Business drastically reduce marketing budgets as economy bites- Team Namibia
A latest survey conducted by non-profit business support and marketing organisation, Team Namibia has disclosed that 60% of businesses cut down their marketing budgets as the economic down-turn continue to bite.
Says Team Namibia, “For about 30% of businesses, the marketing budgets had remained the same, and indeed, according to responses received, 30% have increased their marketing.”
The survey was conducted in March 2018, and 54.55% of the respondents said that their annual revenue had dropped, whereas 31.82% said that their annual revenue had remained the same while 10% said that their revenue had increased.
The sliding down of sales saw companies resorting to cost-cutting measures.
Bärbel Kirchner, account director of Team Namibia explains: “Cost-cutting measures during an economic recession often include the reduction of marketing budgets to avoid retrenching employees.”
“This approach could be detrimental to business. Literature about marketing activities during an economic downturn or recession generally advocates continued, if not increased, marketing spending as one should not stop communicating with one’s existing, albeit smaller customer base. Although this may not be relevant for all businesses and it would also depend on the sector in which the business operates.”
“However, if there is a continued need for the product or service, despite a momentous downward fluctuation in demand, business owners should seriously consider increasing their marketing activities, not only to keep communicating with your customer base and to maintain their market share but also to strongly position themselves and indeed increase their market share, especially if their competitors have gone quiet.”
Team Namibia said engaging the services of a variety of marketing specialists such as marketing research businesses, advertising agencies or online marketing specialists might also become more affordable during tough economic times.
This also includes, “the opportunities to get your messages across, e.g. through advertising in the print media, on radio or on television,” said Team Namibia.
The organisation said respondents to the survey endorsed this view.
“A total of 72% of the respondents agreed that (20% - agree; 54% - totally agree) that one should continue marketing during an economic downturn, whereas only 11% disagreed (6% - totally disagreed; 5%- disagreed),” it said.
According to John Quelch’s (Dean of the University of Miami School of Business Administration and previous Charles Edward Wilson Professor of Business Administration at Harvard Business School) article in “How to Market in a Recession” for Harvard Business Review (2008), it is becomes even more important to know your customers; to maintain marketing spending; and to adjust product offerings in customers’ needs; and indeed to focus on family values.