Strategically, when everybody zigs it makes sense to zag

"Successful companies do not abandon their marketing strategies in a recession; they adapt them."

John Quelch, Harvard Business School

Yesterday, I was scanning my Google Reader for information on 'Marketing and Recession' and came across an HBR Working Knowledge article by Prof. John Quelch entitled, "Marketing your way through a recession".  In it, he cogently argues the following:

Research the customer.  Instead of cutting the market research budget, you need to know more than ever how consumers are redefining value and responding to the recession. Price elasticity curves are changing. Consumers take more time searching for durable goods and negotiate harder at the point of sale. They are more willing to postpone purchases, trade down, or buy less. Must-have features of yesterday are today's can-live-withouts. Trusted brands are especially valued and they can still launch new products successfully, but interest in new brands and new categories fades. Conspicuous consumption becomes less prevalent.

In other words, there are still opportunities if companies are bold enough to grab them.  Know thy customer is never a truer altruism than when times are hard.

Something else caught me eye in the same article.  Quelch went on to say (emphasis in italics mine):

Maintain marketing spending. This is not the time to cut advertising. It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times.

Well, that got my attention in a month when two big pharma companies (Pfizer and Novartis) announced job losses on top of those previously announced by GSK, Merck, Schering Plough and others.  September and October are also the months when Finance Departments traditionally love to cut marketing budgets.  If the monies haven't been spent or committed, tough, never mind that there are a number of important scientific conferences coming up that offer great opportunities for announcing new data, PR activity, medical education, symposia/spin-offs and such like for the bold ones able to maximise the opportunities for growing market share into 2009.

Perhaps the Finance Directors would do well to heed the sage advice of Oliver Wendell Holmes:

“Greatness is not where we stand, but in what direction we are moving.”

In a recession, moving forward rather than cutting back may well separate the winners from the losers in the long run.