Recessions Unemployment and Marketing Mr Sherpinsky Honors Marketing

Recessions, Unemployment and Marketing Mr. Sherpinsky Honors Marketing Council Rock School District

Economic Factors & Marketing Unemployment rate PEST Analysis Retail sales figure inflation Evaluating the State of the Economy Consumer confidence Exchange rates productivity • P-Political • E-Economic • S-Socio-cultural • T-Technological

PEST Analysis Cause and Effect What Do You Think? • Is consumer confidence related to unemployment rates? • What PEST factors does this scenario illustrate? • If the unemployment rate goes up, consumer confidence is likely to go down because workers may worry that the economy is not stable and that they might lose their jobs. The relation ship between unemployment rates and consumer confidence is an economic factor

PEST Analysis Cause and Effect What Do You Think? • Government begins placing tariffs on certain imported goods. • What group is most likely to support such an effort? Why? • The companies in the country where the goods are being imported are most likely to support the tariff because it will make the prices of their goods more competitive in the marketplace.

Recession Marketing Strategies • The dreaded "R" word. Are we or aren’t we in a recession? How long will the recession last? What is a recession anyway? If we are in recession, should you cancel your marketing plans, batten down the hatches, hunker down and ride it out? • Or should you beef up your marketing efforts and try to get as much business as possible? • • • These are questions that businesses have been asking for decades

Recession Marketing Strategies • Recession: Defined • Traditionally a recession is defined as two consecutive quarters of decreasing Gross Domestic Product, which measures all the goods and services produced by capital and workers located in the U. S. regardless of ownership. • In addition, during such a period the unemployment rate goes up and consumer confidence goes down.

Recession Marketing Strategies • Recession: Defined • National Bureau of Economic Research, decides whether we’re in a recession based on declines in a variety of economic measures. • Historically they last for about a year. • The U. S. has experienced ten recessions since World War II, which means we’ve lived in recessionary times one year out of every six. • We should be used to recessions, but the mere mention of the word in any official capacity sends shivers up the spine of even the toughest businessperson. • The good news about a recession economy is that customers spend more at the end of each of our recessions, on average 9 percent more, that they had spent at the beginning* *International Marketing Agency, 2014

Recession Marketing Strategies • Recession: Why It’s Important! • History reveals that businesses that recognized the fact that growth does occur during recessions and took advantage of it, were able to make gains in their market share despite economic hard times. • Remember: With media rates softening and competitors sitting tight and cutting their marketing budgets, an aggressive business can experience great strides in a recession.

Recession Marketing Strategies • Recession: Does it really work? Prove it! • During research, a correlation of sales and profit trends before, during and after recessions found that almost without exception sales and profits dropped off at companies that cut back on advertising. • Studies also revealed that after the recessions ended, those companies continued to lag behind the ones that had maintained their advertising budgets. • Exact Findings: 1. “Companies which did not cut advertising expenditures during the recession years experienced higher sales and net income over companies 2. “Companies that have the intelligence and guts to maintain or increase their overall marketing and advertising efforts in times of business downturns will get the edge on their timid competitors. "

Recession Marketing Strategies • Recession: Prove it! More findings from Market. Sense • Brands such as Jif Peanut Butter and Kraft Salad Dressing increased their advertising and experienced sales growth of 57% and 70% respectively during recession. • During that same recession, most of the beer industry cut budgets, but Coors Light and Bud Light increased theirs and saw sales jump 15% and 16% respectively. • Among fast food chains, Pizza Hut sales rose 61% and Taco Bell's 40% thanks to strong advertising support, reducing Mc. Donald's sales by some 28% after a 25% cut to advertising budget. • Market. Sense concluded the study by reporting. "The best strategy for coping with a recession is balanced exploitation of ad spending for longterm consumer motivation, plus promotion for short term sales boosts. "

7 strategies to help your business thrive in recession economy: 1. Don't cut your advertising budget, increase it. Let your competition cut theirs. When you increase your spending, you increase your share of voice. If your competitors cut back, your message grows even stronger. 2. Develop a strategic marketing plan so you don't waste money advertising the wrong message in the wrong place to the wrong audience. 3. Achieve greater media efficiency by taking advantage of softer rates and special promotions. 4. Start sponsoring. This type of awareness advertising gives your business valuable exposure to targeted, core audiences. 5. Maintain continuity to sustain awareness. Advertising works cumulatively so you have to remind people frequently about your brand or they'll forget you. 6. Step up public relations efforts. Be sure to maintain a media presence with smart, effective PR programs. 7. Don't "cheapen" your advertising by trying to save on creative or production costs. Your customers will notice and worry about quality. This is a time to stress quality and value.

Quiz: Quia