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RECESSION & MARKETING
NOT THE TIME TO HIDE
As the murmurs and discussions on recession and economic slowdown get louder companies tend to take a very conservative approach in anticipation of lower consumption. The relationship between disposable income and consumption has been a topic of discussion for many years. The more disposable income people have, the more they spend. This is because of the law of diminishing returns. The law of diminishing returns also states that as people get wealthier, spending increases less quickly than their income. This is because when people have little to no money, they will spend every penny they have on whatever they need to survive.
This means the consumption or investment in essentials doesn’t reduce, they are moderated and optimized. In the previous recessions, a peculiar trend was noticed, consumers tend to hoard goods, and there was a growing demand for bigger SKUs. People might drop big brands and go for lesser-known brands that tend to offer great price offers.
Marketing managers need to be aware of the economic environment and make decisions that are appropriate for their business. Consumers will become more price-sensitive and will be looking for discounts and promotions. Companies need to invest in marketing to sustain their growth by optimizing spend, new packaging & SKUs, change in pricing strategy and invest in marketing. Boost the declining retail sales by thinking creatively and smarter marketing. It’s not the time to slow down. It’s time to drive hope, optimism and create new opportunities for your brand and for your consumers.
When businesses stop investing, they cease to grow. Be forward-looking, prepare for the spike after the dip and build for the future.
