The following post is by Philip Kotlerand John A. Caslione, authors of CHAOTICS: The Business of Managing and Marketing in The Age of Turbulence.
While ad and media rates are dropping, skittish and budget-conscious customers are in no hurry to buy. Not surprisingly, marketing managers are experiencing unprecedented pressure to justify their expenditures. “The signs of turbulence are all over, and they are not going away anytime soon,” notes Philip Kotler, one of the world’s leading experts on the strategic practice of marketing. “Marketers need to develop a new mindset.” In CHAOTICS, Kotler emphasizes eight strategies for mindful marketing in The Age of Turbulence:
1. Secure your market share from core customer segments. Turbulence is not a good climate for venturing into new customer segments. Your first priority must be to maintain your core source of revenue. Be prepared to ward off attacks from competitors attempting to take away your most loyal and profitable customers. It’s time to secure the home front.
2. Push aggressively for greater market share from competitors. All companies fight for market share and, in chaotic times, many have been weakened. Watch for signs of any competitor’s buckling under the pressure. Pounce on news of slashed marketing budgets. Push aggressively to add to your core customer segments at the expense of your weakened competitors.
3. Invest more time and resources in customer research. Chaos has a way of changing everyone, including your core customers. Their needs and wants are in flux. Stay close to them. Research your customers more now than ever before. You don’t want to find yourself relying on old, “tried-and-true” marketing messages that no longer resonate.
4. Seek to increase—or at least maintain—your marketing budget. With the market being buffeted, your customers getting whipsawed, and your competitors making bold moves on your turf, turbulence is the worst time to cut anything in your marketing budget that targets your core customer segments. In fact, you need to add to it. Take money away from those forays you were planning to go after totally new customer segments.
5. Focus on all that’s safe. When turbulence strikes, consumers tend to flock to what feels safe. Assure your customers of the security and safety of your company and your products and services. Emphasize your core values. Do everything possible to communicate that continuing to do business with you is safe. Spend whatever it takes.
6. Quickly drop programs that aren’t working. Your marketing budgets will always be scrutinized, in good times as well as in bad times. Cut out any programs that aren’t paying off on their promise, before anyone else gets the chance to call attention to them. If you’re not watching them, rest assured that someone else is, including all your peers whose budgets couldn’t be protected from the axe.
7. Don’t discount your best brands. When you discount your most successful brands, you instantly tell the market two things: your prices were too high before and your brands won’t be worth their premium price when the economy rebounds. If you want to appeal to more frugal customer needs, then create a new, separate and distinct product or service under a new brand with lower prices. This gives value-conscious customers the ability to stay close to you, while not alienating those customers who are still willing to pay for your higher-priced brands. Once the turbulence subsides and you see some calm skies ahead, you may consider discontinuing your new branded value product line—or not. Remember, it’s better for you to cannibalize your products than for your competitors to do so.
8. Save the strong; lose the weak. In a turbulent economy, you need to make your strongest brands and products even stronger. Do not waste time or money on anything not supported by strong value propositions and a solid customer base. Invest in reinforcing your strengths.
Philip Kotler is one of the world’s foremost experts on the strategic practice of marketing, voted the first Leader in Marketing Thought by the American Marketing Association. He is the S.C. Johnson Distinguished Professor of International Marketing at the Kellogg School of Management at Northwestern University, and the author of many influential books. John A. Caslione is a highly sought after expert who has executed global business development strategies in 87 countries on six continents. He is the founder, President, and CEO of the global mergers and acquisitions advisor GCS Business Capital LLC.