During times of economical downturns, many companies compromise their advertising and promotion. However, this is not always the best strategy to pursue. A great deal of managers fail to realize the value of advertising and promotion.
When dealing with a recession the best defense is a good offense. "Most firms tend to cut back on advertising during a recession, reducing noise and increasing the effectiveness of advertising of the firm that advertises" (Belch 233). Companies expect sales to inevitably decrease during a recession so they do not put forth much effort to increase or even maintain advertising an advertising budget. Since this is the most common mind set for companies during a recession, going against this would give a daring company the chance to stand out. Advertising during a recession will assure a lack of competition and/or distractions (several other advertisements).
"Not cutting back on advertising during a recession could increase sales during and after the recession" (Belch 233). A McGraw-Hill Research analysis of business-to-business advertising expenditures during the 1981-82 recession shows how companies brave enough to increase or maintain advertising had future sales that significantly surpassed those of companies that eliminated or decreased advertising during the recession. By 1985 the companies who maintained or increased advertising had racked up a 3.2 to 1 sales advantage, leaving the cowardly in the dust (Belch 233).
The final reason cutting back on advertising and promotion during a recession is a less than ideal action is because "advertising directly affects brand salience making the advertised brand more top-of-mind among prospects" and tends to amplify the relative perceived quality of the product (Butterfield 96). For example, if Product X is the only product in its market being heavily advertised during a recession, consumers may believe it to be of higher quality because they recognize it and chose it over Product Z (which is not advertised) while shopping.
"Not cutting back on advertising during a recession could increase sales during and after the recession" (Belch 233). A McGraw-Hill Research analysis of business-to-business advertising expenditures during the 1981-82 recession shows how companies brave enough to increase or maintain advertising had future sales that significantly surpassed those of companies that eliminated or decreased advertising during the recession. By 1985 the companies who maintained or increased advertising had racked up a 3.2 to 1 sales advantage, leaving the cowardly in the dust (Belch 233).
The final reason cutting back on advertising and promotion during a recession is a less than ideal action is because "advertising directly affects brand salience making the advertised brand more top-of-mind among prospects" and tends to amplify the relative perceived quality of the product (Butterfield 96). For example, if Product X is the only product in its market being heavily advertised during a recession, consumers may believe it to be of higher quality because they recognize it and chose it over Product Z (which is not advertised) while shopping.
Resources and Citations
Belch, GE.
and Belch, MA. Advertising and Promotion: An Integrated Marketing Communications
Perspective, 9th Edition.
McGraw-Hill Companies. 2012.
Butterfield, L. (2003). Advertising During a Recession. AdValue twenty ways advertising
works for business (Online-Ausg. ed., p. 96). Oxford: Butterworth-Heinemann.
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