Part I. Advertising Matters
Everyone is fully aware by now that we are in the midst of a horrible recession. Consumers are spending less money, businesses bottom line are being hit and budgets are being cut. Unfortunately the last part of your budget that you should be cutting is the marketing budget.
Let me tell you a story. The milk industry wanted to cut cost during the early 1990's, so they pulled their ads. Sales went unchanged for 12 months and then..at an alarming rate, sales began plummeting. Millions were lost and it took 18 months to rebound!
So, what happen you ask? The Milk industry failed to realize the power of advertising. What is the power of advertising? It strengthens the consumer confidence. Consumers want to feel safe, and a company who is advertising must be doing well right? That might not always be the case, but it is with the consumers. Take for example: You are wanting to finish your basement and need to hire a company. One of the first places that you will head is the Internet and do a Google search. If the company has not put money into a nice website, you will scroll on past it. If you recognize a companies name from a direct mail piece, TV, radio, or another print advertisement, you will immediate gravitate towards that company. Why? You feel safe. You rationalize that they have a nice website, they are advertising, they must be doing okay, even during this recession. Companies that increase their advertising budgets during tough economic times will come out better after the economy picks back up.
What is the Challenge?
Whether retailers are located in the top ten or struggling to stay alive: The one thing we know is ...The Challenge of engaging the consumer will continually increase!
Positioning your company will determine success. In a survey of senior executives across the world: 49% agreed that brand consistency is becoming extremely difficult to achieve. However: 81% understand a recognizable corporate brand is critical for success and 64% believe the same about their product brands.
Unfortunately, there are Winners and Losers.
Winners include: Wal-Mart, Home Depot, Sears, Kroger and Costco. Over the past 10 years, these retail giants have remained on the "Top 100" list!
Some who have lost out: Linen & Things, Eddie Bauer, Circuit City and Mervyns.
Next time we will discuss how 80% of new product launches fail within the first 3 months!
-www.ad-oasis.com
