It is a pleasure to open a newspaper these days and realize that the media finally spreads more optimism for the times ahead. Is the end of the recession the start of golden times for us marketers? Well, it depends on the point of view.
Undoubtedly, the prevalent reaction of most companies to the uncertain times has been to slash the marketing budget. On the other hand, media sellers would often argue that it’s a big opportunity to spend more and grab market share. Consequently, two companies within the same category can approach these times in two different ways. Take the airline industry in Europe. Easy Jet would be drawn towards a more conservative stance, approaching the situation with more care by trying to save costs wherever possible. Others, such as Ryan Air, would argue that they love recessions because it is a golden opportunity to have a higher share-of-voice and be heard in a marketplace of weak competitors.
Who’s right? It is difficult to say, as it depends on many circumstances and takes some time to tell. For me, the answer lies somewhere in the middle - the companies that see risk and opportunity in times of economic turmoil’s are the winners. The only way to counteract a CEO who wants to “cut costs across the board” is to prove that marketing is actually what creates sales. Accountability for our marketing actions, projections on how they might affect ROI is more important than ever. And, in fact, many brands have succeeded in getting out of the recession much stronger than they were before.
Take Hyundai. What made them the marketer of the year for 2009 (Advertising Age) and gave them a sales increase of almost 40%? In my opinion there are two factors involved:
First of all, it has courageously continued to invest in marketing, while most other automobile brands have cut down on marketing expense. When looking at the car ads from the 60s and 70s, I wonder what happened to the business. This used to be an industry of dreams, of big ideas and emotions. In times like these, the industry needs marketers that don’t fall into panic mode, but show confidence to continue telling their brand stories and wheather the storm. Today, too many automobile brands still operate upon the “launch and leave” strategy, a symptom that has contributed to the fall of GM. They spend billions to develop and launch a new model, but then do not invest to transform them into strong brands through sustainable promotion support. And with a declining market share, it is difficult to give the vast product portfolio the attention that is so desperately needed. Hyundai, on the other hand, seems to build their brands similar to the Toyota of long ago- offering good value cars with a lot of marketing exposure. The new Genesis, which was promoted during the Super Bowl, can serve as an example.
Secondly, Hyundai applied what is the most fundamental rule of marketing: to understand the mind of the consumer. While most automobile companies desperately used sales promotions such as the “0% APR”, Hyundai said: “buy a car from us, and if you lose your job within one year, we will let you return it”. The message was clear, showed an empathy that resonates with consumers and systematically removed fear to strengthen their brand. The problem has not been the cars, but the anxiety of the consumer. People who fear losing their job simply are reluctant to make a big purchase. In these times, Hyundai was the automobile brand to grasp consumer psychology and could gain incredible momentum through the famous first mover advantage.
Some would argue that in spite of these short-term sales boosts, the brand still hasn’t established a concrete image in the mind of the consumer to ensure long-term viability. Undoubtedly, there are many instances where Hyundai doesn’t succeed, but that’s another discussion. In any case, the Hyundai example shows that no matter how turbulent times are, there will always be opportunities for companies which continue coming up with consumer-centric marketing programs that hit the mark.
Francesco Wesel
www.francescowesel.com
www.brandnewtimes.blogspot.com
