Monday, July 20, 2009

Guru Speak : Advertising During Recession by Lakshmipathy Bhat

Marketing Practice is happy to present a guest post from an Advertising professional par Excellence- Mr Lakshmipathy Bhat. Mr Bhat is currently Vice President at DraftFCB+Ulka Advertising, Bangalore. Mr Bhat has over 17 years experience in various marketing functions. He has worked on BAT, P&G,GSK among others

An ardent lover of Advertising, Mr Bhat is a prolific blogger and runs a blog at lbhat.com

In this post, Mr Bhat talks about advertising strategies that should be adopted during difficult times like recession.

Advertising during recession

It is not unusual to find companies who regard advertising as a wasteful, unnecessary expenditure. The belief is that as long as you have a great product, people will buy. Even with companies who place a great emphasis on advertising, the urge to cut the advertising expenditure is huge, especially during recessionary times.

But it is a well known fact that advertising during recession is a smart thing, maybe even a mandatory thing to do. It’s virtues are well-established and oft-repeated perhaps from 1929, the time of the first Great Depression in the US. But human tendency is such that what seems practical and beneficial in the short term is usually chosen path. The long term benefits of sustaining advertising during tough times far outweigh the possible short term benefit of saving money.

What are the broad guidelines for advertising during recession? The general approach to advertising during recession and advice to marketing companies have been provided by several experts. So what I am going to outline below will not be startlingly new - just my views on the important guidelines:

1. Evaluate the role of your product in the consumer’s life

What might be right for a manufacturer of office furniture may not be relevant for a hair oil marketer. Every product fulfills a certain need in the consumer’s mind. The starting point could perhaps be to evaluate the role of the product. In an article titled Yes, you can raise prices’, Geoff Colvin of Fortune Magazine illustrated the point about being able to even raise prices during recession through a simple 2x2 matrix. Where does your product fit in that kind of a matrix? Is it a necessity like a washing soap or light bulb? Or discretionary like a spa treatment? The answers may provide direction for your approach to pricing and advertising during recession. Of course, such a matrix may be interpreted differently in different markets. In India for example, is an airline brand a discretionary commodity or unique? Everyday purchases that can’t be done without need to stay top of mind. Unique ‘necessities’ are products where certain brands are irreplaceable in that category - it is usually about brands whose loyalty measures are high.


Another useful tool is The FCB Grid, developed by Richard Vaughn, a Senior Vice President of Foote, Cone and Belding Advertising. It shows how consumers approach each category and provides cues for advertising & media strategy for these brands.


For example, for brands in Quadrant 2 - the impact could be that the advertising execution has to be top class with emphasis on impact. Whereas for brands in Quadrant 3, the emphasis could be about repetition, memorability (jingle, perhaps) and so on.

2. Stretch the advertising rupee

Well, there is no reason why a lot of the stuff that is prescribed and done during the tough times is not practiced otherwise! Is every advertising effort meant to produce great ROI? Yes. Is it applicable only during tough times? Obviously not but this aspect is somehow stressed only now. Certain categories will find their incomes being hit - financial products, air travel, hotels, for example. They should research and invest in media that minimize wastage. It could be direct marketing, Online advertising that is measurable and so on. On television, evaluate if you really need that 40-sec commercial or can an equally impactful message be sent across in 30-sec?

3. Focus on changing behaviour, not just attitude

One of the perennial accusations about advertising is it’s fuzzy role in generating sales. Many see advertising as being limited to creating awareness and not really driving sales. The agency would argue that the sale did not happen for reasons beyond their control - pricing, distribution etc. Both valid. But it perhaps makes sense to engineer not just advertising but the entire marketing process to effect a change in behaviour during tough times. It’s not enough for the consumer to feel that XYZ airline is the best airline in terms of service. He must be motivated to make that booking and fly the airline. Perhaps this is more relevant for high value, high interest categories. But even for everyday impulse purchases, SKUs with lower price points could be an option. Advertising should work hand in hand to push the consumer into making a decision focusing on the reason-why he should consider the brand not just a generic message.

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Lakshmipathy Bhat

The views/opinions expressed here are the personal views of the author.