Marketing and selling in tough economic conditions :
Frequently asked questions in marketing
* Should markets be segmented, since segmentation increases costs?
* It is true that segmenting markets increases the cost in the short
term. However, the long term benefits are substantial in terms of
profits, sales and customer satisfaction. Market segmentation should be
carried out irrespective of whether economic conditions are tough or
l Should new geographical markets be entered into or should
marketeers wait until economic conditions improve?
a proper market survey needs to be carried out before entering new
geographical markets. This is a basic principle in marketing. In my
opinion, there is no right or wrong time to enter a market, provided the
necessary market studies are carried out.
l How can sales volumes be increased profitably?
A very tricky question indeed. In tough economic conditions both the
top-line and bottom-line are important. Be very cautious in granting
discounts, since profit margins are eroded. Quantity discounts or cash
discounts are in order. Value-added promotions should be carried out,
both to increase sales and delight customers. Some of these promotions
could include free merchandise, premiums and other incentives.
l Should customer be given instant gifts when sales promotions are
Yes, in tough economic conditions customer expect to receive instant
benefits. Hence, sales promotions that offer instant gratifications are
preferred to long term competitions. For example, spin-your-wheel
offers, lucky dips, etc.,
l What type of market alliances should be formed in tough market
conditions, to improve efficiency?
There are several options available. The key aspect is to ascertain
if the alliances contemplated are adding value or not.
For example, distribution based alliances could open up new markets,
at a lower cost. Franchising could be a cost effective method of market
entry as well.
Informal networks are ideal since they do not demand commitment in
both the short and long term.
l What marketing activities should be outsourced in difficult
The principle of outsourcing, is that costs can be reduced. If this
principle is accepted, then it is the ideal solution for tough economic
However, due care must be given in terms of what marketing activities
to outsource, since confidentiality can become a problem.
In general distribution, advertising, promotions, market research,
public relations and sponsorships can be outsourced. It is harder to
outsource strategic marketing, strategic sales, brand management etc.,