An economic downturn is a great time to go after competitors, who likely will be retrenching rather than advancing.
But you need two things before loading up. First, your financials must be in order, including a healthy balance sheet, cash, and little debt. Second, pick the right fights — in other words, craft a recession strategy.
Several recent posts at Harvard Online talk to this subject.
Harvard Online blogger Michael Roberto identifies four steps to grow in a recession. Here’s a summary:
- Invest in R&D. Innovation will propel you to the front of the pack when the economic environment improves.
- Raid competitors. The competition will focus on maintaining their best customers, leaving you to cherry-pick smaller but still attractive clients.
- Help suppliers and distributors. Build loyalty by offering your best partners a helping hand.
- Recruit talent. Downturns provide great opportunities to snap up high achievers at lower prices.
Harvard Business School marketing professor John Quelch provides another view in How To Market In A Recession. One of his key points is that customers redefine value when resources are drying up.
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.
When planning a marketing budget over the next year, says Quelch, executives need to understand this shifting value proposition, rethink product portfolios, revisit pricing, and emphasize market share. Read his post for some great tips.
How will your strategic and marketing plans change if the economy continues south?
Related articles from BNET: Keep Your Company Strong In A Slow Market
