It is said that the Chinese word for “crisis” ends with the same character that begins the Chinese word for “opportunity.” My question, in relation to the current economic crisis, is whether one needs to wait for the crisis to be nearly over in order to find opportunity?
About a month ago, I attended a day-long series of seminars as a guest of Business Clubs of America’s (BCA’s) Philadelphia chapter. It was entitled “Business Boot Camp” and held at Caesar’s in Atlantic City on October 22, 2008. Among the sessions offered was one entitled “Navigating Economic Changes – A discussion of marketing and sales strategies” presented by Mike Daly of WXPN radio, along with Debra Loggia of Strategies-Group and Jennifer Sadlowe of Smart Business Magazine.
The concept that stuck with me from that session is that companies which maintained or increased advertising expenditure during an economic downturn consistently achieved higher sales during the downturn, and, more importantly, often captured market share that they held for many years after the economy recovered. The example I remember most vividly is the “cereal wars” between Post and Kellogg. Post was the pre-Depression leader, but pared down advertising substantially, while then-upstart Kellogg’s advertised more aggressively. Kellogg maintains its market share advantage (about 40% to General Mills’ less than 20% and Post’s less than 15%) to this day.
This point is stressed by others listed as sources for the presentation – including Harvard Business School Professor John Quelch http://discussionleader.hbsp.com/quelch/2008/09/how_to_market_in_a_recession.html and Atlanta-based strategic marketing consultant Alf Nucifora http://www.nucifora.com/art_163.html.
This information does not mean that I am advocating purchasing large quantities of advertising if that is not how you market your business. It is more of a call to maintain and even amplify what you have found that works. If that means internet-based social networks, be present there. If that means going to meetings and events, keep your calendar full that way.
There is another school of thought that R&D was another place where some companies outmaneuvered their competitors during the 1930’s and had lasting gains. See http://discussionleader.hbsp.com/hbreditors/2008/06/recession_the_mother_of_invent.html which makes reference to Caroline Bird’s 1966 book, The Invisible Scar.
Regardless of the strategy to best employ, the clear message is that this is a key time to position your product or service to address consumers’ needs – because consumers are re-thinking their options, and market share is now up for grabs.
Now that I’ve made a case for finding and developing opportunity in the midst of a crisis, I’m curious to know what your thoughts – and plans – are. Please post a comment, or send me an e-mail using the “CONTACT” button above.
Thanks for reading and participating!
Ron
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