Marketing Strategies in a Downturn

October 9, 2008 Blog 5 comments


What should companies do in a recession? Should they cut back on their advertising expenses or use the opportunity to build their brands like what P&G would do?

I found out the answers to the above and more at the recent CEO Power Breakfast hosted by the Institute of Advertising Singapore and Moove Media. Held at the pristine Shangri-La Hotel, the panel discussion featured three top marketers in Singapore: Mr Terry O’Connor, CEO of Courts Singapore, Mr Quek Peck Leng, CEO of Singtel Mobile and Exec Vice President (Consumer) of Singtel, and Ms Isabelle Svartstein-Bourjade, General Manager of L’Oreal. The moderator was Ms Goh Shu Fen, Principal of R3 Asia Pacific.
Some of the trends cited were pretty sobering in these times:

75% if CEOs in the US thought they provided good customer service. However,
59% of customers were dissatisfied with customer service there.

A year ago, the ST Index (Singapore’s main stock index) was at 3,900. Back then we were cited as a “Developed country growing at a developing pace”. Today, STI is close to 2,000.

Being a highly attentive student (I was furiously scribbling notes), I managed to pick up 11 useful tips from the talk:

1) Focus on the core value and business proposition of your brand. In uncertain times, consumers will want to stick to something which they are familiar with. For retailers like Courts, more emphasis will be placed on price as opposed to service.

2) Consider the other consumer concerns. For L’Oreal, growing environmental consciousness and worry about side effects (triggered by the China milk scandals) have given rise to more minimal packaging and emphasis on consumer health and safety. The top 3 drivers for them would be value, safety and the environment.

3) For the case of Singtel, it will involve moving from big bold ideas to smaller and more granular ones. In a downturn, consumers will be tighter in the mind and the wallet. As such, FMCGs (or in Singtel’s case, FMTG with T meaning Technology) need embrace a street view rather than a world view.

4) Companies must also look for new markets of growth and capitalise on them. An example cited was the beauty market for men, something which L’Oreal is pursuing aggressively, small though that market may be.

5) Product portfolios would also need to be changed, and this would include the corresponding advertising and branding investment. The cash cows and stars may need to be realigned as consumer’s cut their expenses.

6) For retailers, tighter category management is key. This means that one needs to dissect further what one’s customers want in times like this rather than rely on historical information. In fact, getting a snapshot of the future – what’s going ahead for the next 3 to 9 months – becomes more crucial than what took place in the past.

7) An excellent idea mooted by Shu Fen was to expand your brand’s intended use. For example, A1 Steak Sauce moved into offering itself as a condiment for hamburgers instead of pricey steaks during the last crisis.

8) Work on bundling with complementary products and services. For example, laptops, handphones and telcos could work together on an integrated campaign.

9) Agencies must also get into the act together with their clients. In fact, they should try to work together like supply chain partners rather than a vendor-vendee relationship. I like the analogy used, where clients are currently like the pig offering bacon, while agencies are like chickens offering eggs. Both parties should work in lockstep, possibly on a week by week or month by month basis. To make this succeed, information should be freely shared both ways.

10) Customer analytics gains primary importance. This means that you need to know what your customers are telling you on a regular basis – their purchase patterns, attitudes towards service, and so on. Companies should spend more on consumer research because a recession isn’t the time for reckless risk taking.

11) Finally, make sure you have the right folks for the job. As much as possible, get everybody in the team to think lean. Extravagance becomes a luxury, and one can’t simply splash advertisements ad infinitum like there is no tomorrow.

While the above tips were useful for seasoned marketers like myself, they seem to emphasise a more back to basics approach in marketing and advertising. The topic of experimenting with new media did arise during the talk, and the general consensus seems to be that it isn’t quite worth the Return On Investment (ROI) compared to other traditional means. However, L’Oreal did share that they were going to try a product launch entirely online during the coming slow period to test its effectiveness. I think the results of that would be interesting and most telling.

By Walter
Founder of Cooler Insights, I am a geek marketer with almost 24 years of senior management experience in marketing, public relations and strategic planning. Since becoming an entrepreneur 5 years ago, my team and I have helped 58 companies and over 2,200 trainees in digital marketing, focusing on content, social media and brand storytelling.


  1. walter, thanks for the review. Just wondering if Mr Terry O’Connor mentioned anything about Courts tying up with Liverpool FC in his talk?

  2. Thanks for sharing! Interesting conversation during the session. Guess its still very much on traditional marketing since its by Moove Media.

    It’ll be interesting to know what L’Oreal tools will be using and the effectiveness of the campaign. Hope you’ll be able to get some insider news and share with us.

  3. Already felt the squeeze from clients currently. Even they are not financially tight, the economic sentiments made them more prudent. The mentality of 1 cent saved is 1 cent more is very real to them.

  4. Thanks for sharing. This is an insightful piece of work.

    Perhaps it is due to my lack of experience, some of the points are very much applicable to market in good time. I guess I was looking for something ground breaking and inspiration. Maybe at a strategic level, it is a slight shift to a different direction, I am interested to see how these strategies are being implemented and what works, what doesn’t.

  5. thanks for sharing!

    however, i don’t quite agree completely with 1:focus on the core value and business proposition. I think that as it is a downturn, consumers would seek for more than just what they are used to.

    going back to the courts example, i believe that consumers would want emphasis not to be just placed on price as opposed to service, because today’s discerning and demanding consumers expect more than just the primary business proposition of the company. they would want to have both price and service, so i think businesses should also seek to provide a great experience for consumers, for i believe that at the end of the day, it is the TOTAL brand experience that consumers are seeking.

    just my two cents worth 😉

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