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MARKETING STRATEGIES TO BATTLE THE RECESSIONB.VEERA BRAMHAM Dr. K.VENUGOPAL RAO

Research Scholar Professor

Sri Krishnadevaraya Institute of Management, S.k.university, Anantapur.

-----------------------------------ABSTRACT

Recession is a phenomenon of decreasing demand for raw materials, products, and

services. Technically, its beginning, progress, and ending depends on the operational

measures used by different researchers and federal agencies. The worst ever financial

crisis to have ravaged the United States since the Great Depression of 1930s, has taken a

heavy toll on the world's largest economy. There is rise in the number of job layoffs and

cost cutting. In fact, all the economies of the world are facing crisis to tackle this global

meltdown. The meltdown has led to shock waves across the world, with economy after

economy gasping for breath survive this finance.

Keywords

Recession, economic, strategies, creativity, marketing tips.

Introduction

The global financial system literally went into a cardiac arrest after the Lehman Brothers

Holdings Inc. collapse and a meltdown was barely avoided through very aggressive

policy responses. Unfortunately, the worst is ahead of us. The entire global economy will

contract in a severe and protracted U-shaped global recession that started a year ago.

The recession in the US market and the global meltdown termed as Global recession have

engulfed complete world economy with a varying degree of recessional impact. World

over the impact has diversified and can be observed from the very fact of falling Stockmarket, recession in jobs availability and companies following downsizing in the existing

available staff and cutting down of the perks and salary corrections.India could also not escape from this turmoil. Part and partially it turned out to be a

victim to this crisis. It suffered less of losses because of its strict economic policies. The

BFSI (Banking, financial sector, Insurance) sector has taken a hit with the financial sector

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getting affected in US. The textile sector has also been hit with the export of textiles

coming down in the recent months. Several jobs are in danger of being lost. There has

been decline in the automobile sector as well. The months of November & December saw

bike & Car sales down. This paper puts an attempt to understand the effects of global

recession faced by India and highlights those sectors which will come to the rescue at

times to go. It will also put a light on the Marketing strategies employed by these sectors

to overcome the fever of recession. It will also focus on the opportunities and strategies

that the marketers can adopt to sustain themselves.

The rise and fall conditions in the market have to go on. But with this the economy has to

follow. Business has to come out with answers. Solutions have to be digged out from the

problem itself. The need of the day for the global recession is to employ robust marketing

strategies for promising sectors.

IntroductionGlobal recession.

In today's arena the most common word we come across are recession and downturn.

Recession or crisis is the part of the normal cycle of business. It is certain that they will

sooner or later occur. Recessions are the result of reduction in the demand of products in

the global market. Recession can also be associated with falling prices known as deflation

due to lack of demand of products. Again, it could be the result of inflation or a

combination of increasing prices and stagnant economic growth in the west. Recessionhas been defined in the marketing literature as a "process of decreasing demand for raw

materials, products and services, including labor" (Shama 1978) or as a "state in which

the demand for a product is less than its former level" (Kotler1973).

Recession is a phenomenon of decreasing demand for raw materials, products, and

services. Technically, its beginning, progress, and ending depends on the operational

measures used by different researchers and federal agencies. The worst ever financial

crisis to have ravaged the United States since the Great Depression of 1930s, has taken a

heavy toll on the world's largest economy. There is rise in the number of job layoffs andcost cutting. In fact, all the economies of the world are facing crisis to tackle this global

meltdown. The meltdown has led to shock waves across the world, with economy after

economy gasping for breath to survive this finance.

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8 Marketing strategies in economic recession

1. Research the customer.

Instead of cutting the market research budget, you need to know more than ever how

consumers are redefining value and responding to the recession. Price elasticity curves

are changing. Consumers take more time searching for durable goods and negotiate

harder at the point of sale. They are more willing to postpone purchases, trade down, or

buy less. Must-have features of yesterday are todays can-live-withouts. Trusted brands

are especially valued and they can still launch new products successfully but interest in

new brands and new categories fades. Conspicuous consumption becomes less prevalent.

2. Focus on family values

When economic hard times loom, we tend to retreat to our village. Look for cozy hearth-and-home family scenes in advertising to replace images of extreme sports, adventure

and rugged individualism. Zany humor and appeals on the basis of fear are out. Greeting

card sales, telephone use and discretionary spending on home furnishings and home

entertainment will hold up well, as uncertainty prompts us to stay at home but also stay

connected with family and friends.

