Just when brands and products need marketing the most — in a downturn — many budgets are cut. This is an age-old problem, about which Barry Silverstein elaborates in the March 24 issue of brandchannel.com. He writes, in part: “A recession can weed out weaker brands of lower quality and therefore make category leaders even stronger. At the same time, value-based brands can increase brand strength because they present the consumer with a familiar name at a reasonable price. Also, during a sluggish economy trusted store brands can appeal to budgeting consumers who previously purchased a more expensive brand name product… A brand marketing paradox is that expenditures are often slashed in recessionary times, so brands risk becoming less visible. This is not the best strategy. Harvard Business School professor John Quelch… says: ‘Instead of cutting the market research budget, you need to know more than ever how consumers are redefining value and responding to the recession.’ Quelch also points out: ‘It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times.’ Of course, a company’s management must have a strong enough stomach to follow a contrarian’s strategy and invest funds in brand marketing when other expenses must be controlled.”
via GDUSA Newsletter, April 2008
