Marketing Research and Advertising When the Economy Goes South-Tom Schori
In 1970, Philip Morris’ share of the domestic market was about 14%. Currently, it is around 50%. They did this by consistently having their share of voice greater than their share of market. Not just one year, but year after year. And this was when RJ Reynolds vowed not to be outspent.
But what does that have to do with “Marketing Research and Advertising When the Economy Goes South?” Everything. The sad reality is that many otherwise “bright” folks are prone to cut their advertising (and marketing research) expenses when the economy is soft. The fact of the matter is that a soft market is exactly when advertising (and marketing research) investments should be increased, not reduced.
When Philip Morris set out to outpace their competitors, they viewed increased spending in advertising and marketing research as an investment, not as an expense. And their investment probably had a greater return than even they had expected.
In this challenging economy we find ourselves in as we enter 2009, I’d recommend that well thought-out advertising and marketing research investments be increased, not decreased. Of course, if you don’t mind giving up share to competitors, let them outspend you as did RJ Reynolds (and other tobacco companies) when Philip Morris starting outspending the competition. When they started their heavy spending, share wise they were (as I recall) a distant 4th to the category leader, RJ Reynolds, who had long held more than 30 share points-now far behind the leader, Philip Morris.
January 8th, 2009 at 12:49 pm
Tom,
Looks great!
Mike
January 8th, 2009 at 2:03 pm
As a former inside sales and advertising agent, I can tell you that Tom’s advice is right on the money. Many times when I would call businesses to talk with them about their advertising campaigns for the coming year, they would tell me that they weren’t going to do any advertising because it would just cost them too much money.
I would always respond in the same way…”well, ok. But there is a really good chance that when I call you back next year that your business will no longer exist.” That always got the conversation rolling again.
You know what? That was the truth…not just a way to overcome objections.
Smart and successful businesses are forward thinking and three steps ahead. They know that in order to make money, they have to spend money. Advertising and marketing is never a cost. It is a must.