The importance of marketing basics in difficult economic conditions

MARKETING AND SELLING IN TOUGH ECONOMIC CONDITIONS:

SERIES BY: PRASANNA PERERA, MARKETING AND MANAGEMENT CONSULTANT, CHARTERED MARKETER, CIM UK. ARTICLE 15

Most often organizations forget the basics of Marketing, specially when operating in difficult economic conditions. The most critical aspect is understanding consumer/customer needs and wants and satisfying them profitably.

This requires a profound understanding of consumer buying behaviour, attitudes, perceptions and buying motives. It is only through marketing research that this understanding can be obtained.

However, what is the reality? In the cost cutting mode, marketing research budgets are eliminated. The result is a lack of proper understanding of the consumer/customer and their buying behaviour. Marketing research is essential and must never be compromised if professional marketing is practised.

Take the aspect of new product/service development, which is an essential element of marketing. Should the new products/services be introduced in difficult economic times? The answer is YES.

However, any new product/service introduced must offer a differentiated value proposition to succeed in difficult market conditions. This, once again requires research to be carried out to understand if the new product/service meets the consumer needs, either implied or otherwise.

In tough market conditions, consumers have limited disposable incomes. Hence, the price-point (investment) is the most critical aspect. Take for example FMCG (Fast Moving Consumer Goods) in Sri Lanka. How many consumers know the literage or grammage of what they purchase? Many consumers are only concerned about the retail price.

Hence, the price/quality balance is critical. Do not give consumers a Mercedes Benz, when they require a Toyota Corolla! This only amounts to a wastage of valuable resources and dissatisfied customers. Do the marketing basics right, that is give the customer what they want. No more, no less.

Another area of high marketing debate is advertising and promotions. Once again in the cost cutting euphoria, advertising and promotional budgets are cut often indiscriminately.

The logic is that you advertise and promote only in favourable economic conditions! Rather than indiscriminate promotional expenditure cuts, how about cost innovative advertising and promotions? There are many ways to be innovative in advertising and promotions, thereby rationalising costs.

The availability of products and services is critical for marketing success. In the Sri Lankan business scenario you either hear of excess inventory or lack of inventory! In both cases, the marketing basics have not been practised.

Lack of inventory is often due to inaccurate sales forecasts provided by marketing and sales staff. Why? Probably due to lack of market understanding and demand trends.

Likewise, excess inventory could also be due to improper market demand estimation or disregarding sales estimates that are provided (by other functions). Either way, the results are disastrous. Inventory management is critical in tough markets, due to the high cost of capital.

Availability of products also refers to the marketplace, that is making the right product available, at the right place, at the right time, in the right quantities. You simply cannot afford to lose a sale in difficult markets, due to poor distribution. Hence, the marketing and sales basics need to be performed accurately.