Magazine article Marketing

Proactive Marketing to the Fore

Magazine article Marketing

Proactive Marketing to the Fore

Article excerpt

As signs of recovery continue to be as elusive as a reasonable British summer, and as forecasters - ourselves included - become more pessimistic about the prospects of a return to growth, so companies' strategies need to be reassessed. The role of marketing in particular is crucial.

The prospect of a sustained period of slow, or no, economic growth makes reactive strategies increasingly questionable - there is a limit to how long the hatches can be battened down. There is a limit too, to how far costs can be pared. What is now required is proactive market-oriented action. This can take place on three fronts.

First, marketing activity to increase market share in static markets. This obviously needs to be at the expense of competitors. Depending on the sector concerned this need not necessarily be gained by competitive price positioning, since our data show that product quality remains a key criteria of consumer choice despite the recession.

Second, and for the same reason, it should not be presumed that margins cannot be increased, or that value-added is a thing of the past. Consumers still by and large equate higher quality with higher prices; the difference is that now they need more substantive evidence of inherent quality and functional benefit. Value-for-money is the key issue.

Third, consumers can be actively encouraged to spend more money. This is possible in theory because a significant proportion of consumers have seen their discretionary income rise considerably over the last three years. Our chart, for example, shows that nearly half the population has not had to cut back at all.

The difficulty is that they too have been affected by the recession mentality and are reluctant to increase their spending. Their increased income is going into savings or the reduction of outstanding debt. But, convinced of a real benefit they may be persuaded to part with their money. This benefit could be better reliability, better quality, better servicing, or customer care (in other words better value for money again) or it could be a new product or service which satisfies a real (but perhaps as vet unrecognised) need.

The difficulty with all these strategies is that the potential target group which might be receptive to them is limited. Perhaps as much as half the population is too deeply affected by the recession to be open to marketing "persuasion". …

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