Beating Recession Fatigue Requires Right Diagnosis

In periods of reduced consumption, like now, managers may be anxious to kick their "turnaround plan" into high gear. But before prescribing any wonder remedy, it’s vital to make a correct diagnosis, otherwise you may be administering placebos. Using research from the food industry in the United States, the author attempts to expand the scope of marketing mix modeling beyond the typical actions resorted to by top management, whose desperate life-saving attempts may register a small blip for a time, but won’t bring about a lasting cure. Product promotions and temporary price reductions, for example, may be better antidotes than launching an invasive advertising campaign, no matter how good an idea it may seem at the time. You first have to decide which state your brand is in – stable, growing or deteriorating – and make different interventions accordingly. Ask yourself: What is it about my value-proposition as a brand that is going to help me through this difficult time? The answer to that question will depend on the brand: price concessions, “share of voice” or selective promotions that price discriminate. Throughout the treatment, maintaining good databases, and using social media and other Web-based tools, are vital instruments that companies can use to refine their practices. With a deep understanding of their place in the market, and by taking the right actions, established brands can survive the crisis and emerge healthier for the future.