Investing in Marketing in a Tough Economy is the Smart Thing to Do

Marketing and sales are one of the most important components of a business’s survival in the market. While both are dependent on each other many people confuse marketing with sales and vice-versa which is a big mistake. Marketing involves designing a product according to the needs of the market and customers, promoting the product through advertising etc. and setting up a competitive price for the product. Marketing is a platform which drives sales. While on the other hand the sales process is what you do to successfully sell a product and fetch a contract. Sales and marketing together is a part of selling and one cannot do without the other. They can also be called activities. The success of a business is critical to the success of these two important activities. A successful marketing campaign makes sales easy. The most important role of marketing is to create opportunities for sales so these can drive the company’s success. Many businesses combine sales and marketing together but in reality they have different targets. While the sales department is interested in fulfilling the requirements of what the customer asked for, the marketing department is actually busy studying what the market demands. The goal of the marketing department is to foresee how the market will shape up in future. They should envision their product catering to the needs of the market for next few years and be ready to make design changes in their product accordingly. It is very important that a company integrates their sales and marketing department in a well fashioned manner but many experts believe that marketing should play a pivotal role among the two. You may be tempted during this economic crisis to reduce or even eliminate your marketing investments because you believe there is a decline in demand for your products or services. Instead, history reveals that spending in a down-turning economy can lead to real sales increases, a growth in market share and meaningful market value gains. Look at what the big advertisers are doing: Procter & Gamble, Kellogg and Kraft Foods have been increasing their advertising spending throughout the last two quarters of this year. Depending on your category of business, it may or may not be the right time for heavy marketing spending. But undoubtedly, and regardless of economic conditions, it is a critical time for strategic marketing planning. Findings of a recent study published by the American Association of Advertising Agencies demonstrate that advertising, and marketing in general, contributes to financial performance for up to three years in the future. In addition, increased advertising in an economic downturn or recession has greater benefits than increased spending during a period of economic expansion. Advertising represents a firm asset that could produce future earnings and as these earnings come to fruition, investors reward opportunistic firms with increased market value. Companies forced to take shelter during a downturn send a message to consumers, employees and stakeholders and open the door for competitors to prey on those weaknesses. An increased presence in marketing venues serves as an important reminder to potential customers too. We all know that the first step toward activating a purchase is driving awareness, and driving and maintaining that awareness is central to your company’s brand performance and vitality. Because the natural tendency of businesses is to reduce marketing spending during a downturn, there may not be a better time than this to advertise. Smart companies, looking for growth, can take advantage of the communications vacuum left behind by more timid companies. Those companies that invest in planning today increase their chances of winning tomorrow. Is your company planning to lead, or planning to follow? This is also a great time to tweak your message and communicate value propositions to consumers. If you have a value proposition that is worth talking about, consumers in today’s economy offer an increased predisposition to hearing that message and acting on it. As Harvard Business School Professor John A. Quelch noted recently, "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."