Still with us? In this series of reports we're looking at historical realities and offering you solid ideas of what you should be doing right now as you look toward the future. You can actually BUILD market share during a recession IF you act. Let's go:
If you remember we had a national recession back in 1981 that lasted a good two years. Following the event McGraw-Hill studied what happened to 600 industrial companies. They found that those B to B firms who maintained or increased their advertising/marketing budgets averaged much higher sales growth during AND after the economic downturn than did the companies who decreased or canceled their advertising/marketing budget.
Here is a story told to me just the other day. It dates back to 1928 at the dawn of the Great Depression. At that time there were two giants in the food industry that had been butting heads for years. Post and Kellogg. It was a classic battle of branding warfare.
When the Depression hit Post made a decision to cut/reduce their marketing dollars. Kellogg increased their consumer based advertising. The result: Kellogg took over the market share and even 60 years later Post was still well behind.
It seems Kellogg has not forgotten that story because just a week ago Kellogg announced they are increasing their marketing budget over last year!
Tomorrow we'll give you even further insight (excuse the pun) of how successful companies have used recession economies to expand their market share. And later in the week we'll give you some ideas of what you might do. Hang in their and let's capture market share together!
Michael P. Libbie - Insight Advertising, Marketing & Communications