Throughout the recession, many marketers have relied on so-called "recession-survival" lessons to drive their strategies. Unfortunately, these aren't always lessons as much as they are myths. We
thought we would help dispel some of them and share a few tips to spur positive momentum.
Myth #1 - Follow the leader
Growing and innovating by mimicking industry leaders is
a bad practice in a blossoming economy, and even more dangerous in a recession. Recessions (like all moments of crisis) are great opportunities for challengers to gain a leadership position if they
rethink their category and offer a clear market alternative. FedEx managed to upset the unchallenged leadership of rival UPS when, in 1977, it benefited from a strike at UPS and the bankruptcy of REA
Express.
Myth #2 - Better safe than sorry
When recessions hit, many companies' first reaction is to focus on the short term by cutting long-term cost
such as innovation and brand building. History demonstrates that this is a big mistake. In the 1974-75 recession, Ford cut marketing spend by 14%. Chevrolet increased spending, particularly for its
fuel-saving economy models. Chevrolet's market share rose by two percentage points, while Ford lost share. It took years to regain its previous position.
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Myth #3 - Recessions are bad
times to introduce new brands
Consumers have emerging needs during recessions that new brands can address. During a six-year recession in the 19th century, the Denver
area was growing as rail lines opened to the West. The U.S. desperately needed a drink. A 26-year-old Prussian immigrant named Adolph Coors opened what he called the Golden Brewery there. It
eventually became one of the largest brewers in the world.
Myth #4 - National brands are dead
Private labels have been gaining ground. National brands
are not doing a great job of defending their perceived value whenever they stop innovating or confuse consumers with unclear or overlapping offerings. To hold consumers now, national brands need to
give consumers new reasons to continue to engage with them.
Myth #5 - Value = price
Value is not just about a price tag. It is about perceived value
for money. Investing in innovation, new formats and sizes will do a better job of proving perceived value than playing a pricing war.
Apple has managed to sustain the success of the "i" story
through frequent product introductions, short product life cycles and quick pricing shifts. So don't force your consumers to trade down for a commoditized offering. Give them a reason to trade up to
their perceived value at the same price.
Myth #6 - More SKUs = more market share
Launching new SKUs to buy shelf space or "give more choices to
consumers" will never buy you market share. Retailers are in the process of fundamentally rethinking their supply strategies by relying on a smaller number of brands (and SKUs) and a higher degree of
customization to cater to fickle consumers. So unless you own your distribution channel, forget about SKU proliferation and work on portfolio rationalization. This will help your innovation to shine
and your retailers and consumers will probably say "thank you."
Myth #7 - Consumers are marketers
Many marketers still believe that consumers will tell
them what they really want. Unfortunately, no matter how many hours you spend behind a two-way mirror, consumers can react to the next big thing, but they will not create if for you. When entire
consumer mindsets are being redefined (from "greed" to "good", and from "me" to "we"), what marketers should do is analyze what drives macro societal shifts, identify if and how they are likely to
impact their consumers' attitudes and leverage current technology to address them.
Myth #8 - The answers lie in research
Building an effective research
plan is a matter of finding the proper balance between upfront and downstream research. Too much of the former can confuse strategic direction, and too much of the latter can delay action. As
marketers become increasingly risk-averse, the balance often tips from the former to the latter. This is counterproductive, creating paralysis. Remember that answers don't always lie in research, and
definitely not in one kind of research ...