benefitting out of the economic slowdown.

As has been proved again and again, slashing prices is not favourable in longer run. There is some amount of consumer perception attached with the prices of products that is adversely affected by abrupt plummeting of prices. In order to invest appropriately in the brand building activities, cutting down on budgets at other places is essential. This could be achieved by bringing high-cost activities like execution, production etc. in-house. Consumers should be viewed as appreciating assets and their retention is what rules the game. In bear economy, consumers become risk averse, therefore, if value is not evident, they do not flinch away from moving to other safer options. Brand is an intangible entity, something that is not consciously paid attention to by consumers. However, it is during these tough times that it comes to the fore and is readily noticed and incorporated in the purchasing decisions.

There is a need to offer a lucid and attractive ‘brand proposition’ at a reasonable price to attract the right number of customers. Recessions are instrumental in weeding out the relatively weaker brands, thereby providing immense opportunity for ‘value driven’ products and organizations to flourish. This brand switching enables companies to literally steal market share from rivals.

Over the years, it has been observed that cutting-down expenses and eventually prices in order to regain customers by increasing demand, does not prove to be a very lucrative idea in the longer run. For instance, companies like Nike, Taco Bell and Pizza Hut that invested heavily in the brand building exercise post the US Stock market crash of 1987, recorded heavy profits as compared to likes of McDonald’s that suffered due to cut-offs.

Now the most important question remains – How do we build the brand in such gruelling times? During times of recession, the people capital of an organization plays a pivotal role in strengthening its position in the market. Hence, efforts should be undertaken to improve employee morale and encourage them to stay focussed on achieving the goals of the organization. The promotion mix broadly comprises of advertisements that are highly capital intensive, door-to-door delivery that involves skill development and talent management on a huge level and publicity, something that is relatively cheap and easy to achieve. Therefore, efforts should be made to invest more in engagement rather than conventional promotion. During worse recession hit times, everyone including your collaborators, distributers, suppliers are in as much hot waters as you. Hence, there is ample scope for negotiations and bargaining in terms of payment cycles, discount benefits, supply timelines etc. The best example to corroborate the efficacy of co-branding is the partnership between Google’s Android and Nestlé’s Kit Kat, where both the parties benefitted by leveraging on their respective brand assets.

Economic slowdown may prove to be an arduous time for a marketer but the best time to build brand.


Like they say, we do not have an option of choosing whether or not we incorporate social media in our marketing regime, instead, the pressing question is how well we are capable of executing it. The new mantra today is – ‘You are what you share online’. Viral marketing is undoubtedly the most attractive and profitable form of marketing that an organization can engage in today. It is easy, convenient, less time consuming & above all, economical for people as well as companies to share news via social media. Properly executed social media marketing can help the organization reach even the remotest of areas and the most impossibly reachable target groups. Social media marketing creates a community in the market wherein people are pulled to the messages that the organizations want to convey which ends up acting as an impeccable source of word of mouth promotion. Be it the very famous tweet that by Google’s Senior Vice President Mr. Pichai announcing the launch of Google+ or his very first tweet about Android Kit Kat that received 4000 retweets and about 1000 favourites overnight, all in a way complimented Google’s marketing efforts, without much expenses – something that is the need of the hour.

Apart from restricting marketing activities on popular mediums like Facebook, Twitter et al, they could also span across myriad marketing channels including the organization’s official website. Smart companies like Google and Nestle never lose opportunities, which is evident from the announcement of the launch of Android Kit Kat 4.4 on their respective websites. Also, today’s generation’s needs and aspirations are highly capricious in nature. Hence, there is a need to constantly catch their attention in order to stay in their active minds. Therefore, companies have to constantly devise fresh, creative and in some ways ‘cool’ methods of keeping the iconoclasts engaged. During the launch of Android Kit Kat, Google revealed its Android KitKat statue in front of its office. Employees and by-passers clicked pictures and shared them on various social networking sites, thereby, unknowingly spreading the word.

Recession is that time when consumer confidence is waning across the global economy. In such a scenario, undertaking activities smartly is very important. Even more important than undertaking investments frugally. It is imperative for organizations to focus on differentiating their brand, showing the prowess of the product to the world and eventually, increasing the confidence of consumers in the brand. The ultimate antidote to a recession is a proactive response. Investing in your brand value always helps in retaining old customers and also in attracting new audiences by stealing share from weaker brands. Only the best positioned players will survive and thrive. As is said, with every hardship comes a glorious opportunity. It is up to the marketer to leverage these opportunities and force the winds in their favour.

In the end, all that can be said is that no one looks forward to a recession, but economic downturns definitely provide opportunities that can make or mar the organization.

( Originally published by mPower in Spandan – the Annual Management Review of IIM Kozhikode )

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