MARKETING STRATEGIES TO BATTLE THE RECESSION

B.VEERA BRAMHAM Research Scholar Dr. K.VENUGOPAL RAO Professor

Sri Krishnadevaraya Institute of Management, S.k.university, Anantapur.

----------------------------------ABSTRACT Recession is a phenomenon of decreasing demand for raw materials, products, and services. Technically, its beginning, progress, and ending depends on the operational measures used by different researchers and federal agencies. The worst ever financial crisis to have ravaged the United States since the Great Depression of 1930s, has taken a heavy toll on the world's largest economy. There is rise in the number of job layoffs and cost cutting. In fact, all the economies of the world are facing crisis to tackle this global meltdown. The meltdown has led to shock waves across the world, with economy after economy gasping for breath survive this finance.

Keywords

Recession, economic, strategies, creativity, marketing tips.

Introduction

The global financial system literally went into a cardiac arrest after the Lehman Brothers Holdings Inc. collapse and a meltdown was barely avoided through very aggressive policy responses. Unfortunately, the worst is ahead of us. The entire global economy will contract in a severe and protracted U-shaped global recession that started a year ago. The recession in the US market and the global meltdown termed as Global recession have engulfed complete world economy with a varying degree of recessional impact. World over the impact has diversified and can be observed from the very fact of falling Stock market, recession in jobs availability and companies following downsizing in the existing available staff and cutting down of the perks and salary corrections. India could also not escape from this turmoil. Part and partially it turned out to be a victim to this crisis. It suffered less of losses because of its strict economic policies. The BFSI (Banking, financial sector, Insurance) sector has taken a hit with the financial sector

getting affected in US. The textile sector has also been hit with the export of textiles coming down in the recent months. Several jobs are in danger of being lost. There has been decline in the automobile sector as well. The months of November & December saw bike & Car sales down. This paper puts an attempt to understand the effects of global recession faced by India and highlights those sectors which will come to the rescue at times to go. It will also put a light on the Marketing strategies employed by these sectors to overcome the fever of recession. It will also focus on the opportunities and strategies that the marketers can adopt to sustain themselves. The rise and fall conditions in the market have to go on. But with this the economy has to follow. Business has to come out with answers. Solutions have to be digged out from the problem itself. The need of the day for the global recession is to employ robust marketing strategies for promising sectors.

IntroductionGlobal recession.

In today's arena the most common word we come across are recession and downturn. Recession or crisis is the part of the normal cycle of business. It is certain that they will sooner or later occur. Recessions are the result of reduction in the demand of products in the global market. Recession can also be associated with falling prices known as deflation due to lack of demand of products. Again, it could be the result of inflation or a combination of increasing prices and stagnant economic growth in the west. Recession has been defined in the marketing literature as a "process of decreasing demand for raw materials, products and services, including labor" (Shama 1978) or as a "state in which the demand for a product is less than its former level" (Kotler1973). Recession is a phenomenon of decreasing demand for raw materials, products, and services. Technically, its beginning, progress, and ending depends on the operational measures used by different researchers and federal agencies. The worst ever financial crisis to have ravaged the United States since the Great Depression of 1930s, has taken a heavy toll on the world's largest economy. There is rise in the number of job layoffs and cost cutting. In fact, all the economies of the world are facing crisis to tackle this global meltdown. The meltdown has led to shock waves across the world, with economy after economy gasping for breath to survive this finance.

8 Marketing strategies in economic recession

1. Research the customer.

Instead of cutting the market research budget, you need to know more than ever how consumers are redefining value and responding to the recession. Price elasticity curves are changing. 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 todays 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.
2. Focus on family values

When economic hard times loom, we tend to retreat to our village. Look for cozy hearthand-home family scenes in advertising to replace images of extreme sports, adventure and rugged individualism. Zany humor and appeals on the basis of fear are out. Greeting card sales, telephone use and discretionary spending on home furnishings and home entertainment will hold up well, as uncertainty prompts us to stay at home but also stay connected with family and friends.
3. Maintain marketing spending

