Businesses cutting back 'will lose out long-term' - Dr John Rudd
Mar 27 2009 by Anna Blackaby, Birmingham Post
A leading expert at Aston Business School has warned that West Midland businesses who cut back their spending on marketing during the downturn will lose out in the long run.
Speaking at the latest event organised by Aston Business School and Aston Science Park providing advice and support to local businesses, Dr John Rudd, lecturer in marketing and strategic management, emphasised the continued need for marketing in a recession.
Although it was “pretty grim out there” and acknowledged the scale of the problems facing local businesses, Dr Rudd said it was essential West Midland firms kept focused on their marketing efforts in order to increase their opportunities when the market improved.
“A lot of research has been done which shows that the long-term winners do not reduce marketing or advertising in a downturn,” he said. “Right now many people in your industry are cutting their advertising budgets so advertising firms are going to want to strike a deal with you, which means you will get more bang for your buck.
“Plus you will increase your ‘share of voice’ when we come out or recession.
“There is a big lagging impact in terms of sales and brand recognition so those that cut back now, in six or twelve months down the line, will see the effect on their sales and brand.”
There was no fundamental difference in the principles of marketing in an economic boom compared to in a time of recession, except that keeping a tight check on the outcomes of every marketing effort was even more important in a downturn. “It’s been absolutely wonderful for a few years and we have had this economic boom where anyone who could make fog on a mirror could make money,” he said. “But this was never going to last. It should not come as any surprise that there is a downturn after the boom. In terms of marketing in a boom time, that’s the time when you get these vanity projects where people get carried away with no real regard for measuring the return. But in a recession you have to get back to ‘real marketing’ and scrap the flowers and chintz.”
Real marketing, according to Dr Rudd, means marketing budgets are seen as an investment, market research is valued and seen as essential, concern for the customer is prevalent throughout the business and information on competitors is gathered. It was essential – especially in a downturn – to review marketing output regularly.
He said that the growth in digital marketing brought with it the opportunity to keep tabs on output more easily.” A lot of businesses are turning to the web as we now have the technology to measure the output. But don’t try to see it as a cheap alternative – it has to pay its way.”
Dr Rudd pointed to a selection of global businesses formed during times of economic turbulence – including HP, Apple and Intel. He said: “They had a very good product, a very clear plan and were creative and inventive.”
Although many companies had their fair share of creativity, not all could translate new ideas into action. ”It’s great to be a doer but make time to have a plan. I meet a lot of business people who by nature are these John Wayne types, which is a great attitude to have, but you need to take time to think.”
n The next two events in the Challenging Times – Surviving the Credit Crunch in the Midlands are Entrepreneurship, Innovation and Business Growth on May 21 with Professor Mark Hart and Enabling Staff in Response to Challenging Times with Dr Michael Butler on July 16.
