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Wednesday 23 April 2008

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We have heard a great amount about recession lately. But why does everyone focus on the negative side of the story?

IPOD, airline loyalty systems, MTV, IBM personal computer, fast-food value meals: In what economic condition do you think these were all released? Yes, these products and services were introduced in a time where consumer’s cash and spending habits were low.

This is a time for innovation both in the technological and marketing environments. Although the IPOD has been an un-precented success in its 8 year history, not many people remember that it has one of the highest New Year return rates in consumer electronics history, thanks to problems with the device working with a personal computer. But how could Santa know that?

Ed Rensi, former CEO of McDonald’s USA through the recession in the early 1990s recommends that organisations should “Charge ahead despite recession". An example of this is McDonalds' focus on new products and customer experience over discounts, which will continue to pay off.

However, companies often usually do the exact opposite. They cut staff, which leaves those left behind overworked and risk averse. And they cut marketing, which increases profits short term but erodes market share down the road.

Think positive and concentrate on your marketing power over the next six months to ensure you make the most of the market environment!

Reference:

Neff, J; Advertising Age; 24/3/2008, vol. 79 Issue 12, P1-26

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