For some advertisers that don’t give cost incentives, they can change the ad message to being expensive but worth it. When the economy bounces back, regular pricing can return. Some advertisers will offer interest-free loans, coupons or special promotions to boost sales and market share. As a result, in the minds of consumers, Amazon became an innovative company by introducing a lower cost alternative to cash-strapped consumers.Īnother strategy used by marketers is changing the ad message and using short-term price incentives to match the economic climate with consumers who are seeking a good deal. In a first, on Christmas Day 2009, Amazon customers bought more e-books than printed books. Technology: Amazon sales grew by 28% in 2009 during the “great recession.” The tech company continued to innovate with new products during the slumping economy, most notably with new Kindle products which helped to grow market share. As a result, Pizza Hut increased sales by 61%, Taco Bell sales grew by 40% and McDonald’s sales declined by 28%.
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Quick Service Restaurants: In the 1990-91 recession, Pizza Hut and Taco Bell took advantage of McDonald’s decision to drop its advertising and promotion budget. By adhering to its long-term strategy, Toyota surpassed Volkswagen as the top imported carmaker in the U.S. Since Toyota was experiencing strong sales, when the economic downturn hit, the temptation was to drop their ad budget, which they resisted.
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government issued its first miles-per-gallon report in which Toyota Corolla was second to Honda Civic in fuel efficiency. Imported Automobiles: The 17-month recession of 1973-75 was triggered by the energy crisis. During the Great Depression, Post cut back significantly its advertising budget and rival Kellogg’s doubled its advertising spend, investing heavily in radio and introducing a new cereal called Rice Krispies, featuring “Snap,” “Crackle” and “Pop.” Kellogg’s profits grew by 30% and the company became the category leader, a position it has maintained for decades. There are a number of examples of brands that benefitted by maintaining their ad budgets during economic downturns.ĭry Cereal: In the 1920’s, Post was the category leader in the ready-to-eat cereal category. An increase in “share of voice” typically leads to in an increase in “share of market.” An increase in market share results, with an increase in profits. When marketers cut back on their ad spending, the brand loses its “share of mind” with consumers, with the potential of losing current – and possibly future – sales.Studies have shown that direct mail advertising, which can provide greater short-term sales growth, increases during a recession.
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The lower rates create a “buyer’s market” for brands. The cost of advertising drops during recessions.Brands can project to consumers the image of corporate stability during challenging times.