Marketing in Turbulent Times: If you're already in a hole, the key is to stop digging.
At the forum in Davos IMF head Kristalina Georgieva warned that in 2023 the world economy will collide with the greatest test since the Second World War, writes The Guardian.
And for marketers, this literally means the following: the consequences of global economic problems will be felt by all countries, all industries, all markets.
So how does the business see the role of marketing at this time?
Proven by experience: in times of any turbulence, entrepreneurs remember the need to use a sensible,aggressive and effective marketing policy of the company.
The absolute power of the consumer.
The need for marketing arose due to overproduction, and therefore the supply of similar products in competitive markets. But it is necessary to understand that any shocks in the macro-environment lead to the main problem of business - this limitation of solvent market demand in quantitative and value categories. Accordingly, enterprises face problems:
-
sales of products,
-
sales margins
-
earning profits
-
aggressive actions of competitors with a limited market size.
In this case, the consumer has many alternatives at the best price, and therefore, he has absolute power in relation to the seller company.
Top 20 problems that slow down.
In the process of communications with entrepreneurs, different opinions are heard regarding the effectiveness of marketing in times of changes in the macro-environment and increase in macro-risks, and therefore, in order to confirm our hypotheses, there was a need to conduct a comprehensive study of the behavior of enterprises.
Top managers and owners of enterprises from the national markets of small and medium-sized businesses participated in the study.
Summarizing the conducted research, it is possible to draw the following conclusions and identify problems, which inhibit or stop development and economic activity of enterprises. we are grateful to the participants for their openness.
1.
Most businesses remember marketing when things are already bad, which is manifested in a sharp decrease in sales volumes.
2.
72% respondents believe that marketing is communication and product promotion.
3.
Developing a marketing strategy is the task of the marketing department, they answered 65% interviewed, and 45% business owners and managers consider marketing a declarative and impractical activity!
4.
There is no marketing strategy in 74% entrepreneurs, and 80% of them it is not approved in writing. And whether all company employees know about it is the same question.
5.
They do not know the volume of their own market 92% interviewed
6.
47% enterprises did not adapt their goals in turbulent times, and 18% they don't have them at all.
7.
Analytics of the business environment built on clear data are not used 75% interviewed
8.
There is no clear understanding of the focal customer 45% business, and segmentation in 52%.
9.
There is no complaints department 85% enterprises, a 64% managers believe that their employees should work with problem customers, and do not want to be involved in negativity.
10.
81% enterprises do not have a systematic loyalty program.
11.
Only 34% enterprises have thoughts of switching to pure online trade.
12.
52% companies do not consider the internationalization of operations.
thirteen.
Only 29% managers are ready to consider raising prices.
14.
Repeat purchases do not occur at 51% enterprises, and the frequency of purchases fell in 66% companies.
15.
Relocation of customers affected 52% enterprises, a 49% companies do not target the offer by the place of relocation of customers.
16.
77% managers believe that the consumption of their customers has shifted to the segment of products of basic necessity, energy and security.
17.
Most businesses believe that rational behavior trumps emotional behavior 60% to 21%.
18.
The company's value proposition is either absent or has become weaker in 62% enterprises.
19.
50% companies felt the aggressive influence of competitors with the beginning of turbulent times.
20.
They are only engaged in the search for new needs 14% surveyed, attracting new customers - 24%, adaptation to new customer behavior - 29%.
21.
72% enterprises are engaged in the assessment of reputational risks, and have adapted their activities to avoid them.
22.
27% see the direction of basic products and services as a promising business, 19% work with government orders, 13% direction of infrastructure restoration.
23.
New needs and potential markets were not studied 61% enterprises.
What to do with it?
Despite the fact that the external environment has changed, marketing tools, methods and methodologies have not changed.
But in turbulence, in order to have an effect, they must be used:
CONSTANTLY
AGGRESSIVELY
UNTIL PROBLEMS ARRIVE
Currently, taking into account all the changes, I identify the main problem as a decrease in solvent demand, and therefore there is not enough space for "sharks - competitors" and they begin to aggressively "hunt" for the client using the simplest element of marketing - price.
