I met an owner of an Import house today.
“There is no money in the market” he said not very cheerfully.
“Do you have money?” I said no. He seemed pleased.
I am hearing this all the time.
Global meltdown is affecting India.
Stock market analysts are predicting doomsday.
“Make in India” is not working.
How does a marketer decode all these signals coming out from every nook and corner?
Do you stop all marketing activities and wait for the good times to come?
When economy is good, every product is a brand.
Sales are up-everybody is mighty pleased with themselves.
Even weak brands do well. This is the time marketing is completely ignored.
You are just interested in sales and more sales.
But when economy is down and sales are sliding- suddenly everybody remembers marketing.
All CEO’s and top executives get involved in marketing process.
They believe that marketing will suddenly save them.
They want to show that they are taking some positive actions.
And this is the time they take stupid decisions.
They conclude, that their strategy is right, but their execution was faulty.
So their most meaningful response is to fire lower level managers responsible for execution.
Secondly, they launch couple of new products to get additional sales.
It brings addition burden on already thin resources, as they require budgets to promote new products.
I have seen some companies raise the prices, when sales are going down-to cover up lost revenues.
Thirdly, they start listening to bean counters, (great word specially made for accountants) who advise them to go on a drastic cost cutting exercise.
So no training, no marketing expenses, no research and no increments.
Hence, account & finance guys -who have no clue what the customer wants, and who have never visited even one customer in last five years-dictate strategy in a downturn.
My suggestion-ignore all the advise given by experts.
Your strategy during a downturn should be :
- Narrow your focus on key brands during downturn.
Take the example of smart phones- Samsung focused on Galaxy range while Apple focused on one product launch at a time.
On the other hand, Blackberry had 15 models and Nokia lost the plot by not focusing on anything, which consumers could adore.
Both these brands lost heavily to Samsung and Apple.
- Marketing will always be creative, intuitive and sometimes illogical.
Don’t try to over-analyze the strategic route.
Keep it simple and don’t discontinue your marketing efforts.
Nobody will buy your product because of tons of excel sheets and bar charts.
- This, perhaps, is the best time to launch a new business or a new product.
We are a nation of herd mentality.
Our natural instinct is to go where the crowd is going.
Play safe and you shall survive.
Since everybody is worried about the future and not wanting to take any risk-you must also freeze all new plans and activities.I am not sure, if you will survive or not. But I am sure, you will not win.
Launching a new business or a product during slowdown has huge advantage.
You will be able to hire good people at half the price-in good times, you would not have been able to afford them.
You can advertise or promote your product at 40 % of the normal cost.
Your suppliers are willing to give you additional credit line.
In short, you can afford to launch a new product at ridiculously low cost and jump start the competition.
Of course, all this time, your competition is listening to expert advise of not taking any risk.
- In times of low growth, leaders do not feel good about themselves.
They do not like feedback.
They have enough excuses for not taking feedback.
This is a huge mistake-feedback will give you clarity and sense of purpose. It also creates faith in management. Moral of the story-if you are in a hole, don’t dig deeper.