This is not the time to cut advertising. It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times. Uncertain consumers need the reassurance of known brandsand more consumers at home watching television can deliver higher than expected audiences at lower cost-per-thousand impressions. Brands with deep pockets may be able to negotiate favourable advertising rates and lock them in for several years. If you have to cut marketing spending, try to maintain the frequency of advertisements by shifting from 30-to-15 second advertisements, substituting radio for television advertising, or increasing the use of direct marketing, which gives more immediate sales impact.
4. Adjust product portfolios

Marketers must reforecast demand for each item in their product lines as consumers trade down to models that stress good value, such as cars with fewer options. Tough times favour multi-purpose goods over specialized products and weaker items in product lines should be pruned. In grocery-products categories, good-quality own-brands gain at the expense of national brands. Industrial customers prefer to see products and services

unbundled and priced separately. Gimmicks are out; reliability, durability, safety and performance are in. New products, especially those that address the new consumer reality and thereby put pressure on competitors, should still be introduced but advertising should stress superior price performance, not corporate image.
5. Support distributors

In uncertain times, no one wants to tie up working capital in excess inventories. Earlybuy allowances, extended financing and generous return policies motivate distributors to stock your full product line. This is particularly true with unproven new products. Be careful about expanding distribution to lower-priced channels; doing so can jeopardise existing relationships and your brand image. However, now may be the time to drop your weaker distributors and upgrade your sales force by recruiting those sacked by other companies.
6. Adjust pricing tactics.

Customers will be shopping around for the best deals. You do not necessarily have to cut list prices but you may need to offer more temporary price promotions, reduce thresholds for quantity discounts, extend credit to long-standing customers and price smaller pack sizes more aggressively. In tough times, price cuts attract more consumer support than promotions such as sweepstakes and mail-in offers.
7. Stress market share.

In all but a few technology categories where growth prospects are strong, companies are in a battle for market share and, in some cases, survival. Knowing your cost structure can ensure that any cuts or consolidation initiatives will save the most money with minimum customer impact. Companies such as Wal-Mart and Southwest Airlines, with strong positions and the most productive cost structures in their industries, can expect to gain market share. Other companies with healthy balance sheets can do so by acquiring weak competitors.
8. Emphasize core values

Although most companies are making employees redundant, chief executives can cement the loyalty of those who remain by assuring employees that the company has survived difficult times before, maintaining quality rather than cutting corners and servicing existing customers rather than trying to be all things to all people. CEOs must spend more time with customers and employees. Economic recession can elevate the importance of the finance directors balance sheet over the marketing managers income statement. Managing working capital can easily dominate managing customer relationships. CEOs

must counter this. Successful companies do not abandon their marketing strategies in a recession; they adapt them.

Marketing strategies in an economic recession can be synthesized as follows (according to Ang, Leong, and Kotler 2000):
y

Market mix strategies: Withdraw from weak markets Fortify in markets where brand is strong Acquire weak competitors Consider non-Asian and youth markets Consider resale market for durable products

Product strategies: Prune weak products Avoid introducing new products to fill gaps Introduce fighter or second-line brands Adopt adaptive positioning Concentrate on simple and durable products Augment products with warranties

Pricing strategies: Improve quality while maintaining price Reduce price while maintaining quality Avoid reducing quality and price Consider product life cycle pricing

Promotion strategies: Maintain advertising budget

Increase use of print media Provide assurances through rational appeal Use expert endorsements, traditionally respected figures and satisfied-customer testimonials Adopt an advisory tone Capitalize on public relations Use discounts and premiums, not contests and lucky draws Introduce customer loyalty programmes Train sales force to anticipate questions and handle objections
y

Distribution strategies: Location is still important Sell in discount and wholesale centers Prune marginal dealers Consider alternative channels

Conclusion The paper showed that the greatest adjustments in a crisis were price related. Consumers were found to be less wasteful, buy less of everything, delay purchases of durable products, and bargained for lower prices more often than they used to. More shopping in cheaper outlets such as discount and neighborhood stores was also observed. . These recession strategies won't turn the business around when used independently, but if we combine several of them, they can help to transform one's outlook for the future. This recession have turned down the growth process and have set the minds of many for finding out the real solution to sustain the economic growth and stability of the market which is desired for the smooth running of the economy.