Marketing strategy is a complex of actions, in which the price is just one of many meager elements. But all the other elements of the marketing strategy are almost not used by most enterprises: planning, analytics, determining strengths, building a value proposition and a unique competitive advantage, knowing your customer, STP.
Marketing strategy is not goals, mission and positioning, it consists of several dozen elements. Are all businesses like this?
The storm has begun - let's hold the wave.
Plan.
Most businesses do not plan in turbulent times, citing the impossibility of forecasting the market and sales, but then the question arises, if we do not know where we are going, is it important for us to know how fast we are going nowhere?
Study the consumer 24/7.
Any action in marketing must be aimed at the consumer, so we must know our consumer perfectly. This is one of the main mistakes of companies that will make their marketing strategies without knowing and defining the focal consumer and his motives for making a purchase from us, rather than from a competitor. In 52% of enterprises, the consumer moved from their traditional places of stay. Why not intensify activities in other regions or internationalize operations or go online?
Effective marketing ensures success without being tied to a specific territory and geographic markets.
Personnel decides everything.
In an era of macro risks and demand constraints, when market volumes are shrinking, maximizing conversion at every stage of the sales funnel comes to the fore. The market is still limited, and the conversion can be increased infinitely. Therefore, people in marketing and sales are the main asset and source of success. And this resource should not be saved even in difficult times.
Amplify the strong.
The lack of a systematic loyalty program is a negative characteristic for most enterprises, and here the most important word is "systematic", that is, prescribed, with clear rules and conditions. However, the main customers are existing customers who already know about us, buy and forgive our mistakes. And when we shift the focus from them, they go to competitors, because our client is constantly "hunted".
Diversify.
And, of course, in turbulent times, it is necessary to think about reducing risks, regarding dependence on a specific territory, and this can be done with the help of Internet commerce and access to international markets.
Have a value proposition.
Yes, in difficult times, the consumer is poor, but he is ready to pay for the received value, and if the value for the customer is high, then it is always possible to raise prices and sell high, but if there is no value, then even the lowest price will be unreasonably high for the buyer.
Build a brand.
The brand is still important, and it must be built constantly, despite the rationality of the consumer's behavior, which cannot be rejected either. But in difficult times, the formed brand will help the company.
Managers and staff believe that the main reason for the failure and failure of marketing actions is precisely the times of turbulence, but looking at the results of research, we clearly see that the occurrence of risks is only an excuse for failures that occurred due to the absence or marketing strategy in companies, or its inefficiency.
Marketing must be done around the clock, and there are no days off. Moreover, even in turbulent times, the main goal of marketing does not change, because it is a growth hormone!
Marketing starts with...
In addition, it is worth noting and noting that marketing begins with the first person of the enterprise - this is its owner. After all, it is the owner who must realize his most important function in the form of defining and forming the marketing strategic vector of the company's development.
To summarize.
The success of the enterprise in times of turbulence depends on the use of the main components of the marketing strategy: see a potential market, develop value, use effective marketing analytics and build an effective marketing team.
All these questions, components and methodologies of building a marketing system, application of resource marketing and marketing analytics are considered in detail within the framework of CIM courses….
about the author:
Oleksandr Savych
He has experience in managing companies with a turnover of more than 100 million US dollars per year and a staff of more than 1,500 people. Worked with international brands on the markets of Kazakhstan, France and Ukraine.
Over 20 years of proven experience in the position of CEO or top manager of automotive distribution companies. He teaches the "Recourse management" module on sixth-level programs from The Chartered Institute of Marketing.
Recourse management is one of the three fundamental modules of the "Diploma in Professional Marketing" program.
"Diploma in Professional Marketing" is a comprehensive education for marketers. At the end of which students receive a British diploma from The Chartered Institute of Marketing. In 1993, the European Union declared this diploma a desirable professional qualification in marketing in EU countries.
In February, we have planned a special online event - Familiarity with the Diploma in Professional Marketing program.
Among the invited speakers Oleksand Savych- the author of the article.
The purpose of the event is to provide all guests with comprehensive information about
"The Chartered Institute of Marketing", content of programs and study features.
Speakers will also answer all guests' questions.
The event will take place in February 2023 online.