3. Maintain marketing spending

This is not the time to cut advertising. It is well documented that brands that increase

advertising during a recession, when competitors are cutting back, can improve marketshare and return on investment at lower cost than during good economic times. Uncertain

consumers need the reassurance of known brandsand more consumers at home watching

television can deliver higher than expected audiences at lower cost-per-thousand

impressions. Brands with deep pockets may be able to negotiate favourable advertising

rates and lock them in for several years. If you have to cut marketing spending, try to

maintain the frequency of advertisements by shifting from 30-to-15 second

advertisements, substituting radio for television advertising, or increasing the use of

direct marketing, which gives more immediate sales impact.

4. Adjust product portfolios

Marketers must reforecast demand for each item in their product lines as consumers trade

down to models that stress good value, such as cars with fewer options. Tough times

favour multi-purpose goods over specialized products and weaker items in product lines

should be pruned. In grocery-products categories, good-quality own-brands gain at the

expense of national brands. Industrial customers prefer to see products and services

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unbundled and priced separately. Gimmicks are out; reliability, durability, safety and

performance are in. New products, especially those that address the new consumer reality

and thereby put pressure on competitors, should still be introduced but advertising should

stress superior price performance, not corporate image.

5. Support distributors

In uncertain times, no one wants to tie up working capital in excess inventories. Early-

buy allowances, extended financing and generous return policies motivate distributors to

stock your full product line. This is particularly true with unproven new products. Be

careful about expanding distribution to lower-priced channels; doing so can jeopardise

existing relationships and your brand image. However, now may be the time to drop your

weaker distributors and upgrade your sales force by recruiting those sacked by other

companies.

6. Adjust pricing tactics.

Customers will be shopping around for the best deals. You do not necessarily have to cut

list prices but you may need to offer more temporary price promotions, reduce thresholds

for quantity discounts, extend credit to long-standing customers and price smaller pack

sizes more aggressively. In tough times, price cuts attract more consumer support than

promotions such as sweepstakes and mail-in offers.

7. Stress market share.

In all but a few technology categories where growth prospects are strong, companies are

in a battle for market share and, in some cases, survival. Knowing your cost structure can

ensure that any cuts or consolidation initiatives will save the most money with minimum

customer impact. Companies such as Wal-Mart and Southwest Airlines, with strong

positions and the most productive cost structures in their industries, can expect to gain

market share. Other companies with healthy balance sheets can do so by acquiring weak

competitors.

8. Emphasize core values

Although most companies are making employees redundant, chief executives can cementthe loyalty of those who remain by assuring employees that the company has survived

difficult times before, maintaining quality rather than cutting corners and servicingexisting customers rather than trying to be all things to all people. CEOs must spend more

time with customers and employees. Economic recession can elevate the importance ofthe finance directors balance sheet over the marketing managers income statement.

Managing working capital can easily dominate managing customer relationships. CEOs

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must counter this. Successful companies do not abandon their marketing strategies in arecession; they adapt them.

Marketing strategies in an economic recession can be synthesized as follows (according

to Ang, Leong, and Kotler 2000):

y Market mix strategies:- Withdraw from weak markets

- Fortify in markets where brand is strong

- Acquire weak competitors

- Consider non-Asian and youth markets

- Consider resale market for durable products

y Product strategies:- Prune weak products

- Avoid introducing new products to fill gaps

- Introduce fighter or second-line brands

- Adopt adaptive positioning

- Concentrate on simple and durable products

- Augment products with warranties

y Pricing strategies:- Improve quality while maintaining price

- Reduce price while maintaining quality

- Avoid reducing quality and price

- Consider product life cycle pricing

y Promotion strategies:- Maintain advertising budget

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- Increase use of print media

- Provide assurances through rational appeal

- Use expert endorsements, traditionally respected figures and satisfied-customer -

testimonials

- Adopt an advisory tone

- Capitalize on public relations

- Use discounts and premiums, not contests and lucky draws

- Introduce customer loyalty programmes

- Train sales force to anticipate questions and handle objections

y Distribution strategies:- Location is still important

- Sell in discount and wholesale centers

- Prune marginal dealers

- Consider alternative channels

Conclusion

The paper showed that the greatest adjustments in a crisis were price related. Consumers

were found to be less wasteful, buy less of everything, delay purchases of durableproducts, and bargained for lower prices more often than they used to. More shopping in

cheaper outlets such as discount and neighborhood stores was also observed. . Theserecession strategies won't turn the business around when used independently, but if we

combine several of them, they can help to transform one's outlook

for the future. This recession have turned down the growth process and have set the

minds of many for finding out the real solution to sustain the economic growth and

stability of the market which is desired for the smooth running of the economy.