Features and tRends

(September 2008)

What CEOs and CMOs Say About Marketing in this Environment

Watering is essential if you want your plants to grow. We all realize this, but maybe we should apply the same wisdom to business development. Take the challenge of growing market share and creating a strengthened competitive edge, especially during difficult economic times. Holding back on the watering (investment in your marketing budget) is not a strategy to gain ground let alone sustain it. In this economy, the marketing investors are the ones who will be best positioned to surge forward as the slump subsides. This may run contrary to some popular belief that hiding under a rock is the best strategy to cut costs and protect what you have. Sure, it seems convenient for a marketing agency guy like me to take this position. So instead, take the cue from fellow market and marketing leaders. Savvy marketers and forward-thinking chief financial officers and chief marketing officers from the client side realize that it is because many brands cut marketing investment during a economic downturns… that recessionary times are perhaps the very best and least expensive times to gain market share.

In fact, 86.1 percent of CFOs either maintained or increased their marketing budgets from the previous year, according to a 2008 study conducted by Financial Executives International (FEI) and Baruch College's Zicklin School of Business. What’s more, 23 percent of those CFOs surveyed said they actually increased their marketing/advertising budget as a response to the economic downturn. Why?

Here are the top five reasons I hear from Chief Marketing Officers who support the concept of forward-motion marketing despite an economic slump.

1. Gain superior market presence
A strategic marketing program will help increase your presence in the marketplace, garner enhanced market share, profit margin, and overall company revenue. According to a survey titled “The Evolved CMO”[i] which surveyed 132 chief and senior marketers from companies $100M and over, the number one ranked marketing objective (nearly 60 percent of those surveyed) was to “acquire new customers.” Nearly 50 percent said “increasing brand awareness” was a current top marketing objective. And it only makes sense. If alternately, you decrease your marketing budget… how will new potential customers find you?

2. Surpass sales projections
If you’re looking to hit a specific sales goal next year, marketing will clearly aid in that effort. The majority of companies allocate about five percent of their yearly sales goal to their marketing program. Like sales and distribution or innovative product development, consistent marketing is a vital element to grow your company and expand its footprint. I like to use the analogy of a three-legged stool. A stool won’t stand up by itself if you don’t have all three legs working together. Keep in mind the stool and the symbiotic relationship between the three legs—product innovation, sales and distribution as well as marketing.

3. Develop customer understanding
Obtaining a clear understanding of the attitudes, buying patterns, lifestyle motivators and the demographic makeup of your target market are some of the most beneficial uses of your marketing dollars. According to “The Evolved CMO” survey, “customer trends and research” were ranked among the highest in terms of importance to a marketing campaign’s future success.

If you don’t know fully your target market’s aspirations, how are you going to resonate best with them and get them to buy your product or service? Proper market research reveals your target market’s motivating factors, brand loyalty, experience with your competitors…and even how the current economic times are affecting their overall purchasing habits. Knowledge is power, especially in marketing.

4. Pursue leadership of the game
If you fail to adequately market your product and service during a harsh economic period, what you’ll lose is precious market share to your more aggressive competitors. Companies with solid brands, strong value propositions and steady monetary resources can gain against the competition with progressive marketing programs that maximize demographic, geographic and attitudinal audiences. After all, a strategic marketing campaign shouldn’t be viewed as an expense…we all realize, it’s an investment in your brand’s future.

5. Maximize beneficial marketing tools
Marketing isn’t just about delivering your message via print, radio or even television advertising. Today there are many facets to a integrated communications campaign that include a host of media outlets: interactive/on-line, micro-sites, podcasts, RSS feeds, chat rooms, social networking and search engine optimization. As most media properties are currently starved for advertising and promotional dollars, they are game to negotiate special deals and value-added programs to ensure your marketing funds go further than ever before. When technology and your brand progress, so should your marketing budget

and plan -- in alignment with short and long-term sales projections. This is particularly true when your competitors are moving forward. What is virtually guaranteed: declining budgets will garner declining results, something most brands can ill afford.

At K&A, we appreciate that as one of today’s time-starved marketing officers, you don’t have the luxury to embrace a full level of competence in every aspect of the world of new media, social networks and audience segmentation. That’s where a strategic marketing agency that is a “hub” in a connected community can become a valuable asset to boost your bottom line results.

With 2009 planning right around the corner, bear in mind that marketing not only fuels your brand’s growth…it optimizes company success. Take a cue from those companies launched during economic “recessions” and that came out on top—CNN, MTV, Wal-Mart, Wikipedia and iPod.

Remember to think of your brand as a plant. You want your brand to grow, right? Then why would you skimp on watering it?

To find out more about what K&A can do for your brand’s momentum contact me at 770.518.1000 or sk@kleberandassociates.com.

[i] "The Evolved CMO" survey was conducted by Forrester Research's CMO Group and Heidrick & Struggles.


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