Four Good Reasons To Keep Up The Marketing In A Downturn

Four Good Reasons To Keep Up The Marketing In A Downturn

The Coronavirus shutdown has forced many a business owner to look at cutbacks, and marketing is often the first casualty. But a look back at past downturns casts serious doubt on the wisdom of that decision.

In an article published last fall in Forbes, writer Brad Adgate serves up historic proof that recessions are a great time to transform threats into opportunities and a bad time to lay low.

In hammering his point home, Adate quotes Walmart founder Sam Walton’s reply after being asked what he thought about a recession. “I thought about it,” Walton said, “And I decided not to participate.”

Excerpted from Adgate’s article below are a few examples of businesses that transformed a downturn into an upswing.

Cereal: In the 1920’s, Post was the category leader in the ready-to-eat cereal category. During the Great Depression, Post cut back significantly its advertising budget and rival Kellogg’s doubled its advertising spend, investing heavily in radio and introducing a new cereal called Rice Krispies, featuring “Snap,” “Crackle” and “Pop.” Kellogg’s profits grew by 30% and the company became the category leader, a position it has maintained for decades.

Imported Automobiles: The 17-month recession of 1973-75 was triggered by the energy crisis. In late 1973, the U.S. government issued its first miles-per-gallon report in which Toyota Corolla was second to Honda Civic in fuel efficiency. Since Toyota was experiencing strong sales, when the economic downturn hit, the temptation was to drop their ad budget, which they resisted. By adhering to its long-term strategy, Toyota surpassed Volkswagen as the top imported carmaker in the U.S. by 1976.

Quick Service Restaurants: In the 1990-91 recession, Pizza Hut and Taco Bell took advantage of McDonald’s decision to drop its advertising and promotion budget. As a result, Pizza Hut increased sales by 61%, Taco Bell sales grew by 40% and McDonald’s sales declined by 28%.

Technology: Amazon sales grew by 28% in 2009 during the “great recession.” The tech company continued to innovate with new products during the slumping economy, most notably with new Kindle products that helped to grow market share. In a first, on Christmas Day 2009, Amazon customers bought more e-books than printed books. As a result, in the minds of consumers, Amazon became an innovative company by introducing a lower cost alternative to cash-strapped consumers.