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When the going gets tough

Jharna Sur

The message is there for everyone to read. The economy is slowly coming out of the recession but companies are still jittery about their bottom lines. Most are debating whether they should or should not slash their advertising or promotional budgets. A slowdown, most managers feel, is the best time to cutback on expenses like advertising and promos. But is this the right thing to do? Experts disagree. Says Professor Prafulla Agnihotri, Marketing, Indian Institute of Management - Calcutta, "Advertising is as essential to your business as oxygen is to breathing. You just cannot stop advertising because you want to. On the contrary, the slowdown is the best time for you to advertise your company and make people remember you."

As they say when the going gets tough, the tough get going. When times are bad and you are feeling the pinch, remember you just cannot stop advertising. Rather, one has to be quite aggressive. Take for instance, the telecom major that announced 1 lakh minutes of free talk time to its subscribers. In response, another company came up with an equally attractive offer of 10 minutes talk time for Rs 1 only. And the war continues even in these recessionary times.

So the mantra is not to leave business growth to fate. Sam Balsara of Madison Communications, ex-plains, "There are definitely ways to advertise even when the budget is tight. After all, you can always promote your brand on a shoe-string budget." Balsara says that the best thing to do when funds are tight is to promote products through media releases. "As long as the company has worthy news to tell, the media and the people will be interested in it. All it takes to write a media release is a bit of time, energy and some writing skills," he says. Echoes Sisir K Saikia, Marketing Head, Reliance Telecom, "Sometime ago we had come up with an excellent product on SMS use. But as we were operating on a tight budget and could not splash out on advertisements in all the major dailies we took the help of the PR department who drafted a nice media release for us."

Another way to reach out to customers is through the Internet. "Place an advertisement on the Internet and watch your customers grow," says Balsara. Experts agree that advertisements are integral parts of the marketing mix and should be considered so. Says advertising icon Ram Ray, "It is an investment and not an expense." This means that the company’s policy should be to develop and maintain an aggressive advertising policy, even during recession. "Only then can one expect favourable sales and income," says Ray. Research shows that advertising builds strength and companies that invest more in it over a period, experience faster growth than those that spend less. Organisations that have continuously increased their advertisement spend have en-joyed similar increases in sales. For instance, Meldrum & Fewsmith Advertising and the BPA studied 64 companies during the recent recession. While 13 firms cut their advertising spe-nd by 20 to 50 per cent, others increased their investments by 30 to 70

per cent during the same period. The firms in the latter category not only continued to grow but also at a faster pace.

Ray observes that the recession provides a unique window of opportunity for firms that are market driven. As Marion Harper, former President of McCann-Erickson once observed, "Recession is the most favourable time for change in competitive positions. Companies that are second in their fields, by applying extra pressure and devising creative strategies, during this period can gain advantages that they can carry into times of prosperity. Whatever their position, if companies wish to be growth companies, they must certainly behave like growth companies." Perhaps nothing can explain this better than the observation of Charles Brower, former President of BBDO who once stated that companies — instead of waiting for business to return to normal — should cash in on the opportunity that their competitors are creating by staying away from the market. A company should take the advantage by being more aggressive. "There are few things as detrimental as a lapse in advertising. It costs much more to get advertising momentum up than it costs to keep it going. Once you let the momentum die, you must start almost from scratch again."

The author is a well-known industry watcher