Marketing is usually the first area to get cut during a down turn, should this change? This is a good point and depends on a number of questions.
- Will cutting down on marketing impact on retaining your customers?
- Will you need to increase your customer base to remain viable?
- Can you close the revenue gap by expanding your product / service base?
- Can you enter new markets that are less competitive?
If you answered “YES” to any of these questions then cutting down on your marketing is probably going to have a negative impact on sales, more than just the effect of the down turn. The above questions need to be carefully considered before cuts to marketing are made.
Price is another factor that needs to be taken into consideration. In many industries price competition increases dramatically as firms try to keep volumes and capacity stable to ensure cash flow.
Answers to the questions above can also assist in avoiding getting into a price competition. Other options include structuring product levels so that “cheaper” alternatives can be offered but with healthy margins.
If you would like to know more about the options available, please contact us for a chat.