Marketing in an Economic Crisis

Futurist Topics - Management

Media interview on future of marketing by Business Week Turkey October 2008

What kind of trends will lead the marketing world and why?

During the 2009 economic downturn, many people will be looking for value rather than luxury. Saving money, products that last longer. Expect growing demand for retail outlets that offer well-made, basic things at low cost.

Marketing will struggle to meet the challenge of online communities. Most consumers trust the opinion of friends and strangers more than official advertising. That is why online communities such as TripAdvisor have become so powerful. You can type in the name of a hotel into Google, but if the comments by people who stayed recently are awful, you are not likely to believe the claims on the hotel’s own website. So future marketing strategies will look for ways to encourage positive news to spread about a brand online.

Expect rapid growth of positional marketing – where advertising is triggered by where you are or by what you are doing. It could be a special offer arriving in your mobile phone for example, just as you are walking by a restaurant. Or advertising while you are surfing the web which is linked to lifestyle choices you have made in the past.

Expect special targeting of different groups – for example of older consumers who often have more money and time than many companies realise. Older people are badly neglected by many marketing departments, which are often dominated by young executives. Just a small example: most people over 50 need glasses to read small print, yet most products aimed at older people are covered in small text. Same with restaurant menus: often designed by 20 year olds and unreadable by candle might by over 50s.

You mention that you don’t believe market surveys to make reliable forecasts. Why?

Market research cannot tell you the future. It just records what people used to think yesterday about what they may do tomorrow, next month, next year. Market research is usually fairly accurate about tomorrow but not about a year or two ahead. As I say, the future is about emotion, and emotions change. Just look at the current banking crisis and how it has affected public confidence in certain institutions. We need to listen to our customers and get to know them well. Take what they say really seriously when they complain or make suggestions. But be careful before believing everything they say about the future. We need to try to build a picture of what the future might be like, and then imagine how they might behave in such a situation.

Do you think the current crisis around the world will alter marketing strategies?

Yes – I think we will see a new emphasis on simple, clear marketing messages. In a crisis people return to brands they know and trust – and trust will be a key theme as well as value for money. Budgets for marketing will be reduced and companies will look for more cost-effective ways to reach their target audiences. We may see less indirect marketing – for example sponsorship of expensive sporting events and other things where the direct sales benefit is less easy to see.

Expect to see further migration of advertising from traditional print and broadcast media to online marketing, where advertisers are able to measure instant returns from small investments, which they can then scale up if they work well. An exception is likely to be radio advertising which is relatively low cost and can be very effective in targeting specific groups.

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